Interesting thread on Global Derivatives


I was browsing through the global derivatives forum today, and came across an interesting thread there :-- ... A cmu student writes about his interivew experiences....

The posting (with all the obvious disclaimers)is :-

Hi, I just started my 2nd semester at CMU, no prior experience in the industry. I don't know if most of you will find this useful (because most of this is already well known hints), but I'd like to share some of my impressions - I interviewed for summer programs in banks(S&T), hedge funds, other buy side shops, large and small.

First, if you are trying to decide between MFE programs, employers don't really seem to care from what program you come from, as long as it is a good one. I talked to most of my interviewers about what programs are well regarded, and names that popped were (random order):


I probably forgot 1 or 2 names.

One guy who runs a trading floor at a foreign bank in NY told me that they trust the institutions, which means that if you are coming from a good program, you're supposed to know your sh*t (his words).


Anyway, many banks didn't ask me any quantitative stuff at all. No "Black-Scholes with no paper and pen", no "balls in jars", no "how many books are there in the NY public library" kind of stuff. At least on the first round interviews, they are looking for good fits with culture and the group (although some banks never asked me a single quantitative question at all, during the whole process! ). Being able to talk (eloquently) about the US economy, fed actions, what's up with stock, fixed income and credit markets proved more important than knowing how to hedge an option. I recomment reading the WSJ and The Economist (these are a "must read", feel free to include any other readings such as, or any other thing you like).

Also, know your resumé and motivations. There's no sense in not knowing your past activities, being able to explain projects you worked on, why you chose to pursue a career in finance, what are your motivations, etc.
These are all standard questions, and if you are not ready, they might see it as if you are no interested at all. "Heard on the Street" has most of these non-quantitative questions, so do your homework...

Watch out for the traders. As you go through 2nd rounds and further, these guys are the ones who will really decide if they should take you or not. They are looking for speed and boldness, so it doesn't only matter if you solved the " lightswitch " problem, but also how long it took you to do it. If you ask for paper to solve a simple problem, boy, are you in a tough spot. A trader will also ask you about general economics - what drives his specific market. Expect also risk-neutral pricing questions, the greeks, and all the bond stuff. If you spit out the formula for duration, instead of explaining what it means, he will see you as "a nerd who doesn't know what he's talking about" - and traders are usually right. Some are real flaming as$h%#^s, but hey, if you can't stand the pressure during an interview, will you be able to take risk on millions of dollars?

hedge funds

Really, really nicer people - but my sample space is small, so I could be wrong.
They dig deeper. They will not take the time to teach you basic stuff, so their target is usually experienced professionals (or very smart newbies), and their questions are more like "what happens to gamma as maturity goes to infinity?" or "if you sell a call option and hegde it completely, what's your expected return?" instead of "what's delta?". Most of my interviews with them were phone interviews, which I don't like. Knowing more about different strategies that hedge funds use is a good idea - but don't trust the books... they're doing new stuff now. Call you friend at Citadel and ask him what's new, but don't expect him to explain to you the details, obviously.

buy-side shops

"Do I look like a programmer?". That's what I wanted to ask them all the time.
I got on the hot seat because I didn't know details about one specific container type in C++ - I felt like interviewing for microsoft. Expect a lot of programming questions - which means the job usually involves a lot of programming, even though they won't tell you that on the job description. These shops usually want someone who can model, implement and test strategies. In other words, programming, programming and programming. But that's finance today. A model is only as good as your implementation and its proven ability to transform bits in someone else's bank account to yours. It is challenging in a different way, comparing to a trading floor. You'll be squeezing $.01 from a stock here, $.0001 from a bond there - and you'll be competing against the smartest people in the world. According to a guy at Goldman, technology pays off, so I guess it does.

These are my main impressions, which will probably change in the following months. I just felt like I should share this with global derivatives, since I took my first steps here, reading from other's inputs. Sorry for the spelling, I'm working on that.

Yan He

This is a really good one I've read recently on Global-derivatives, especially I had mostly the same experience in the course of looking for internship.

After 8 interviews, I finally landed an internship, which includes big IBs, small investment funds, etc. It's a great process to learn and to improve myself.

Actually, before all these interviews, Mrs. Barbara Lambert of Career Development Center reviewed twice my resume and gave me many great tips for interviews.

Usually, the first round for Summer Internship is more about behavior questions than technical ones. There're lots of books talking about this kind of questions. And for small firms, I was asked sth. like "Tell me something about martingale, stopping time", "What is volatility smile"...most are basic knowledge they assume MFE students should know.
So many interesting experiences I would like to share. Maybe you can just stop by quant lab, I would like to get more info from ppl who is also actively looking internship/job.

Good luck to all.