Sales & Trading

So you went to every recruiting event, met people from sales, trading, and HR, did informational visits, and made every cut. You're a cinch to grab that job for the summer. Well don't make that summer house deposit just yet. Everything you have done so far was all in an effort to earn an interview. Interviewing is a whole new game. It's no longer you versus the crowd, it is you against the other ten people who also did great at that bank and I hate to be the bearer of bad news but there won't be ten spots in that particular program. That means someone is going home empty handed.

Interview time is crunch time. Time to bring your A game and stand out from the crowd. The people who do the best during interviews and secure those coveted spots are those who are best prepared. Ask Heather Coyle, S&T Club officer and summer associate at Deutsche Bank. Heather came back to Stern from winter break just after New Years. She spent every day in the study rooms reviewing her finance notes, reading the WSJ, mock interviewing with friends, and trying to learn potential interview topics with which she was not familiar with. How about Tim Fisher, summer associate in research at UBS? Every time I saw Tim in the days leading up to interviews he was carrying around a half foot thick stack of note cards with everything from finance formulas to economic indicators on them. Did Tim and Heather nail their interviews? Absolutely!

So hopefully you are convinced that winter break is time to prepare and not time to sit on the couch and drink eggnog. You are ready to grind it out but don't know exactly what to work on. Here are a few key items to pay attention to come interview time:

Story: Your story comes across when you truly believe it. Sit down and really figure out what you like and want. You have been through months of recruiting now. Hopefully you have visited companies, seen various groups or products, different roles, and have a feeling for what you want to do. Be able to clearly articulate what you did in the past, what brought you to Stern, why you want to do sales & trading, and what kinds of specific areas you like. Potential questions to consider include:

Sales, Trading, or Structuring?

Flow products or complex transactions?

Which product groups would you want to work for?

Tell me about what you did before Stern?

Why did you go to business school?

Why sales & trading?

Why this company?

Technical Questions: Topic everyone dreads, the technical questions. Do not be afraid. If you are well prepared you can nail them all. Keep in mind though that they don't expect you to know everything. They will keep pushing your limits until they know your threshold. First and foremost be able to do the technicals, at least the basics, behind the role you tell them you want. If you say you want to trade options you had better be able to do some options pricing and strategies. If you say you want to sell commodities you had better be able to give your forecast on oil, gold, agriculture, etc.

So you like rates products. What will the yield curve look like in 6 months?

So you want to trade commodities. What is going on in the crude market?

You like to trade options. What is the delta of an at the money call?

Know the basics behind the main asset classes: equities, bonds, commodities, foreign exchange. Have a trade idea, simple or complex, for each one. Be able to pitch that idea with solid reasoning behind your idea. Remember this is sales & trading, not research, so they are looking for trade ideas not a 2 year investment idea.

You say you want to do equities. Pitch me an idea to short a stock.

Are you long or short the ten year Treasury for the next 6 months?

Finance Class - you have all been through intro to finance now so they expect you to be able to answer basics. Claiming to be a career switcher is no longer valid for basic questions. If you don't know the answer, think about it out loud. They would rather hear someone think about what they know even if the answer you give is wrong instead of simply saying you are new to finance. Study your into to finance class notes. Pretend like your final exam is interview day.

Do you believe in efficient markets?

Explain to me what bond duration is. What about convexity?

Economics - Like it or not all sales and trading comes down to macroeconomics. Whether you are trading equities, bonds, fx, or commodities, prices and supply/demand are driven by the macro environment. Know the main variables, where they have been, and where they are going.

What was last quarter GDP, non-farm payrolls, inflation, etc?

Where will the unemployment rate be in one year?

Is the recession over?

Asking Questions: Each interview will always end with the interviewer asking you "so do you have any questions for me?" Your answer had better be yes. Ask good questions. Ask questions at their level. By that I mean don't ask a VP level trader about the strategy of the company, i.e. something you would ask the CEO. Have some basic questions prepared ahead of time in case you draw a blank but I like to think on my feet and react to how the interview went. Asking questions based on what you learned during the interview shows you care and were paying attention. For example:

You mentioned earlier that you started at bank XYZ as a trader but now you are in sales. Is that typical at XYZ?

You mentioned that you trade gold. Do you think we will keep seeing record highs or will we see a correction soon? (people love to talk about their own market rather than answer general questions)

In summary, relax. This is meant to be stressful. They will push you right up to the line and for some companies they will push you right past the line. Sales and trading is a tough job and they want to know you won't crumble under pressure. Go slow and think. When they ask a question, think about it briefly, but when you answer try to think out loud. They want to know how you think and how you came up with your answer. If you are stuck but thinking out loud they will sometimes give you a little nudge in the right direction. Finally, be prepared. Winter break means no school work. You will be tempted to not pay attention to what is going on, stop reading the WSJ, etc but now is not the time to slack off. Work hard and prepare and you will see the rewards come February. Good luck. Remember, MBA2s and clubs are here to help you so use that resource too.