What's in The Sales and Trading Guide
Going into my first sales and trading superday in 2015 I was incredibly nervous, because I had absolutely no idea what to expect.
Fortunately, I got the offer, and was able to parlay that into a top-tier BB offer for the next summer, however in hindsight I was woefully unprepared.
The reality is preparing for sales and trading interviews doesn't need to be difficult. In many respects the bar you need to hurdle in order to be better than the vast majority of candidates is incredibly low.
However, the difficulty is figuring out what you don't know and how candidates are actually evaluated.
No one has ever taken the time to explain what sales and trading actually is, what kinds of interview questions are asked, and what various desks actually do in practice.
This is all for good reason: a trading floor is an incredibly diverse place. What a municipal bond sales person does is astoundingly different than what an equity derivatives trader does.
But the catch is that either or these people - or both of them! - could be interviewing you for a summer analyst or full-time position during a superday.
In early 2020 I began to think about how a few lucky breaks got me my sales and trading summer analyst positions and how fortunate I was. I had always thought it was worth putting together some kind of guide, but then ran into the road block of how on earth to structure something like this.
The Philosophy Behind the Guides
In sales and trading you have two fundamental challenges. You need to get the offer and then get placed on the right desk for you.
Many entering into S&T are manically focused on getting the offer, which is reasonable enough. However, they entirely overlook actively figuring out what few desks are right for them prior to starting.
One thing every young person goes through when they hit the trading floor is a deep sense of overwhelm and insecurity. You feel like you don't belong, have no idea where all the desks are, have no idea what people do, and (most importantly) have no idea where you're supposed to fit in.
What you absolutely can't do during your internship is go with the flow. You need to be proactive, do your due diligence prior to beginning, and quickly figure out where you think fits best.
This is an incredibly difficult task because it's not immediately apparent when just searching around the internet what a rates trading desk even is, or what desks exist within credit.
When I began thinking about how I would structure a sales and trading interview guide I quickly realized that these two fundamental challenges are actually intertwined.
The most impressive interviewees always have a strong idea of what desk they want to be on, how the trading floor actually operates, what a trader or sales person actually does, etc.
Therefore, the best guide would be one that provides all the interview questions commonly asked along with desk-specific guides that ensure you have a holistic understanding of how the trading floor is laid out and where you may be interested in joining.
How The Guides Are Put Together
The issue with sales and trading - the fundamental reason why no one has ever attempted to create this kind of course before - is that diversity of the floor.
I realized that in order for everything to really "click" I would need to give a comprehensive introduction to everything, without creating a situation where those reading the course get overwhelmed or discouraged.
So I elected to break down the course into two distinct sections: The Primary Guides and The Desk Guides.
The Primary Guides
- The Overview Guide: This guide is meant to give you the background knowledge you need on the titles, roles, responsibilities, of folks within S&T and how the trading floor is laid out. This guide is all about building contextual understanding.
- The Interview S&T Guide: This guide is meant to go over all the most common sales and trading interview questions all in one place. There are hundreds of questions here, but if you're short on time this can give you a great chance of getting the offer without needing to go through everything else in the course.
- The Networking Guide: The networking guide is important not just to get your first round interview, but also for getting on the right desk. This is because after you get a summer analyst offer you should be e-mailing folks at desks you're interested in to pick their brain and get on their radar for when the summer roles around. In sales and trading you want people to know who you are before you begin.
- The CV and Cover Letter Guide: This guide is the shortest primary guide just going over what your resume and cover letter should look like. Chances are you already have these prepared and they look good, but this is just meant to give some ground rules to make sure everything is in order.
These primary guides, as you can probably tell, are the essential guides you need to read prior to interviewing. While it's great to read some of the Desk Guides prior to interviewing, it's perfectly fine to not do so if you don't have enough time. You still are probably putting yourself in a strong position to get an offer.
The Desk Guides
The Desks Guides are nine separate guides covering the largest areas of the trading floor. The way I structured these guides is by giving 20-40 questions and answers that you could potentially face in an interview or when you're networking with desks prior to your summer or during your summer.
Many are under the mistaken impression that it's perfectly fine to come into your internship not really knowing anything about the desks you're rotating on or the desk you're placed on.
This is entirely incorrect, because everything is relative. There will be some people who have some background knowledge competing for a spot on the desk you're on. So you need to be relatively better than them.
One thing that folks on the desks will do is quiz you on the basics of the products they deal with. These guides are meant to set your foundational knowledge along with helping you figure out what desks are potentially right for you in the first place.
Each Desk Guide is structured by having the aforementioned 20-40 questions and answers in the front. Then in the back I attach my favorite primers on the desk (that have been created normally by large investment banks).
The primers don't need to be gone through prior to starting unless you have lots of free time. However, if you do have free time you'll have a full-time analyst level understanding of the products traded on certain desks prior to beginning your internship. Needless to say, that would be highly impressive.
The nine Desk Guides included are on:
- The Credit Desks Guide: Covering some investment grade credit, high yield credit, distressed credit, and basic credit derivatives questions.
- The Rates Desks Guide: Covering primarily treasuries, TIPS, and interest rate swaps.
- The FX Desks Guide: Covering forwards, swaps, and spot FX across the G-10 and emerging markets.
- The CLO Desk Guide: Covering the world of collateralized loan obligations, how they're structured, and why the desk is highly interesting.
- The Municipal Bond Desk Guide: Personally I think this is one of the more underrated desks to be on and one to think about joining.
- The Money Markets Desk Guide: This is another underrated desk due to the diversity of issuers and how illiquid the market is.
- Equity Derivatives Desk Guide: Equity derivatives it the only equities-related desk I go over. I don't go over cash equities, as it is so heavily automated and likely not a great place to begin. Instead, the only area of equities I go over are equity derivatives.
- MBS Desk Guide: Mortgage-backed securities are still a very active and essential area of the trading floor. If you like more complex structures, then MBS desks are a great place to be.
- Regulation, Economics, and Corporate Finance Guide: This guide just broadly covers some things you should know that aren't particular to any one desk. Included are some questions and answers on regulations that impact sales and trading, important economic indicators to follow, and some basic accounting and corporate finance questions.
Who The Guides Are Really For
These guides are everything I wish I had prior to my interviews and prior to joining the firms I ultimately did as a summer analyst (including Goldman Sachs).
These guides aren't meant to teach you everything as obviously I don't know everything about every desk (and even if I did, then this whole course would be thousands of pages and absurdly complicated!).
Instead, these guides are meant to get you to really stand out in your interviews, be confident talking to professionals in sales and trading, and ultimately figure out what desk you should join once you get an offer.
Once again, if you take nothing else from anything I've written, I can't stress enough how important it is to have a game plan for what desks you want to spend time on or interact with during your summer analyst stint.
I've seen many very talented, intelligent people get put on the wrong desk and not live up to their potential. Likewise, I've seen many talented, intelligent people figure out too late what desk is really right for them.
You can't get to your internship not knowing roughly where you'd like to be. You have to have narrowed it down a little bit.
Your Next Steps
As you can probably tell if you've spent time on this site, I love writing about the world of sales and trading. I think it's a phenomenal place to be. Not just from a monetary perspective, but also from an intellectual perspective as well.
I hope you check out all the sales and trading guides, as that contains everything you need to know. I've also published some other articles on things like sales and trading HireVue questions, the summer analyst interview process, and a list of 19 of the most common sales and trading interview questions.
Good luck and be sure to let me know if you have any questions.