10+ Derivatives Trader Interview Questions and Answers

4th runner's position after crossing 3rd runner in a race with 5 people.

• 4th runner will be in 3rd position after crossing 3rd runner.

• The runners ahead of 4th runner are 1st and 2nd.

• The runners behind 4th runner are 5th and the runner he crossed.

To identify the 2kg weight among 8 blocks, use a systematic weighing approach.

• 1. Divide the blocks into two groups: 4 blocks in each group.

• 2. Weigh the first group of 4 blocks against the second group of 4 blocks.

• 3. If they balance, the 2kg weight is in the remaining blocks.

• 4. If one group is heavier, it contains the 2kg weight.

• 5. Take the heavier group and weigh 2 blocks against 2 blocks.

• 6. Repeat the process until you isolate the 2kg block.

This expression simplifies to a single numerical value through arithmetic operations.

• Convert all fractions to a common denominator before performing addition or subtraction.

• Example: For 4/3 and 16/5, the common denominator is 15.

• Perform multiplication and division before addition and subtraction according to the order of operations.

• Example: 21*8 = 168, 18*3 = 54.

• Combine like terms and simplify step by step to avoid errors.

I primarily use technical analysis and quantitative models to make trading decisions.

• I rely on chart patterns, indicators, and statistical analysis to identify potential trading opportunities.

• I also incorporate risk management strategies to protect my capital and minimize losses.

• I may use algorithmic trading systems to execute trades automatically based on predefined criteria.

• I continuously monitor market conditions and news events that may impact the derivatives market.

• I ada...read more

Yes, I am proficient in trading software such as Bloomberg Terminal, Eikon, and Thinkorswim.

• Proficient in using trading software like Bloomberg Terminal, Eikon, and Thinkorswim

• Able to execute trades, analyze market data, and manage risk using trading software

• Familiar with order types, charting tools, and research capabilities of trading software

Options strategies like strangle and ratio involve buying or selling multiple options to profit from market movements.

• Strangle involves buying both a call and put option with different strike prices but the same expiration date.

• Ratio involves buying or selling a different number of options to create a specific risk/reward profile.

• Both strategies can be used to profit from volatility in the underlying asset.

• Strangle can be used when expecting a significant price movement but u...read more

Divide a circle into 8 equal parts using 3 non-intersecting lines by creating a star-like pattern.

• Draw a circle and mark the center.

• Use three lines to create a star shape, connecting points on the circle's circumference.

• Each line should connect to different points, ensuring no intersections occur.

The underlying in grapes and wine refers to the fundamental assets and factors influencing their value and market dynamics.

• Grapes are the raw material for wine production, serving as the primary underlying asset.

• Factors like grape variety (e.g., Cabernet Sauvignon, Chardonnay) affect wine quality and market price.

• Terroir, including soil, climate, and geography, influences grape characteristics and wine flavor profiles.

• Market demand for specific wine types can drive prices, ma...read more

Call and put options are financial contracts that give the holder the right, but not the obligation, to buy (call) or sell (put) an underlying asset at a specified price within a specified time period.

• Call option: gives the holder the right to buy the underlying asset at a specified price within a specified time period.

• Put option: gives the holder the right to sell the underlying asset at a specified price within a specified time period.

• Options are commonly used in financial ...read more

The market is dynamic, influenced by economic indicators, trader sentiment, and global events, creating opportunities and risks.

• Volatility: Markets can experience rapid price changes, e.g., during earnings reports.

• Liquidity: High trading volume allows for easier entry and exit, like in major stock indices.

• Market Sentiment: News can sway trader behavior, e.g., geopolitical tensions affecting oil prices.

• Economic Indicators: Reports like GDP and unemployment rates impact market ...read more

Placing a ratio order involves specifying the quantity of one security to be bought or sold in relation to another security.

• Specify the ratio of one security to another in the order

• For example, a ratio order could be to buy 2 shares of stock A for every 1 share of stock B sold

• Ratio orders are commonly used in pairs trading strategies

To place a buy order, you need to specify the security, quantity, price, and any other relevant details.

• Specify the security you want to buy (e.g. stock, bond, option)

• Specify the quantity of the security you want to purchase

• Specify the price at which you are willing to buy the security

• Consider any additional details such as order type (market, limit, stop)

• Submit the buy order through your trading platform or broker