This is a guest post from a reader who broke into Sales & Trading (S&T) coming from a non-target school. In Part 4 of this series, you’ll learn all about sales & trading interviews and how to tell your story and answer “fit” questions.
“Are you available for a phone interview on Tuesday next week?”
It was a Wednesday night, and I was staring at the email I had just received from a bulge bracket bank.
“Yes” was the only logical response… followed by a lot of freaking out.
Since I was from a complete non-target school, this would be one of my few chances to interview at a top bank – and I was up against people with a lot more resources and experienced mentors at their disposal.
Oh, and then there was the fact that I only had one week to prepare.
My interviews didn’t go so well at first, as I learned the ropes of how to present myself and the questions to expect.
Eventually I turned it around and landed a sales & trading offer at a top bank – here’s how I did it, and how you can do the same.
Your Preparation Process
The good news about interviewing is that it’s a skill, and with the right amount of practice and effort you can master it.
And unlike with networking, you can actually improve your odds quite a bit at the last minute with solid interview prep.
Here’s the 4-step process you should follow when preparing for S&T interviews:
- Understand the qualities they’re looking for.
- Know the questions you’ll get.
- Prepare your “story” and answers to the most common questions.
- Practice, practice, and practice some more.
We’ve already covered the most important qualities in sales & trading resumes: quantitative ability, analytical skills, and passion for the financial markets.
So they’ll definitely be looking for those in interviews as well – but a few additional things they’ll be thinking about:
- Is this person hungry to be a good trader, or are they just “checking it out?”
- Can this person think very quickly, without hesitation?
- Can he/she take risks and act appropriately even when things don’t go their way?
- Is this person nervous in the interview, or can they handle the pressure?
- Can he/she think differently from everyone else and come up with strategies and ideas that go against the mainstream?
- Does this person want to do sales & trading specifically as opposed to related fields such as asset management?
You need to incorporate these qualities into your responses.
In sales & trading interviews there are 3 main question categories:
- Behavioral / Fit – The questions are similar to what you’d get in any finance interview, but your responses will emphasize different points. And so will your “story.”
- Market – Everything from discussing market trends and current events to pitching stocks and trading strategies.
- Brainteasers / Math Questions – What’s the square root of 58? How many smaller cubes are painted on 2 sides in a large cube made up of 9 smaller cubes on each side that’s painted on the outside? What’s 57 x 83?
They’re more likely to focus on basic concepts such as market cap and basic multiples like P / E, rather than the in-depth trade-offs of different methodologies and models.
Generally, your first round interviews and phone interviews will be very fit-based, and your Superday interviews will be much more markets-based – but definitely expect some market questions on the phone interview, and some fit on the Superday.
In this article, I’m going to focus on the first category above: fit and behavioral questions (market and brainteaser/math questions will be coming up in the next part of this series).
People underestimate these qualitative questions because they don’t involve math, but that’s a huge mistake: if you don’t get your “story” straight and don’t convey the qualities they’re looking for you’ll never make it past the first round.
How to Walk Through Your Resume in S&T Interviews
Brian has already laid out in detail how to walk through your resume in finance interviews, using this 5-step outline:
- The “Beginning”
- Your Finance “Spark”
- Your Growing Interest
- Why You’re Here Today
- Your Future
You can use the same outline in S&T interviews, but your focus will be slightly different.
In banking interviews you can get away with saying something open-ended for points 4 and 5 such as “wanting to advise companies” or “wanting to become an investor,” but those are poor answers in S&T interviews.
A common, lackluster, approach for points 4 and 5 is to say something like, “I’ve always been interested in investing in stocks and managing my own portfolio, and a career path where I could research stocks to buy and sell and then make trading decisions would be ideal for me.”
While this demonstrates interest in the financial markets, it does not show that you are specifically interested in sales & trading – that answer could apply to asset management, equity research, value-oriented hedge funds, or plenty of other fields.
Plus, sell-side traders don’t even “research” stocks and make decisions that much unless they happen to be prop traders… and even there, there’s still overlap with market-making and client work.
So you need to explain why you want to do S&T as opposed to other public markets roles:
- Pick a specific product to talk about such as options, other derivatives, commodities, FX swaps, etc. – and make sure you know the in’s and out’s of that product since you will get follow-up questions.
- Talk about how you enjoy the results-driven environment – having a personal P&L makes it different from equity research.
A Better Outline for Your “Story”
You might use an outline like the following in an S&T interview:
- The “Beginning” – Grew up in [Country / City] and went to school at [University Name], majoring in [Major Name – hopefully something technical!].
- Your Finance “Spark” – You won 1st place in a trading competition by analyzing the airline industry and longing a stock that rose 20% and shorting another one that fell 15%.
- Your Growing Interest – You started out doing an internship in PWM and liked the markets-based work, but wanted to work in an environment that’s more results-oriented… which led you to a small hedge fund where you focused on currency swaps and learned all about strategies there.
- Why You’re Here Today – You’re passionate about the financial markets, making trade decisions, living and dying by results, and in swaps of all kinds and you want to work on a bigger scale than you did at the hedge fund.
- Your Future – Trading is your passion and you want to make a long-term career out of (swaps, or whatever product you’ve mentioned) and think that this bank provides the best environment for that.
The biggest problems with sales & trading “stories”:
- You ramble on about wanting to “help clients” or “be in a fast-paced environment.” Those are fine to mention, but your answer needs to be more than that.
- You fail to distinguish between S&T and related fields (see above).
- You mistakenly think that you’re in a banking interview and give overly broad reasons for points 4 and 5 above.
The good news is that it’s easy to avoid a horrible story – just make sure you sound like the complete opposite of this guy:
Other Common “Fit” Questions
Other “fit” questions are similar to what you’d get in any finance interview: your experience working in teams, your strengths and weaknesses, cultural fit, background, commitment, and so on.
Those have already been covered on this site many times, so I’m not going to repeat all the details – instead, I want to focus on the differences and how you should tweak your responses in S&T interviews.
You should use the PAR (Problem/Situation, Action, Result), otherwise known as STAR (Situation, Task, Action, Result) framework, to answer these questions.
Focus on behaviors (i.e. what you actually did in a given situation) rather than inferences (assuming something based on what you did).
Here’s an example of a response to a typical “fit” question:
Q: Tell me about a problem you faced and how you dealt with it.
Problem: Advertising revenue was falling for my college newspaper, “The Paper,” and many advertisers were not renewing their contracts.
Action: I designed a new promotional packet to go with the rate sheet, and compared the benefits of advertising in “The Paper” with other ad media in the area. I also set up a training session for the account representatives with a professor who discussed competitive selling strategies.
Result: We signed 20 contracts with former advertisers and increased our ad revenue by 20% within the first three months of creating the promotional packet and setting up the training sessions.
Remember the qualities above that they’re always looking for: passion for the markets / trading, quick-thinking, ability to measure risk and handle defeat, grace under pressure, and unique thinking.
You should go through your resume/CV and find 5-6 stories that best demonstrate these qualities.
The example Q&A above is “good,” but it would be even better if it showed off some of those traits: for example, maybe you came up with a really different advertising method, or you were under much more pressure to perform, or you had a very tight deadline and had to apply quick-thinking to the situation.
Stories that could work well in S&T interviews for these types of questions:
- You came up with a contrarian strategy in a stock investing competition and placed well as a result.
- You were under pressure to turn around a student club before it ran out of funds in a matter of weeks, and came up with a creative solution that saved everyone.
- You evaluated the risk of a new business you were starting, and hedged your risk by taking some other action.
- You analyzed a client’s portfolio and came up with new strategies that earned him above-market returns – even though he thought it was too risky at first.
- You were losing a debate competition, but you thought quickly on your feet and found a way to spin your opponent’s argument around that allowed you to come back from behind and win.
Go through each bullet point you have on your resume and sketch out what you’re going to say to best demonstrate these qualities – and plan out how you’ll apply the same few stories to answer all types of “fit” questions.
Unique “Fit” Questions for S&T?
Beyond the normal questions, you’re also likely to get “What would a trader do?”-type questions.
For example: “Let’s say you just bought a stock, and you told yourself that you would sell it at a certain point. Then, the stock dipped below that point, but your colleague told you that the stock was going to go back up. What would you do?”
Cutting losses is extremely important in trading, and so that’s exactly what you would do here… but you should also back it up by pointing out how you’ve cut losses in the past, with trading itself, a school or work project, or anything else.
Asking about investments and strategies gone wrong is a popular topic here because it’s easy to come up with “unique strategies,” but much harder to adapt when your strategy fails and you need to fix it.
These questions are more about knowing what you do in each group and how different desks differ rather than coming up with earth-shattering insights.
For example, you could say you’re really interested in fixed income because you like credit analysis and following corporate news (if you want to trade corporate bonds rather than government bonds); or you like equities because you enjoy coming up with different options trading strategies.
But be sure to express your openness to anywhere in the firm that you can learn the most – this is especially important if your interviewer is in equities, but you know you want to do fixed income.
Placement usually comes later on, so you’re best off not offending your interviewer because there is a HUGE divide between equities and fixed income.
Sales vs. Trading Questions and Answers
As mentioned in the previous article in this series, you apply for sales & trading roles without specifying a desk or role upfront.
They will probably ask if you prefer sales or trading, and once again, you just need a well-reasoned-out answer:
- Sales is better if you enjoy the markets but like pitching your ideas and developing relationships more.
- Trading is better if you also like the markets but enjoy the technical side and making trades more.
The actual “fit” questions you’ll get after you’ve specified which role you want are not radically different because the skill sets overlap.
The main difference is that they’ll focus more on your communication skills in sales, and whether or not you can explain complex ideas simply.
Many of your clients won’t understand extremely complex strategies, so being able to break down arcane ideas into understandable chunks is essential.
How to Practice
Once you’ve figured out your main “story” and collected 5-6 supporting stories, you need to get to work practicing.
I did everything imaginable, from recording myself to sketching out my answers to doing mock interviews with older classmates and friends who had been through the recruiting process.
You do get diminishing returns after enough practice, so you don’t want to over-do it… if you’ve already done 15 practice interviews, you’re not likely to learn much more from the 16th one.
And you should never give scripted answers because they sound very artificial – rely on outlines rather than pure memorization, and try to change up the details of what you say each time.
Recording and playing back your answers to yourself may scare you at first, but it’s a great way to evaluate what you sound like and what you need to improve upon. By the time my real interviews started, I already knew what I had to pay attention to and where I might screw up.
Interview Day – Final Points to Keep in Mind
First impressions are everything!
You should be wearing a dark suit, with a modest shirt and tie combo. Make sure your hair is neatly groomed, you are clean-shaven, and you smell clean (cologne/perfume is okay, but don’t overdo it). You should even shine your shoes.
Having you suit dry-cleaned is not a must, but for a few bucks it’s a worthwhile investment. It will help you look and feel like a million bucks.
And if you’re female, wear the equivalent business formal attire.
Attitude and Confidence
Attitude is an extremely overlooked part of preparing for behavioral questions.
Enthusiasm and passion are key, not just for financial markets, but for S&T and the firm in general. If this is the job of your dreams, then psyche yourself up about the possibility of reaching your goal – if you can’t easily do this, then is S&T right for you?
During my interviews I was constantly smiling, and my interviewers always mentioned my enthusiasm in their comments to me.
Confidence is also important: your posture and speech, and non-verbals convey confidence, so make sure you speak loudly, make frequent eye contact with the interviewer, and sit up straight.
With a phone interview, I recommend standing up while on the phone to convey confidence. Having possible questions and answers in front of you (sketched out, not word-for-word) will also help.
Before all my interviews, I would stand in front of a mirror and pump myself up, tell myself that I was a great candidate and so on (yes, I made sure that no one else was watching) – it sounds stupid, but it worked very well on a subconscious level.
What to Do When You Don’t Know the Answer
It is perfectly fine to say “I am really not 100% sure about that, can I get back to you?”… the key is to make sure you then follow-up with your interviewer.
Don’t ever BS an interviewer – they can usually smell your lies, and it’s the quickest way to lose your shot at the job.
This mostly applies when you are answering technical questions and you get something very detailed.
If you don’t have an answer for “Why S&T?” or “Tell me about a team problem you’ve overcome before” then you shouldn’t even be in the interview.
Asking Questions – Good vs. Bad
When the interview comes to a close, the interviewer will ask if you have any questions for them.
Always say yes!
Questions need to differentiate you from other candidates, so be thoughtful about what you ask and get the interviewer talking for as long as possible. Examples:
- “In the past you have hired many interns; what were the skills that the ones who succeeded had? What skills were the ones who failed lacking?”
- “What do you wish you knew 20 years ago, that you now know and did not know back then?” (This question is thought-provoking and memorable. Whenever I asked it, the interviewer responded – it’s a good one assuming the interviewer is older and more experienced)
Also try to ask S&T-related questions such as:
- “When you first got started in this industry, how did you know that S&T was right for you? How did you choose between sales and trading, or fixed income and equity?”
The close is all about expressing to the interviewer your enthusiasm for the job – and making sure they know that you are the right fit.
I always said: “Your firm is 100% the place for me. I know that for x,y,z reasons I will be a good fit, and will do whatever it takes to add value to your team. I can honestly say, and this is really only true of your firm, that if given an offer, I will accept on the spot.”
You should only do this if you are willing to back your words with actions, but it worked very well for me.
Thank You Notes
Without going into great detail – the thank you note is a must and it should be sent via email within 24 hours of your interview.
Thank the interviewer(s) for his/her/their time … and bring up something from the interview that will allow your interviewer to remember you.
If you told them you would get back to them about a specific question or if there was something that you forgot to tell them about/ ask them, the thank you letter is great medium.
Tell them you look forward to hearing from their firm and are excited for the opportunity to work with them in the near future.
NOTE FROM BRIAN: I realize I’ve said before that Thank You notes don’t matter. In many interviews, they won’t make a difference because hiring decisions are made quickly… but you never know.
It never hurts to send a short follow-up note, especially if you want to remind them of something specific. Just make sure you do it quickly.
Hope for the Best and Plan for the Worst
Finally, maintaining low expectations walking into an interview can help you a lot.
If you walk in expecting to win an offer instantly, you’re bound to be disappointed many times… but if you go in expecting nothing but hoping that you’ll do well and at least improve your performance this time, you’ll be in a much better state.
You will rarely, if ever, win an offer on your first try – keep at it, and if you really think you were judged unfairly, don’t hesitate to petition for a “do-over” no matter how big or prestigious the firm is.
Coming Up Next
That’s the first part of how to dominate your S&T interviews and how you should approach fit and behavioral questions.
Coming up next, we’ll conclude this series with one of my favorite topics: markets and math/brainteaser questions – and you’ll learn how to prepare, how to practice in advance, and yes, even how to calculate the square root of 58 in your head.
This is a guest post from a reader who broke into Sales & Trading (S&T) coming from a non-target school. In the upcoming features in this series, we’ll continue to explore the sales & trading recruiting process with coverage of interviews and more.
- Sales & Trading Recruiting, Part 1 – Overview
- Sales & Trading Recruiting, Part 2 – Networking
- Sales & Trading Recruiting, Part 3 – Resumes
- Sales & Trading Recruiting, Part 4 – Interviews – Your Story and “Fit” Questions
- Sales & Trading Recruiting, Part 5 – Interviews – Markets, Brainteasers, and Mental Math