I had an interview last fall and this was one of the questions I got. I completely bombed it but I'm just curious what you guys would answer with. I'll post later with what he was looking for.
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buy and sell securities in a short time frame with educated guess.
For sell side flow, providing liquidity.
This is a good answer (to me). Mine was a terrible stammer full of "umms" and "ahhs" while I said something about "taking advantage of market movements to gain a profit"
Wish I had thought more along the lines of "What is the function of the S&T group?"
TeamLRAM http://teamlram.wordpress.com
That's kind of a bullshit question to ask someone whose never worked in S+T before. I definitely would have said something dumb like looking for value or arbitrage opportunities before my internship. Most people don't really know just how client focused s+t is (ex-prop).
So what did the guy actually say trading was?
That's what I never really get about S&T. Its primary focus is to provide liquidity but they must also protect the bank's capital and try to generate some PnL. So what if the market's crashing and everybody is trying to sell. Does the bank just buy to provide liquidity even though its likely prices will go lower? Or do they deny their clients to protect the firm's capital?
The guy said trading is about risk management. He said something along the lines about how trading is taking on risk and managing it to gain a profit.
TeamLRAM http://teamlram.wordpress.com
Can someone explain to me the incentive to providing liquidity in the marketplace? Isn't liquidity just a result of you selling, not a goal?
Bid/Ask spread.....
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