Is It Appropriate to Ask Candidates About Their Financial Strategies During a Trading Job Interview?

When interviewing for a position in trading, it is natural for hiring managers to want to know how candidates plan to approach financial strategies. However, the appropriateness of asking such questions depends on several factors, including the candidate's comfort level, the job's requirements, and the company's policies. This article explores the nuances of asking about financial strategies in trading job interviews, providing insights for both employers and candidates.

Understanding the Role of Financial Strategies in Trading Interviews

While it is essential for candidates to be able to describe their financial strategies, employers must be cautious about delving too deeply into specific tactics. According to Google's SEO standards, it's crucial to provide informative content that benefits both organic search and user engagement. This section provides a balanced view on this important topic.

The Importance of Approaches Over Exact Strategies

Focus on the Approach: It is more appropriate to ask about the approach rather than the exact strategy. As a seasoned interviewer in the financial sector, I would often ask candidates to describe their broader approach to trading. This is because any candidate might potentially leverage the information provided and adapt it, thereby nullifying an advantage. Asking about the approach demonstrates that the candidate understands the variables and factors that influence asset forecasting.

Technical Questions and Candidate Behavior

Technical Questions: If a candidate is uncomfortable discussing their strategies, this may prompt the interviewer to shift to more technical questions. This approach allows the interviewer to gauge the candidate's technical knowledge while steering clear of proprietary information. It's possible that the candidate may possess some technical insights that the interviewer does not have. However, in most cases, such candidates are trying to deflect questions they cannot answer.

Field-Specific Ethical Considerations

Swaps Trader Example: For instance, when interviewing a swaps trader, one might ask, “How did you find the curve?” If the candidate responds, “We use a number of ways but I don't want to discuss our approach because it is proprietary,” this response could be seen as suspicious. Similarly, if a candidate mentions making money through “RV” but refuses to discuss the specific details, this also warrants suspicion.

Statistical Arbitrage and Systematic Trading: In fields like statistical arbitrage and systematic trading, candidates may have some proprietary insights that set them apart. However, the general approaches in these areas are often well-known and understood. It is less common for candidates to have secret innovations that others cannot replicate.

Interviewing for Strategist Trading or PM Roles

Relevance to Strategic Roles: When interviewing for strategist, trading, or portfolio management (PM) roles, it is nearly inevitable that financial strategies will be discussed. However, the appropriateness of these questions depends on the sensitivity and confidentiality of the information shared. It is inappropriate for an interviewer to probe into the exact mechanics and parameters of models used by a systematic fund, as this could compromise the candidate's proprietary information. An appropriate response might be, "Good try there."

Code of Ethics in the Financial Industry

Unwritten Codes of Conduct: Most practitioners follow an unwritten code that respects the confidentiality of proprietary information. However, there is an expectation for candidates to answer high-level questions regarding their strategy to ensure they are suitable for the role. These questions should be answerable without giving away the "secret sauce."

By maintaining a balance between evaluating candidates and respecting proprietary information, interviewers can conduct effective and ethical trading job interviews. For candidates, understanding the context and respecting ethical boundaries can also help in presenting themselves in the best light.

In summary, while discussing financial strategies is crucial for evaluating candidates in trading roles, the approach should focus on understanding the broader concepts and limitations. Ethical considerations and respect for proprietary information are key factors to keep in mind during the interview process.