Derivatives Foundation interview preparation

Questions

100

Traced to a firm

29

Firms

19

Updated

September 2026

Asked at

All firmsMSMorgan Stanley4Nomura4Akuna Capital2Amundi2HSBC2PIMCO2Bank of America1Barclays1Citadel1DRW1Goldman Sachs1Jane Street1Millennium Management1Mizuho1Old Mission Capital1RCRBC Capital Markets1Scotiabank1UBS1Wells Fargo Securities1

Topic

All topicsForwards and futures10Options basics8Option pricing7The Greeks10Volatility7Option strategies9Swaps and rates7Credit derivatives4Market structure and clearing6Indian derivatives8Trading and markets9Brainteasers6Fit9

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseMarket viewBrainteaserFit

1. 082Pitch me a ten-year trade.Trading and marketsHardsuperdayBank of AmericaSales and Trading · London · 2025

   Say this

   A ten-year horizon means the trade has to rest on a structural change, not a cycle, and it has to be expressible in an instrument that survives ten years. So: name the structural driver, name the instrument, state the carry, and be explicit about what could make the structure wrong rather than just the timing.

   Then walk it

   1. Pick a driver that is demographic, fiscal, technological or regulatory — something that does not mean-revert inside the horizon. Ageing populations and their effect on savings and fiscal deficits, the electrification of energy demand, the fiscal cost of defence rearmament in Europe, or the structural build-out of power capacity for computing.
   2. Then the instrument, and be realistic. Nothing liquid trades for ten years in options, so a long-horizon view is usually expressed in a forward-starting swap, a curve steepener rolled forward, physical exposure, or equity in the beneficiaries. If your idea needs a ten-year option, say that the structure would have to be a bespoke OTC trade and price accordingly.
   3. State the carry explicitly. A view that costs 3 percent a year to hold needs the structural move to be very large, and most long-horizon trades fail on carry rather than on being wrong. The best structural trades are ones where you are paid to wait.
   4. Give a worked example rather than a theme: 'I would be a receiver of the very long end in a country with a shrinking workforce and a pension system that has to buy duration, funded by paying the belly, because the demographic flow is a known buyer for a decade.' Name the flow, not the feeling.
   5. Then the falsifier at the structural level. Not 'if it goes against me', but 'if the demographic assumption is offset by immigration policy, or if the fiscal response changes the supply of duration, the trade is wrong in kind rather than in timing'.
   6. And the risk management: a ten-year view held in a mark-to-market book still has to survive drawdowns, so I would size it as a carry position with periodic reassessment, not as a conviction trade I refuse to cut. Being right in 2035 is no use if the position is closed in 2027.

   Where candidates lose it

   Pitching a cyclical view with a ten-year label on it — 'I think rates go down'. The question is testing whether you can separate structural from cyclical and whether you know what instruments actually exist at that horizon. Naming the carry and the instrument constraint is what makes it sound like a desk answer.

   Expect next

   • What instrument actually exists at that maturity?
   • What does the trade cost you to hold each year?
   • What would tell you the structure, not just the timing, was wrong?

   Reported by candidates at Bank of America (Sales and Trading, London, 2025). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.