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// ← EVERY SEATTHE FRONT LINE

Ground floor · The hall

Trader

Prices, warehouses and hedges the risk the bank takes on when it deals with clients and with other banks.

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// 01 — WHAT A TRADER DOES

The seat is a book of positions and the discipline that keeps it inside its limits. Most of the risk is not a view on the market but the residual left behind by client business, and the craft is knowing which of it to keep, which to lay off, and at what price.

// 02 — WHO ARRIVES HERE

Almost entirely graduate markets streams and internal moves from sales, structuring or risk; quantitative degrees are common but not a rule.

// 03 — WHAT THE INTERVIEW ASKS

These are the shapes the round takes, not a question bank — banks phrase them differently and the wording is never the point.

  1. 01An estimation question with no clean answer, worked out loud.
  2. 02The position moves against you. Now what?
  3. 03How would you price this if you could not see a screen?
  4. 04What is the difference between a view and a position you are stuck with?
  5. 05Tell me about a decision you got wrong quickly.
  6. 06What are your limits for, and what do you do when you are near one?

What the panel is listening for. Whether you can reason under time pressure without either freezing or bluffing — and whether you treat a limit as a discipline rather than an obstacle.

The front-line quiz has no question for this seat yet. Its five were asked for the personal banker, private banker, markets salesperson, transaction banker and product manager seats, in the same block, and the temperament they score is the one this panel scores too.

Take the quiz →

// 04 — WHY CREDIT PAYS IN THIS SEAT

Trading is credit's mirror image and the same discipline: a position you cannot exit is an exposure you did not choose, and the survivors in both seats are the ones who sized it before they liked it.

The overlap with lending is narrower here than anywhere else on the front line, and it is still there: counterparty limits are credit decisions, and a desk that understands how the bank reads a client's balance sheet understands why its limits sit where they do.

START HERE · How banks manage credit risk

// 05 — A DAY IN THE SEAT

  1. 06:45Before the open: the overnight risk, the positions left from yesterday's client flow, the limits against them.
  2. 07:30The morning meeting — the desk's view, the day's events, what sales will be asked for.
  3. 09:00Client flow priced through sales: a spread that wins the trade and leaves a risk the book can carry.
  4. 11:00Hedging the residual — what to keep, what to lay off, and at what price.
  5. 13:00The risk report against limits, and the conversation with market risk when something is near one.
  6. 16:30The day's P&L explained to product control, line by line, before it is believed.

The shape of a day, not a rota — banks and books differ. A relationship manager's day is on what a commercial banker does.

// 06 — WHAT THE FIRST YEAR TESTS

  • Whether you size a position before you like it.
  • Whether you treat a limit as a discipline rather than an obstacle — and say so before you are near one.
  • Whether you can explain your P&L, including the part you would rather not.
  • Whether sales can get a price from you fast enough to be useful, and trust the price.
  • Whether you are wrong quickly, out quickly, and honest about it the same afternoon.

// 07 — WHAT YOU SEE FROM HERE

The bank's own balance sheet moving in real time — the client business that lands as risk on a book, and what it costs to hold — and the machinery of limits, stress and capital that decides how much the bank will carry. It is the seat where market risk and credit risk meet in a single number: a counterparty that cannot pay when a trade goes against it.

// 08 — THE FILES TO PRACTISE ON

// 09 — WHERE THE SEAT LEADS

Senior trader, then desk head, for those whose book holds up over years; the seat is unforgiving about that. Others move into market risk, structuring, treasury or product control, and the ones who understand why the bank's limits sit where they do are the ones those seats want.

// 10 — READ BEFORE THE ROUND

THE IN-TRAY · ONE MINUTE

Make the call on one file.

A short file on the ground this page covers. Every option opens with how far it sits from a senior banker’s read.

THE FIRST QUESTION · THE BANK · RATE SENSITIVITY

A bank holds government bonds at amortised cost, on the basis that it will hold them to maturity. Rates have risen, and it now needs cash.

What happens if it sells the bonds?

1 FILES · PICK A CALL ON ANY OF THEM

4 MORE ON THE BANK · RATE SENSITIVITY →WHERE DO YOU READ FROM? THE PLACEMENT →

// THE FREE CASE

FREE · NO PURCHASERead one complete case first Case 01 of the interview case pack — Northmark Engineering, the file, the diagnostic and the ninety-second walkthrough — in full, for an email address.10-PAGE PDF · FREE

// ALSO IN THE FRONT LINE

The whole board, and how the four blocks fit together, is on what jobs banks hire for.