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. 093Why sales and trading?FitCorephone / first roundMSMorgan StanleyGlobal Markets · London · 2024

   Say this

   Because the feedback loop is immediate and the scorecard is public. You form a view, you put on risk, and the market tells you within hours whether you were right. I want to be in a seat where the judgement is measured rather than argued about, and where the horizon is short enough to learn quickly.

   Then walk it

   1. Lead with the feedback loop, because that is the genuine structural difference from banking or research: your work is priced continuously and by someone who does not care about your reasoning.
   2. Then the second real difference: markets is a flow business, so the value you add is in pricing, liquidity and relationships, not in a document. Say you prefer being judged on decisions than on deliverables — and mean it, because it also means being wrong in public.
   3. Then be specific about which part of markets, because sales and trading is three jobs. Say whether you are drawn to market making, to a client-facing sales seat, or to a structuring or strat role, and give a reason rooted in something you have done.
   4. Then the evidence. Trading your own account is fine if you talk about process and risk rather than returns. A trading competition, a research project on market microstructure, or a market-making simulation all work. What is being tested is whether you have ever made a decision under uncertainty and reviewed it honestly.
   5. Then acknowledge the cost, because it is a job with real drawbacks: the hours are front-loaded around the open, the electronification of flow means the seat looks different from ten years ago, and a bad run is visible to everyone. Saying you know that is more convincing than enthusiasm.
   6. Close on why this firm's markets business rather than any other. Something concrete about their franchise — a product they are genuinely strong in, the structure of their graduate rotation — not a line from the careers page.

   Where candidates lose it

   Reciting 'fast-paced environment' and 'I love markets'. Both are unfalsifiable. The answer that works names the feedback loop as the reason, picks which of the three sales and trading jobs you want, and gives one piece of evidence with a process described rather than a return quoted.

   Expect next

   • Sales or trading, and why?
   • How has electronification changed the job you are applying for?
   • Tell me about a decision you made under uncertainty and how you reviewed it.

   Reported by candidates at Morgan Stanley (Global Markets, London, 2024). Source: Wall Street Oasis.

2. 094Which divisions sit inside sales and trading, and what does each one do?FitCorephone / first roundMSMorgan StanleyGlobal Markets · London · 2024

   Say this

   Broadly two halves: equities and fixed income, currencies and commodities. Within each you have sales, which covers clients, trading, which prices and warehouses risk, and structuring or strats, which builds the products and models. Then the cross-cutting businesses: prime brokerage, research, and electronic or systematic market making.

   Then walk it

   1. Equities: cash equities, equity derivatives — flow options and structured — delta one and swaps, convertibles, and prime brokerage sitting alongside as the financing business for hedge funds.
   2. FICC: rates, meaning government bonds and swaps; credit, both cash and CDS; foreign exchange, spot, forwards and options; commodities; emerging markets, which is often organised as its own cross-product desk; and securitised products.
   3. The functional split inside each desk: sales owns the client relationship and distributes ideas and axes, trading prices and manages the resulting risk, and structurers and strats build bespoke products and the pricing infrastructure. In electronic businesses the quant developers are effectively the traders.
   4. The distinction worth making, because it shows you understand the modern business: flow trading is a spread and market-share business that is increasingly automated, while structured and exotic trading is about warehousing risk you cannot hedge perfectly. Those are different skills and different career paths.
   5. Then say where you want to sit and why, in one sentence. That converts a list into an answer. 'I want flow equity derivatives because the pricing is quantitative and the client dialogue is real, and I would rather learn in a business with high ticket volume.'
   6. And show you know the boundaries: research is separate and walled from trading, prime brokerage is a financing business not a trading one, and treasury or the XVA desk are internal-facing rather than client-facing. Getting those boundaries right is the detail that signals you actually researched the firm.

   Where candidates lose it

   Giving a vague two-line answer, or naming desks without saying what they actually do. This is a homework question and a wrong answer says you did not do the homework. Finish by naming the desk you want and why, because a list with no preference reads as indifference.

   Expect next

   • Which of those desks do you want, and why?
   • How is flow trading different from exotics?
   • Where does prime brokerage sit and why is it not a trading business?

   Reported by candidates at Morgan Stanley (Global Markets, London, 2024). 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.