MS IED Derivs

Based on the most helpful WSO content, interviews for roles like Morgan Stanley's Institutional Equity Division (IED) Derivatives can vary depending on the specific desk and role. Here's what you should expect:

1. Market/Behavioral Questions:

   • If the role leans more towards Sales & Trading, expect questions that test your understanding of market dynamics, options, and volatility.
   • Be prepared to discuss recent market events, your views on volatility strategies, and how macroeconomic factors influence derivatives markets.
   • Behavioral questions will likely focus on teamwork, decision-making under pressure, and your ability to handle stress.

2. Quantitative/Technical Questions:

   • While not as intense as a pure quant trading firm, you should still expect some technical questions, especially if the desk has a strong quantitative focus.
   • Topics could include options pricing (e.g., Black-Scholes), implied volatility, and basic probability/statistics.
   • You might also encounter brainteasers or mental math questions, though these are typically less complex than those at quant trading firms.

3. Options Emphasis:

   • Given the derivatives focus, you should have a solid understanding of options strategies, volatility smiles, and how options are used in hedging or speculative strategies.
   • Be ready to explain concepts like delta hedging, gamma scalping, and the Greeks.

4. Preparation Tips:

   • Review books like Options, Futures, and Other Derivatives by Hull or Options Volatility and Pricing by Natenberg for a deeper understanding of options.
   • Practice mock interviews focusing on both technical and behavioral aspects.
   • Stay updated on market trends and have a couple of trade ideas or market insights ready to discuss.

Since Morgan Stanley recruits later, you have the advantage of more preparation time. Use it wisely to refine both your technical knowledge and your ability to articulate market views effectively.

Sources: I'm currently an equity derivatives/vol trader: Q&A!, Q&A: Career start and progression across IBD // Restructuring // PE special sits, Studying process, https://www.wallstreetoasis.com/forum/asset-management/sales-trading-interview-guide-gekkos-guidance-part-2?customgpt=1, The Best IBD SA OCR, Interviews and FT Offer Conversion Posts on WSO