Pitching a solid trade idea is the most nerve-racking and challenging area of the sales and trading interview process. It requires both technical and storytelling skills. But with great challenges comes great praise. A well-constructed and reasonable trade idea can leave a long lasting impression on your interviewer’s and help you land your desire jobs at Wall Street’s major banking institutions. That’s why the Wall Strategies Experts has put together this Ultimate Trade Idea Guide to help you aced it! On this guide, we will cover how to come up with an original trade idea and ready your pitch in details. Exactly what is a trade idea?
A trade idea is an investment thesis to either buy or sell a particular security such as stocks, bonds, or derivatives. The thesis of the trade idea is backed by various quarrels that can be qualitative and quantitative. Qualitative arguments include management experience, product rollout, customer perception, and industry theme.
Quantitative analysis can be predicated on fundamental analysis and technical evaluation. In any full case, the essence of a trade idea is to build a winning investment narrative that is constant and logical. Why is trade idea important? Not only are trade ideas time-consuming, they’re extremely difficult to get right as well.
Even professional investors and investment advisors can miscalculate and lose cash on their investments. Good investors are profitable as time passes because their predictions will be right. The trick to their success is their methodical way to analyze the market that is both consistent and logical. No-one can predict the future.
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Your job as an intern or analyst is never to pitch a trade-proven fact that is 100% profitable. You are, however, expected to present a thoughtful investment thesis and support it with proof. They are not looking for the right idea; they are searching for a strong and logical thought process!
Many interviewers view trade idea pitching as a litmus test for a candidate’s specialized skills and personality fit. First, the capability to grasp complex ideas is vital for both salespeople and investors. Trading and Sales specialists work with very abstract concepts. Having the ability to understand the marketplace impact of interest rate, unemployment rate, and even monetary policies demonstrates your ability to learn and master challenging concepts and apply them to the true market. Second, helping an investment thesis with reasonable quarrels and evaluation is the substance of Sales and Trading. Each pricing and hedge on Wall Street are supported by an investment thesis.
For an investor to successfully manage the risks on their book, independent and critical market evaluation is needed. Blindly following a market can result in disaster while original thinking promises a stellar career. For a salesperson, their job is to make the trade happen and support their client. A salesperson has to be able to produce original ideas and communicate it logically and passionately to their clients.
Lastly, they want for passion. Many candidates think that pitching trade ideas is a technical challenge strictly, and they fail to understand it as an important chance to demonstrate that you are a good fit for the S&T industry. Whether you end up as a salesperson or a trader, your job shall focus on selling securities to the bank’s clients.
Though you can discuss your fascination with the cover letter, a passionate and strong trade idea pitch will further encourage you interviewers that you’ll have the durability and success in the industry. MAY I reuse a trade idea I came across online? Simply copying and pasting some random ideas from Seeking Alpha won’t help you win that golden solution.