In this article
Market basics
What does a sales and trading desk do?
A sales and trading desk helps clients buy and sell financial instruments. Salespeople handle the client relationship, traders quote prices and manage the resulting positions, and the desk earns mainly from the gap between buy and sell prices. Job titles and duties differ between firms, so describe the general shape and ask about the specific desk.
Why it is asked: it shows whether you know the job before applying. More on this topic: quantitative finance interview questions, the complete guide.
What is the bid-ask spread?
The bid-ask spread is the difference between the highest price a buyer will pay and the lowest price a seller will accept. The U.S. Securities and Exchange Commission (SEC) Investor.gov glossary (accessed October 2026) says the bid "will almost always be lower than the ask". Wall Street Prep writes it as lowest ask minus highest bid.
Why it is asked: the spread is the starting point of almost every desk question. More on this topic: quantitative finance interview questions.
How does a market maker make money from the spread?
Market making is the practice of quoting both a bid and an ask so clients can always trade, and earning the gap between them. Britannica puts it briefly: "The spread is the market-maker's edge" (accessed October 2026). With a quote of 99.98 bid and 100.02 ask, the spread is 0.04, and buying 1,000,000 shares from a client at the bid and selling them to another at the ask earns a gross 40,000 in currency units.1 The same logic drives the make a market interview question.
Why it is asked: it tests whether you see the spread as payment for risk. More on this topic: quantitative finance interview questions.
Is the spread a fee?
No. The spread is the gap between two quotes, not a charge added to a trade, and commissions are separate. A client who buys at the ask and sells straight back at the bid loses the spread, which is why it behaves like a cost, but it is the market maker's payment for holding the position in between, as the sources above describe.
Why it is asked: it catches a common misconception. More on this topic: quantitative finance interview questions.
What is the risk in market making?
The risk is inventory: after a client trade the desk holds a position, and the price can move before it can be sold. The spread earned is small and a price move can be large. Holding 1,000,000 shares that fall by 0.50 loses 500,000 in currency units, against 40,000 of gross spread in the earlier example.1 Desks therefore hedge or pass positions on quickly.
Why it is asked: a strong answer shows risk comes before revenue. More on this topic: quantitative finance interview questions.
What is the difference between market making and proprietary trading?
In market making the desk takes positions because clients ask it to trade, and earns the spread. In proprietary trading the firm chooses positions to profit from its own view of prices. The Volcker Rule, finalised by U.S. regulators in the Federal Reserve's December 2013 final-rule release, restricts proprietary trading by U.S. banking entities while allowing market making.
Why it is asked: sales and trading is often confused with proprietary trading. More on this topic: quantitative finance interview questions.
What is the difference between a salesperson, a sales trader and a trader?
As a general convention, a salesperson manages client relationships and passes on ideas and prices, a sales trader sits between client and desk and handles client orders and execution, and a trader quotes prices and manages the book. Some firms also have structurers who design custom products. Names and boundaries vary by bank.
Why it is asked: choosing a role needs a real understanding of each. More on this topic: quantitative finance interview questions.
Bonds and rates
What happens to a bond's price when interest rates rise?
The price falls. A bond pays fixed cash, so when market yields (the annual return a buyer earns at the current price) rise, those payments are discounted more heavily. A five-year bond with a 4% annual coupon (its yearly interest payment as a share of face value, the amount repaid at maturity) prices at 100 at a 4% yield, 95.67 at 5% and 91.58 at 6%, and rises to 104.58 at 3%.1 The price-yield curve is bowed, so a fall in yield adds slightly more than the same rise subtracts.
Text description of the diagram
- The five-year bond prices at 95.67 at a 5% yield and 91.58 at 6%.
- It rises to 104.58 at a 3% yield.
Why it is asked: it is the first fixed-income check. More on this topic: quantitative finance interview questions.
What is duration?
Duration is a measure of how much a bond's price changes for a small change in yield. For the five-year 4% bond the modified duration is 4.45, so a one percentage point rise in yield predicts about a 4.45% price fall; the actual fall is 4.33%, because the curve bends.1 A longer bond or a lower coupon has higher duration.
Why it is asked: it separates a memorised rule from a usable estimate. More on this topic: quantitative finance interview questions.
What is DV01 and how do you calculate it?
A basis point is one hundredth of a percentage point, and DV01 (dollar value of one basis point) is the change in a position's value for a one basis point move in yield. For the five-year bond it is 0.0445 per 100 of face, so 1,000,000 of face moves by about 445 in currency units per basis point.1 Traders use it to size and hedge rate risk.
Why it is asked: it shows you can turn a concept into a hedge size. More on this topic: quantitative finance interview questions.
Which falls more when yields rise one point, a coupon bond or a zero-coupon bond of the same maturity?
For the same maturity, the zero-coupon bond falls more, because all its cash arrives at the end and is discounted longest. A five-year zero priced at 4% is 82.19 and at 5% is 78.35, a fall of 4.7%, against 4.3% for the five-year 4% coupon bond.1
Why it is asked: it tests the link between cash-flow timing and rate risk. More on this topic: quantitative finance interview questions.
What is the yield curve, and what does an inverted curve signal?
The yield curve is a line showing the yields of bonds from one issuer, such as the U.S. Treasury, across different maturities; the Treasury publishes its method for building it (accessed October 2026). It is inverted when short-term yields are above long-term ones. Markets often read that as an expectation of lower future rates or slower growth, but it is a signal, not a forecast.
Why it is asked: it tests whether you can read the market's rate expectations. More on this topic: quantitative finance interview questions.
How does a central-bank rate rise affect bonds, the currency and equities?
Usually, bond yields rise and prices fall. The currency often strengthens, other things equal, because higher returns attract capital. Equities are mixed: higher borrowing costs and discount rates weigh on them, but a rise the market already expected may change little. Say that surprises matter more than the move itself, and that effects vary with context.
Why it is asked: it tests cross-asset thinking. More on this topic: quantitative finance interview questions.
Knowing it is half the job. Saying it is the other half.
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What is put-call parity?
Put-call parity is a relationship tying a call, a put, the stock and a bond together, formalised by Stoll (1969): call minus put equals stock minus the present value of the strike, for European options (exercisable only at expiry) on a stock with no dividends. With stock 100, strike 100, a 5% annually compounded rate and one year, the strike's present value is 95.2381, so a call at 10.00 implies a put at 5.2381 (illustrative).1
Why it is asked: it checks that you can price one instrument from others. More on this topic: quantitative finance interview questions.
How would you trade if the put was quoted below its parity value?
Buy the cheap put, buy the stock and sell the call, financed at the rate. In the illustrative case above, a put quoted at 4.5 against a parity value of 5.2381 leaves a gap of 0.7381 per unit.1 In real markets, costs, dividends and early exercise erode or remove such gaps, so say that out loud.
Why it is asked: it shows whether you know the theory and its limits. More on this topic: quantitative finance interview questions.
What is delta, and how do you hedge it?
Delta is the change in an option's price for a one-unit change in the underlying price. If you are long 100 call contracts of 100 shares each and each call has a delta of 0.6 (illustrative), the position behaves like 6,000 shares, and selling 6,000 shares leaves it hedged for small moves.1 The hedge needs adjusting as delta changes.
Why it is asked: it is the basic risk-management step of an options desk. More on this topic: quantitative finance interview questions.
Numbers and probability
What mental maths should you expect?
Expect fast arithmetic without a calculator, such as 15% of 240 (36), 17 times 24 (408) or one seventh as a decimal (0.142857).1 Practise splitting numbers, for example 17 times 24 as 17 times 20 plus 17 times 4. The format varies, so treat this as practitioner convention.
Why it is asked: a strong answer shows speed with a stated method. More on this topic: quantitative finance interview questions.
How long does money take to double at 6% a year?
Use the rule of 72: divide 72 by the rate, giving 12 years.1 The exact answer is the natural log of 2 divided by the natural log of 1.06, about 11.90 years, so the shortcut is close. Say it is an approximation that works best for rates around 6–10%.1
Why it is asked: it tests a shortcut and awareness of its error. More on this topic: quantitative finance interview questions.
Would you pay 10 to roll a die and receive three times the number shown?
Compare the cost with the expected payout. The average roll is 3.5, so the expected payout is 10.5, slightly above 10, and the bet is mildly favourable.1 A strong answer adds that one roll is risky, and that you would accept it only if you could repeat it or the stake is small. Repeating it turns your winnings into a random walk, the subject of Markov and random-walk questions.
Why it is asked: it separates expected value from appetite for risk. More on this topic: statistics for quant interviews.
Market views and motivation
Why do you want to work in sales and trading?
Give a reason tied to the work: fast decisions with prices moving, direct contact with clients, and a market you already follow. Then show evidence, such as a trade idea you tracked. Say why you prefer sales (client relationships and ideas) or trading (pricing and managing risk), since the two suit different strengths. Avoid money as the main reason.
Why it is asked: it tests commitment and whether you understand the role you chose. More on this topic: quantitative finance interview questions.
What is happening in the markets right now, or walk me through a recent market move?
Use a method, not a list of headlines. Pick one asset you follow, name the main driver of its recent move, and say what it means for a client, for example whether to hedge or wait. Add what you would watch next and what would change your mind. Check the current facts the same day, and quote only prices you can verify.
Why it is asked: it shows whether you follow markets and can reason from them. More on this topic: quantitative finance interview questions.
Pitch me a trade or a stock idea.
Give a short structure: the idea, why now, what could make it wrong, and how you would size and exit it. Ask how long you have. State a view you can defend and a clear risk, and know the current price levels you mention.
Why it is asked: a strong pitch shows judgement and honesty about risk. More on this topic: quantitative finance interview questions.
Follow-up questions
What are the most common sales and trading interview questions?
The twenty-two above cover the recurring themes: how the desk earns, rate risk, options basics, quick arithmetic, motivation and a market view. Also prepare questions on your own experience and a clear reason for choosing the desk over other finance roles.
How do you prepare for a sales and trading interview?
Learn the definitions on this page until you can derive the numbers yourself, practise mental arithmetic daily (the statistics for quant interviews guide covers expected value and probability from zero), and follow a few markets closely enough to explain a recent move. Rehearse each answer aloud and keep it short; saying them out loud to a friend or in a recorded run-through is the quickest way to find the weak spots. The quantitative finance guide sets out the wider path, and the interview preparation guides on every topic show the neighbouring topics.
Are the questions the same at every bank?
No public source says so, and this page does not claim any bank asks a particular question. Desks differ in products and style, so expect the same fundamentals but different emphasis, and read the role description for the asset class.
What should I do if I do not know the answer?
Say what you do know, state an assumption, and reason step by step. A clear method with a labelled guess is stronger than silence or a confident wrong answer.
- The bid-ask spread is ask minus bid, and it is the market maker's payment for taking inventory risk.
- Bond prices fall when yields rise; duration and DV01 turn that into a number you can hedge.
- Put-call parity prices one option from the other and the stock; real-world costs narrow the gaps.
- Delta turns an option position into an equivalent share position to hedge.
- Show a method for mental maths, market views and expected value, and state risks in any pitch.
Sources
- Bid Price/Ask Price (Investor.gov glossary) — U.S. Securities and Exchange Commission (Investor.gov), 26 Oct 2026
- Bid-ask spread (Britannica Money) — Encyclopaedia Britannica, 26 Oct 2026
- Bid-Ask Spread (Wall Street Prep) — Wall Street Prep, 26 Oct 2026
- Agencies issue final rules implementing the Volcker Rule — Board of Governors of the Federal Reserve System, 10 Dec 2013
- Treasury yield curve methodology — U.S. Department of the Treasury, 26 Oct 2026
- The Relationship Between Put and Call Option Prices (Stoll, Journal of Finance) — The Journal of Finance (Stoll, 1969), 1 Dec 1969
