Interviewing Guide for fund PM/trader roles
I've gone thru a couple interviews for portfolio manager seats, and i was not prepared for a few questions they asked, so i thought i'd list them here for future reference. The people who interview you for a PM seat are very smart, and they are risk averse...so they focus more on losses than gains.
1) your detailed P&L history, sharpe ratio, standard deviation P&L, largest loss, win/loss %
2) if you run your strategy current position thru the last 12 years of daily closes, what is the worst 1 day performance
3) what is your edge? describe it, in great detail.
4) how do you scale your strategy to larger size?
To add to the above: (1) Statistics, aspects of execution, risk metrics and process. Also, if you have your own approaches to risk, this is the moment to share them (e.g. "i trade volatility proucts, so Sharpe is not a very good metric for what I do" or "duration does not cover all the risks").
(2) I'll translate that into a more human language. Definitely know the answer to "what needs to happen for you to drop a lot?" and more or less know if that has happened before. In fact, that's probably the most important question you are going to be asked if you are shooting for a senior role
(3) Definitely be ready to discuss the strategy(ies) you have in great details, but don't be shy to say "sorry, this bit is classified" if you feel like the conversation is going nowhere. There are a lot of people (including myself), that are doing informational interviews.
(5) Be able to explain what your strategy is and why it works for to someone who knows nothing about your product or even area. E.g. if you are trading fixed income, be ready to explain what you do and how the risk works to an equities long/short PM.
I know this is a old post but: What is an informational interview and what benefit do you get from it?
senior traders, portfolio managers, etc.....they post opening for traders and portfolio manager positions...and interview people who apply..and then ask the question "so, whats your edge?...explain it to me" hoping that somebody with an existing strategy will explain what it is and how it works....not so they can hire you...but so they can steal the idea and implement it themselves. As a junior person this is not an issue because you probably don't have any real IP (intellectual property) but as you get more senior (say, 10 years in the business) you tend to learn / discover things that are indeed valuable information, and you should generally keep these "secrets" to yourself if you plan to monetize them in the future.
Mind if I PM you a question?
sure
I find this type of evasiveness fairly silly, and typically most emblematic of fairly junior traders who think they have found some holy grail or secret sauce. As you get more experienced, you realize that there is no such thing, and if your edge can be gleaned and copied from a 30 minute phone call, then it probably isn't really an edge at all.
really depends on the type of strategy. there are some quant strategies that very few people know about, for example, some of the strategies at renaissance that are closely guarded secrets. every senior trader i've worked with has been very secretive about their more profitable strategies (i used to be the guy who would implement their ideas into code and have singed numerous NDAs). Most often these strategies are constrained in some way (max position size before market impact eliminates the statistical edge, etc...) but they are out there....and very few people ever know about them.
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