Top 5 J.P. Morgan Sales and Trading Interview Questions and Tips

The J.P. Morgan sales and trading (S&T) summer analyst program - which JPM calls their Markets program - has a unique structure compared to comparable programs at places like Goldman Sachs.

For Goldman, the general thought is that it's hard to know where exactly someone fits best within the trading floor. So summer analysts will be placed on three desks over the summer and and then those desks will decide if they should get an offer to their particular desk or not.

This leads to the awkward - and somewhat inefficient - outcome of some summer analysts having multiple potential offers from multiple desks (and a few others having none). 

At J.P. Morgan you will not being interviewing for a specific desk during your superday, but prior to beginning you will be placed on a specific desk where you will stay for the duration of the summer. 

What this means practically is that in interviews JPM is looking for summer analysts that have a strong idea of what desks they want to end up on as they won't have the luxury of floating around the trading floor during the summer.

What this means practically for you is that you need to have a broad understanding of the kinds of desks that exist, what the products are they trade, and what best matches your personality and skillset. 

This is a large reason behind the creation of the Sales and Trading Interviews course, which has nine "Desk Guides" that go through the basics of the most prominent desks in order to help you figure out what desks are out there, what they do, and where you will likely fit best.

...Of course, the course also provide over 300 real-world sales and trading interview questions too. 

J. P. Morgan sales and trading interviews are no different than traditional S&T interviews with the exception that there is certainly more emphasis placed on knowing where you'd like to go.

Further, you should expect basic follow-up questions on the desks you say that you have an interest in (to gauge whether or not you really do).

The reality is if you can demonstrate contextual understanding of what various desks do, and why a certain desk is likely right for you, you'll put yourself in a very strong position for an offer. 

JPM Sales and Trading Interview Questions

On this page we'll be going over some of the basic behavioral interview questions you'll get, and what some of the technical follow-up questions will look like at JPM. 

Question 1: Why JPM? Why not Goldman Sachs or Citi?

Question 2: Do you have any desks you're interested in?

Question 3: What are STRIPS?

Question 4: Is the relationship between bond prices and yields linear?

Question 5: What kinds of swaps exist?

Why JPM? Why not Goldman Sachs, for example?

In any sales and trading interview it's not uncommon to be asked why this bank in particular, not some comparable bank, is where you want to be.

A good answer to this kind of question will touch on a few different things:

• Show that you've talked to those at the bank and enjoyed your conversations
• Like some unique aspect about the bank
• Like some unique aspect about the program

An example of a strong interview answer would be as follows:

I'd say a few different things. First, I've had the chance to talk to a number of folks in sales and trading here and really enjoyed our conversations. I found that they really seemed to enjoy their work and almost all joined the bank via the summer analyst program, which was refreshing to hear.

Second, I think that JPM is unique in just how large it's balance sheet is and that translates obviously into the capacity for JPM to have such a large Markets division compared to Goldman, for example, where they are likely a bit more constrained and have to focus their resources more narrowly. 

Finally, I think a fixed-placement program, as opposed to a rotational program, is simply better and this is quite unique to JPM. I think only having two or three weeks on a given desk would preclude getting a real sense of the desk and if it is right for you.

So why JPM is the bank I'd most like an offer at is really a confluence of these things. Although, of course, to be honest I just want to have a chance to work in S&T so obviously I'd take an offer wherever I can get it! But JPM would be my preference. 

Do you have any desks you're interested in?

Given the fixed nature of your placement at JPM as a summer analyst, you should have some desks you're interested in.

However, it's important to recognize the fact that you should never say there is only one desk you're interested in. This is for two reasons. First, you run the risk that the interviewer knows the desk isn't going to be hiring anyone full-time this year so you wouldn't be able to go there. Second, and more importantly, stating unequivocally that there is one desk you want to be on can come across as arrogant. 

What you want to do instead is speak about multiple desks that could be of interest - and that you'd like to learn more about - and state a rationale for why that's the case.

An example of a good answer to this would be:

Broadly speaking, I think I would prefer more flow oriented desks like those in rates. Within rates, I obviously can't speak with too much conviction, however I think I would enjoy either treasury trading or potentially TIPS trading.

I really enjoy following central bank policy, tracking changes in the yield curve, and thinking about how different parts of the yield curve could change over time. For example, I've really enjoyed reading the back-and-forth over those who anticipate a strong steepening - vs those who anticipate a strong flattening - of the 2s10s or 10s30s section of the yield curve this upcoming year. 

What are STRIPS?

If in the prior question you show an interest in rates, a common follow up question will be diving a little more into rates trading to see just how much you know. 

A common follow up question for rates trading will involve seeing if you understand more niche products that also are traded on the rates desk (or within a silo of the rates desk). 

STRIPS are one such niche product and an answer to this question would be as follows:

Treasuries can be thought of – just like most other fixed income instruments – as having a coupon component and a principal component. However, some investors may want to have just a claim on the principal or just a claim on the coupons (without the principal). STRIPS (separate trading of registered interest and principal of securities) involves trading just the principal or interest components of a treasury.

Is the relationship between bond prices and yields linear?

This is another kind of follow-up question that gets into the technicals of rates a little bit more.

Here what we're looking to do is see whether or not you understand the relationship between price and yield.

The (negative) relationship between bond pries and yields is not exactly linear. Instead, to approximate changes, you use a concept called convexity. 

What kinds of swaps exist?

In a sales and trading interview - especially for a summer analyst position - knowing the kinds of products traded (but not necessarily much about how they operate) is entirely sufficient. 

Of course, if you can speak to the nuances of a product that's all the better. However, interviewers have realistic expectations.

One question I was personally asked - after talking about my interest in swaps - was what kind of swaps exist. I didn't need to know how all of these operated, but just knowing that swaps went beyond the traditional fixed-for-floating variety was highly impressive.

Here's a list of the kind of swaps traded on the floor:

• Fixed-for-floating swaps
• Basis swaps
• Spot starting vs. forward starting swaps
• Asset swaps
• Currency swaps
• Callable / Puttable swaps
• Constant notional value swaps vs. amortizing value swaps

Conclusion

The JPM Markets division offers one of the best sales and trading platforms out there due its large balance sheet and established presence. 

Unlike most sales and trading summer internship programs, summer analysts will not have the capacity to rotate around the trading floor. Therefore, serious thought needs to be given to where you want to be placed for the summer (as that will likely be where you go full-time). 

One of the singular best ways to stand out in any sales and trading interview - but in particular for JPM - is to be able to talk intelligently about what desks you're interested in.

You should never say in an interview the exact desk you unequivocally want to be on. Rather, you should bring up two or three similar desks that you have interests in and express why you're interested in them.

If you're looking for more S&T interview prep, along with nine desk guides that will give you all the basics you need to know on the most popular S&T desks, then be sure to check out sales and trading interviews. Alternatively, you can also check out an even longer list of top sales and trading interview questions I posted or the more general sales and trading overview.

As always, best of luck!