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Since once in a (short) while there's a question about what the interviews are like at an actual investment shop (ie, IB, hedge fund, asset manager, not "prop"), I figured I'd share one in the spirit of the holiday. This is an actual interview brain teaser used by one of the top 5 trading shop...

Wtf are you talking about again? Corporate bond spreads are at the tightest to tsy since 2006. You'd be crazy to buy corporate bond now. Perhaps you mean buying treasury? Front end tsy are not exactly yielding very much. You'll need to buy a curve flattener at a point in time when the curve...

You can argue about the politics* until the cows come home, but it doesn't change two fundamental reality: (1) they make a LOT more money than just about any retailer will possibly can (2) despite all the myths about "family connections" or what not, the vast majority of guys sitting around...

This is the kind of attitude that separates the professionals from retail. Keep thinking that your realized pnl tell you how you are doing... meanwhile, the actually professionals are constantly asking whether their realized pnl reflect what they ought to be doing and what they said they were...

Stupid statements like this are the crutch of the losers. Decent connection/friends at a top firm might get you an interview that you wouldn't otherwise have, but unless you actually know what you are doing - you won't get the job. This becomes more true as the pnl responsibility grows. Now...

So you think whenever someone do a demo trade on their demo server (and everyone can do this), they are following through the trade with real money? Why would they do that?

How do you trade "against" a market maker in a sim account? If IB sends your sim trade (even with an "offset", as you say), how would it work? If the MM takes the trade, what will he settlement with? After all, you have no cash in the sim account (real cash, that is) to deliver against. Or, do...

"reason I achieved low drawdown. " Realized risk is not the same as true risk. Anyway, I'm not trying to shit on your strategy. I'm glad it's making you cash. I've just been around this business long enough to cringe whenever I hear someone saying that they got a low risk high return strategy...

Your first question is misguided: it's somewhat non-nonsensical to ask what's the maximum return of a strategy. It should be what's the max return for some amount of risk. In that, I don't personally mechanical systems lie on a higher or lower risk/reward frontier than any other strategy...

No. Flow = broker/dealers. dealers in a lot of OTC markets keep their own inventories and make very very large spreads.

....annnnnnd I'm right. Iceberg risk profile. You 'think' your downside is 1 cent per trade. That might be true in 99% of the cases where you lose, but the 1% is what will kill you. Ie: system failure, regime shifts, extreme liquidity crunch (or the reverse), algorithmic trading screwing up the...

Not a single institutional manager worth his salt will even bother letting you buy him a drink to show him the strategy. The reason is simple: 100% with a 3% draw-down over the last three years is a sign of a strategy with a lot of embedded "iceberg" like risk. The fact that you've only had 3%...

That's decidedly not what I'm saying. Implementation isn't the only way to generate superior returns, but it's a necessity. My point is that there are no super secret strategies that will make its holders millions just because it's such a clever idea. Almost all strategies used are...

Again, you are missing the picture. What exactly are you stealing? The core trading logic? I can assure you (I don't know about much James Simon, but i do know quite a bit about DE Shaw) that the logic itself will be overwhelmingly unimpressive. There will be nothing there that anyone who's been...

This is the mindset of the "retail trader". The retail guys keep thinking there's some magical "hedge fund strategy" that's uber secret and, if discovered, can make the secret tons of money. The reality isn't quite so. There are few strategies that are original in any sense of the word. The...

Hedge funds and their strategies don't work like that...

Cheapest to deliver, not a single bond (so in this sense a CDS is more like a treasury future option, in some sense). In any case, it can eventually be standardized to retail: just trade 'em all points-up-front and you get ride of a lot of settlement issues; but why would retail want to trade...

Wait... analysts violate SEC regulations when their opinions turn out to be incorrect? Really? Unless there are other issues (conflict of interest, fraud, etc), being wrong is not illegal...

Oh, I'll bid $322. I'll bet I can find someone in one of the local college to do it for less than min wage - can make sure he's indian if that works for your particular brand of racism.

.... So.... assuming it takes 20 seconds to type each address, this is about 22.23 hr of work. At $7.25 min wage, this is only about $161.11 of work... and you have a preference for outsourcing to india? why??