Our equities interview question competition is over. Someone has won an iPad. If it wasn’t you and you sent in a question, then sorry.
We’ll be publishing the questions over the next few weeks. In the meantime, here’s the winner, allegedly asked in an interview for a junior cash equity trading role at HSBC.
THE QUESTION: If you were a stock, describe yourself in as much detail as possible, such as your valuations etc. Further, what would be the most actively traded options on you?
This is a little like the old how do you value yourself question, i.e. ‘DCF yourself’ through your earning potential etc., but since the question is asked in such an open way, there’s the potential to answer it as you wish.
This is an opportunity for you to demonstrate your basic equities knowledge and simultaneously boast about yourself without sounding too arrogant.
So, outside of guestimating your future earnings (analysis of career path) and your future expenses (house, holidays, kids etc.), you can talk about your benefit/yield to investors (e.g. equivalent to a dividend stream in equities) – your return to the world if you like.
In a financial sense, this return could be how much you give to charity. In a non-financial sense, it could be what kind of ‘corporate’ social citizen you are (e.g. your carbon footprint).
You could also talk about the type of investor base that would trade you. For example, you might say, “Since I am a relatively low risk, sound stock, I would be owned by a strong long only base.”
The intelligent retort would basically give some such and other examples and then assert that there are very many details you could give as equities are such a complex asset class.
There are numerous ways to answer the second part of the question, but it allows you to be a little more playful. For example, if said with sufficient modesty, you could claim: “I think my Mother would be a seller of the downside and a large buyer of deep upside calls.”
The interviewer may probe further and ask the strike of the upside calls, the point is to first of all see if the candidate has any options knowledge and then assess how much they rate themselves (a strike price that is too high either means they are very arrogant or will lead to questions why – if they have so much upside potential – have they not realized more of it already?).
The question is so generic, you can really take it where you want, but if answered well, you can demonstrate sound equity knowledge as well as allowing you to boast about your own potential.