Sales & Trading
11 equities questions of the kind asked in sales & trading interviews. Each carries a model answer, the concepts a complete response must hit, and graded feedback on your own attempt.
A foundational screening question for analysts joining benchmark-aware equity teams.
An equity index contains only three freely tradable companies: A has a free-float market capitalisation of $500m, B has $300m and C has $200m. Calculate each index weight. Why do most broad equity indices use free-float…
An accessible calculation that tests whether a candidate can connect earnings to an equity valuation.
A company earns $120m of net income and has 60m diluted shares. Its share price is $30. Calculate EPS and P/E. If earnings rise 10% next year and the P/E stays unchanged, what share price does that imply?
Equity and index desks use this to test whether candidates can connect an individual stock move to a benchmark move.
An index has only two stocks: X is 80% of the index and rises 5%; Y is 20% and falls 10%. What is the index return, and why might this differ from the return of an equal-weighted index?
A foundational arithmetic check used before an interviewer moves to hedging or relative-value trades.
You buy 1,000 shares of Company A at $40 and short 1,000 shares of Company B at $60. One week later A is $44 and B is $66. What is the P&L on each leg and on the combined position before fees?
A first-round equities question that checks whether a candidate understands the basic choice a client makes before trading.
A stock is quoted at $49.90 bid and $50.10 offer. Explain the difference between a market order and a limit order. Which would you use to buy 5,000 shares now, and which would you use if you refuse to pay more than…
An accessible corporate-action question that tests whether a candidate separates a price change from a change in value.
A company trading at $120 per share announces a 3-for-1 stock split. Explain what happens to a shareholder with 50 shares, the share price, and the company's market capitalisation immediately after the split.
An equity-operations fundamental used to test whether a candidate understands that execution and settlement are separate events.
You sell 10,000 shares on Monday but your custodian cannot deliver the shares on settlement date. What has happened, what are the likely consequences, and what would you do first?
A first-round long/short equity question testing whether a candidate distinguishes results from expectations.
A company reports quarterly EPS of $1.10 versus consensus of $1.00, yet its share price falls 8% that day. Explain how that can happen. What would you check before deciding the market reaction is wrong?
Asked in equity trading, prime brokerage and long/short fund interviews.
Walk me through the mechanics of a short sale. Why is shorting structurally harder than going long, and what is a short squeeze?
An international-equities case that tests whether a candidate can reconcile equivalent listings before calling a price discrepancy an arbitrage.
One ADR represents two ordinary shares. The ordinary shares trade at €30 each, EUR/USD is 1.10, and the ADR trades at $63.00. Is the ADR rich or cheap on a simple parity basis? What must you check before trading the…
Asked at market makers and any desk touching ETF flow.
How does an ETF stay close to its net asset value? What happens when it doesn't?
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Firm names indicate where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with the firms named.