by Brian DeChesare

What to Expect in Your Hong Kong Sales and Trading Internship: The Hunger Games Meets the Wolf of Wall Street?

Hong Kong Sales and Trading InternshipHave you ever read an interview here and said, “That sounds nice… but what happened to this person? Did her internship or full-time job work out? What’s she doing now?”

I have.

Luckily, I don’t have to wonder too much because readers frequently come back and update me on how everything went.

In that vein, this interview is a direct follow-up to a popular one from last year: how to win a sales & trading internship in Hong Kong.

This time around, we sit down to find out how the internship went, what our reader got out of it, and whether or not he would choose HK over NYC again.

Spoiler Alert: If you value full-time return offers, you probably want to stay away from HK…

First Impressions of the Internship

Q: When we last spoke, you were pretty optimistic heading into your internship.

Did it meet your expectations?

A: In most ways, yes.

They treated me quite well, and I did rotations on two desks: equity swap sales and sales-trading.

It was a good contrast because the equity swap sales desk was market-facing, but it wasn’t directly buying and selling stocks in the same way as sales-trading.

I focused on longer-term, research-oriented projects, and I ended up creating a lot of presentations for our team.

I was less directly involved with the work on the sales-trading side because the entire job is talking on the phone and executing trades, neither of which you can do as an intern.

The big difference in Hong Kong is that the trading floor is far smaller than it is in NYC or London.

So they expect you to go around and meet everyone; if you don’t do that, you really have no chance of winning a job offer.

As a result of the smaller team sizes, you also get more senior exposure.

One downside was the daily schedule: I worked from around 6:30 AM to 8:30 PM on my first desk, and 6:00 AM to 8:00 PM on my second one.

Even by sales & trading standards, those hours are quite bad. Fourteen-hour days may not “seem” much longer than 12-hour days, but you definitely feel it.

Hours are longer because:

  1. In HK you cover markets from Korea to India, which is around a 3-4 hour time zone spread; and
  2. Each market also opens and closes at slightly different times.

The other main downside to HK is that it is very tough to get a full-time return offer, as I found out.

Q: So I want to start with your comment about the size of the HK trading floor.

Do you know, specifically, how many people worked there compared to the trading floor of a major bank in NYC?

A: I don’t have an exact number, but let me put it this way: one time my boss in HK went to a company-wide event in New York, and he found himself introducing people from different parts of the same trading floor in NY!

But in HK it would be nearly impossible not to know everyone on the floor.

It’s plausible to sit on every desk here, since they’re all smaller and since there are fewer desks to begin with.

As an intern, you have to strike a careful balance between being available/accessible and also exploring different desks.

I tended to avoid the more markets-based desks during peak hours so I wouldn’t get pulled away from my group for too long.

Picking Your Desk: A Mandate from Heaven?

Q: Right.

So moving into what you did on the job: what exactly are “equity swaps” and why are equity swap sales desks so big in Asia?

A: Essentially, the swaps desk sells the bank’s operational advantages to hedge funds and other clients and collects a fee for the services.

For example, let’s say you’re a hedge fund and you want to invest in India but you don’t want to deal with an investment ID, currency restrictions, and so on (each market in Asia has different regulations, so it gets cumbersome to comply with them everywhere).

You might then choose to enter into an equity swap with a bulge bracket bank that has the infrastructure in India already set up.

The two legs of the swap would look like this:

  1. Large Bank – Pays positive performance of the stock and all dividends to the hedge fund.
  2. Hedge Fund – Pays a financing fee and any negative performance to the Large Bank.

So the Large Bank would buy the underlying security and hold it throughout the life of the swap, which keeps them delta-hedged (Long Stock, Short Swap). They don’t care whether the security appreciates or depreciates since they get a fee either way.

Q: And what was your average day there like?

A: I got in around 6:20 – 6:25 AM to beat the associate to his desk. I spent most of my day on longer-term projects, but we also monitored clients, checked whether their portfolios had issues, and so on.

One example of a “longer-term project” was when I compiled all Chinese bank stocks into a spreadsheet, benchmarked them to their respective indices, and came up with reasons why people would use this “basket” to trade in that market.

The purpose was to educate clients and to answer questions about particular stocks and indices.

I also put together a pitch book for Delta One products in Asia, based on the US and European variants.

And then lots of other random requests came up: sometimes I had to research different funds’ positions in Chinese equities, fact-check and gather data, and so on.

Q: So you did quite a lot of “real work,” even though you couldn’t speak with clients.

What about on the sales-trading side?

A: That was much more of a “shadowing” internship.

When I was there, the big topic was mutual market access in China, and specifically the ability to use a brokerage account in HK to buy A-shares listed in China.

We were receiving a ton of client requests about how to do that, so I researched the mechanics and the stocks that might be interesting.

But I spent a lot of my time listening in on phone calls, asking questions, and trying to save the team time in small ways (and, of course, getting food for everyone).

One time I made someone’s day simply by letting him know how to recover a previously deleted Bloomberg message.

Q: Yeah, small things do go a long way.

Is it possible to pick your desks?

Or are they just handed down like a mandate from heaven?

A: Usually the main person that interviewed you and pushed to hire you will assign you to his/her desk for your first rotation.

A few weeks into the internship, you start thinking about the 2nd desk and you can put in requests based on your contacts at the bank and your interests.

Whether or not you’ll get it is a different story, since intern assignments are based on which desks are hiring and have the resources, which is tough to know as an intern.

Q: So you can’t be “strategic” about which desk to pick for the 2nd rotation.

A: Oh, all the interns speculated about who might be hiring, which desks might be “the best,” and so on… but very few people had any real knowledge.

However, you can do a few things to tip the odds in your favor:

  • Find out which desks just hired people – your chances of receiving a full-time return offer will probably be lower there, unless the desk is in a significant expansion phase.
  • Research the growth areas for your region. In HK, for example, all the growth was in electronic trading rather than sales-trading, research-sales, etc.

So you might be able to improve your chances slightly with that information.

Q: Any other recommendations for desks to join?

A: I think it’s good to get a contrast, so you might want to pick a heavily markets-based desk and then one that’s not quite as markets-based, as I did.

The advantage is that you do more “real work” when there’s more to the job than talking to clients and trading securities.

But it’s highly dependent on the people in each group, and your assignment(s) will always be somewhat random.

Q: Thanks for clarifying.

What about the social situation when you were there? Was it a high-intensity reality TV show, or more relaxed?

A: Our class was divided into three groups:

  • One other “Westerner” and myself, along with a few people from Singapore and other regions.
  • Quite a few Asian-Americans.
  • Students born and raised in China who were completing Master’s degrees in the US or UK.

The interns got along pretty well, and management put on tons of events, group lunches, and other discussions with senior people.

But we did different things on weekends, and the three groups above split up to go their own ways.

It also became more competitive as the internship progressed; we realized midway through that very few of us would receive return offers.

On the first day one guy on my desk said, “This will be the most intense summer of my life” and compared it to The Hunger Games.

I thought he was joking, but the first part of his claim turned out to be true – fortunately, no one was killed by a spear through the abdomen.

Getting a Return Offer and NYC vs. HK

Q: So what do you have to do to receive a full-time return offer?

Shoot the other interns with arrows rather than spearing them through the abdomen?

A: Not exactly, but you need to fit the exact profile they’re looking for, and you need to work on a desk that’s actually hiring.

Most teams in Asia were staying about the same size, at least when I was there, so it was tough to find openings unless someone left randomly.

Of the ~12 interns in our class, only 3 received full-time offers:

  • One of them was from another Asian country and had completed a previous equity research internship. He had incredible Excel skills and did trading and research-sales rotations.
  • The other one did quantitative work with more mathematically complex securities, and they needed to hire someone in that area.
  • And then there was one other hire on the electronic trading side; the bank was expanding there, and this intern performed quite well in his rotation.

You have to be really, really good at Excel to put yourself in the running for a full-time offer.

The first intern I mentioned above was so good at Excel he did things that even senior members of the desk didn’t know were possible.

In NYC, by contrast, around 30 out of 35 interns received full-time offers (from what I heard).

While Excel and technical skills help, they’re not as make-or-break as they are here.

And you don’t need to work in the perfect area to get a return offer.

Q: I’m starting to think I could not win an offer there, and I teach Excel.

So how would you sum up the differences between HK and NYC?

A: I would say:

  • Main Benefits of HK: You get to do more interesting work and you’re “thrown into the deep end” more often since team sizes are smaller; you get more senior exposure, even as an intern, and you develop good relationships with those above you.
  • Main Benefits of NYC: It’s a much bigger market; the conversion rate to full-time offers is much better; and if you want to rise to the highest ranks at a US-based bank, you’ll probably have to go to NYC to make it happen.

If you want a relatively stress-free senior year in university where you don’t spend months hunting for full-time jobs, I would strongly recommend New York.

But if you don’t care about going through recruiting yet again and you want to be in Asia, HK might be better.

Q: So let’s say you work in HK and you don’t receive a full-time return offer.

What do most people in that situation do?

A: In most cases they’ll go back to their own countries and look for roles there.

Almost everyone I knew from the US or UK went back and won an S&T-related role at a large bank.

With “[Bulge Bracket Bank] Sales & Trading” on your resume, it’s straightforward to win interviews elsewhere.

I’m interested in working in HK, so I stayed here after the internship finished up and I’ve been networking and recruiting for other roles.

My bosses have been very helpful, and they’ve even made direct referrals to the group heads of other firms – but I’m still searching for that full-time offer (as of the time of this interview).

If nothing here works out, I might go back to the US in a few months.

Q: I see.

Any other advice you would give to someone who’s considering both of these regions for internships?

A: Although HK internship recruiting starts and finishes earlier, you can potentially recruit for both regions.

So if you want to compare and contrast, you could go through HK recruiting first and then do NYC recruiting and see where you fit in best.

But again, it comes down to how stressful or stress-free you want your last year in school to be, and whether you plan to stay in the US long-term or work overseas.

Q: So if you had to do it all over again, would you still choose to work in Hong Kong?

A: Yes, because the senior connections I gained were so valuable.

Having done this internship, I can also work abroad in the future more easily than someone who started out in NYC and stayed there.

I didn’t win a return offer, but I’m confident that something will work out, either here or back home.

Q: Well, thanks for your candidness and for sharing all this information with us.

And good luck with your job search!

A: Thanks! It was my pleasure.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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