Zero to Hero - Graduate L/S Execution Trader Interview

What topics do I need to cover for a graduate/junior execution trader interview at a equity long/short hedge fund?

I have experience in IB/PE and HF only in a research capacity. I esssentially have zero knowledge on trading and don't even know where to begin.

What do I need to do to go from zero to hero in less than a week? I would greatly appreciate any guidance. The more specific the better.

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WSO Monkey Bot

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9mo

To prepare for a graduate/junior execution trader interview at an equity long/short hedge fund, here’s a roadmap based on the most helpful WSO content:

1. Understand the Role of an Execution Trader

Execution traders focus on implementing trades efficiently, minimizing market impact, and ensuring best execution. They are not typically responsible for generating trade ideas but must understand the strategy and rationale behind trades.

2. Key Topics to Cover

Market Microstructure: Learn how markets operate, including order types (market, limit, stop), bid-ask spreads, liquidity, and slippage.
Trading Strategies: Understand basic long/short equity strategies, including how funds profit from price discrepancies, hedging, and leveraging.
Order Execution: Study algorithms like VWAP, TWAP, and implementation shortfall. Know when and why each is used.
Risk Management: Familiarize yourself with concepts like position sizing, stop-loss orders, and exposure limits.
Behavioral Questions: Be ready to discuss your ability to handle pressure, attention to detail, and decision-making under time constraints.
Technical Questions: Expect questions on financial modeling, valuation, and how macroeconomic events impact equity markets.

3. Practical Preparation

Follow the Markets: Start tracking major indices, sectors, and stocks. Understand recent market trends and news.
Mock Trading: Use a demo account to practice placing trades, understanding order books, and observing market movements.
Stock Pitches: Prepare at least one or two stock pitches. Even though this isn’t the primary focus of an execution trader, it demonstrates your understanding of the fund’s strategy.
Case Studies: Be prepared for case studies or scenarios where you might need to explain how you would execute a trade or manage a large order.

4. Resources to Leverage

WSO Threads on Trading: Dive into discussions about execution trading and hedge fund interviews to gather insights.
Books and Articles: Read books like "Algorithmic Trading" by Ernest Chan or articles on trading strategies and market microstructure.
Networking: Reach out to current or former execution traders for advice and insights into the role.

5. Mindset and Presentation

Show a passion for learning and a strong work ethic. Hedge funds value candidates who are eager to grow and adapt.
Be confident but humble. Execution trading requires precision and the ability to admit mistakes quickly.

By focusing on these areas, you can go from zero to hero in a week and make a strong impression during your interview. Good luck!

Sources: Sales & Trading Interview Guide - Gekko's Guidance Part 2, Interview with Simple As...Hedge Fund Analyst, Conversation with an Equities Sales Trader, https://www.wallstreetoasis.com/forum/asset-management/sales-trading-interview-guide-gekkos-guidance-part-2?customgpt=1, Q&A: ex-bank trader now running crypto hedge fund. questions?

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