[An Interview With A Share Broker Introduction Pdf Download
Addison Mauldin
Buying and selling stocks is not for the faint of heart. Stockbrokers handle vast amounts of money and work personally with their clientele. Stockbrokers must constantly be on the job in order to keep a finger on the pulse of the stock market, and they must be prepared to make quick decisions in order to turn a profit for their clients.
Explanation: This is a type of technical question. As a licensed stockbroker, you should expect that most of the interview will consist of technical questions. These questions are meant to explore the depth of your knowledge in this field and ensure you have the background to be successful in this role.
Explanation: This is another technical question the interviewer will ask to ensure you understand the terminology stockbrokers use. Technical questions are best answered straightforwardly and succinctly. The interviewer will ask a follow-up question if they need additional information.
Explanation: This is yet another technical question. Many of the questions you will be asked as a stockbroker involve comparing different types of equities, transactions, or terms. You should be able to define each of these and then state the advantage one may have over another in a specific situation.
Explanation: This is a more in-depth technical question. As the interview progresses, the questions will become more difficult or specific in nature. This occurs because the interviewer is gaining confidence in your capabilities and wants to learn more about your skills and experience.
Explanation: In some types of technical questions, you will be asked for a definition of a term and then an explanation of its benefits or use in your profession. The best way to prepare for interviews involving technical questions is to study a guide like this one. You should practice these questions out loud so that you become comfortable providing answers to them.
Explanation: Again, the interviewer is asking a more in-depth technical question to see if you understand how one characteristic of a stock impacts another characteristic. You should be able to answer this question easily if you practice these questions and review the terminology used by a stockbroker before the interview.
Explanation: This is yet another question of a technical nature that is asking you to define a term and describe how it is used in the investment industry. By now, you should recognize these types of questions and be able to formulate your answer to them immediately.
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The simplest derivatives are call options and put options on stocks, which give you the right, but not the obligation, to buy or sell a stock at a strike price within a certain period.
Gamma is highest when the option is at-the-money (ATM) because delta is the most sensitive to changes in the underlying price there; it decreases as an option moves further out-of-the-money (OTM) or in-the-money (ITM).
The YTM is used to price bonds; if the YTM is below the coupon rate, the bond is trading at a premium to face value, and if the YTM is above the coupon rate, the bond is trading at a discount to face value.
Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.
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Hi Brian, thank you for the article. I have an interview next week for a UK sales position which is in the prime services division (global markets) for an investment bank. I was wondering if there would be anything different to expect given that its geared towards the prime brokerage business as opposed to strictly working on a specific product/asset/industry group? It is a junior sales role which involves assisting the sales team in client management as well as the suite of products offered by a typical PB group such as global custody, settlement, execution, cap intro, financing/leveraging, regulation and research etc.
So far I have been researching the prime brokerage business and learning more about this, as well as S&T more broadly including relevant technical knowledge as you have listed (different instruments, markets, stock pitches, global macro, current affairs).
Is there anything more specific I should focus on for this business line (beyond the normal preparation)? For instance, are there technicals I should definitely focus more on (such as synthetic PB, the greeks)? Is there anything specific they look for that would differ from a traditional S&T role in terms of personality or skillset?
Investment banking interviews begin the same way as any other interview: getting to know one another. The interviewer will likely give you an overview of the company and the position, and ask you some questions about yourself.
Your answer to this question should be brief and highlight any past finance experience you have. This is your chance to mention internships, programs, or previous jobs that are highly relevant to the role. You should also tell the interviewer about yourself and give a quick overview of your education, especially if you had relevant coursework.
Interviewers want to see that you speak the same language as them, so they may ask you about a company that you admire, a stock you personally have invested in, or a recent merger or acquisition that you find fascinating.
The technical portion of an investment banking interview involves specific questions about accounting, mergers and acquisitions (M&A), IPOs, corporate finance, and valuation. The questions can seem daunting, but remember: you are not expected to be an expert already. The interviewer wants to see that you have some core investment banking skills and can handle a bit of a challenge, so these questions are common for entry- and junior-level roles.
Terminal value (TV) is the estimated value of a company after a specific period of time, and it is a core element of DCF analysis. There are two ways to calculate terminal value: the growth in perpetuity approach or the exit multiple approach.
The cost of equity is how much shareholders are expected to make from their investment in a company, while the cost of debt is the rate of return that bondholders expect from investing. So, the cost of equity is typically higher, since shareholders are not guaranteed fixed payments and they assume a higher risk when investing.
Since the cost of debt is generally cheaper than the cost of equity, there are quite a few situations where issuing debt makes more sense than issuing equity. Issuing debt instead of equity makes sense if:
Current assets include items found on a balance sheet, such as accounts receivable, inventory, and prepaid expenses, while current liabilities are short-term debts like accrued expenses, deferred revenue, and accounts payable.
If a company has a positive NWC, it means the company is able to cover all short-term liabilities with their current assets. A negative NWC would mean the company cannot cover these liabilities, though, and indicates that the company either needs to increase cash reserves or seek more financing.
Your interviewer will likely ask some brain teasers and word problems so they can understand how you process complex problems. Investment banking requires strong analytical skills, so being able to analyze a hard question and tackle it logically is important. Some questions may seem outlandish, while others may be specific to investment banking.
This question is to see your logical thinking in action. Some responses to this include the fact that round covers cannot fall into round holes and can be easily rolled if they are to be moved. Additionally, round covers are easy to fit and align.
This question displays how you break down difficult problems. There are a lot of different ways to tackle this question. For example, you could ask an engineer who is familiar with aircraft carriers, or try to gauge how much individual components of the aircraft carrier weigh. The solution itself is less important than showing how you work through this problem.
Yes, definitely, that was a different time in my life. I have been trying for years to get back to that level of trader. I had gone from making millions of dollars to not being able to turn a profit overnight. Shortly after the book was written, there were many changes primarily because of the algorithms starting to take over which really hurt my short-term trading style. I was one of the fastest traders in the world at that time in terms of clicking the mouse, generating 10% of the E-mini S&P volume on most days.
Dr Brett N. Steenbarger introduced me to Bookmap. The platform has given me a better understanding of the core algorithms. The daily morning seminars with Bruce interpreting the liquidity, the order flow, and delta, has been very helpful too. My trading has improved overnight. The combination of my experience of reading the charts, as well as liquidity and order flow, makes a huge difference.
It is interesting to see how our interviewees approach Bookmap since the purpose of the interviews is educational. At least half of our interviewees that tried Bookmap, liked it a lot and continued using it. What about those seven years, when you were trying to reinvent yourself? Which tools were you trying before Bookmap?
The most important part is controlling your emotions. I, like most traders, do not like losses obviously, but I get more emotional when I do not understand what is going on. I can take a loss, but the most frustrating thing is taking a loss and not understanding the reasons you were wrong. The markets are not random, otherwise, there would be no point in trading. However, it can feel very random when staring at the market ladder and bar charts.
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