70+ Equity Dealer Interview Questions and Answers

To generate 15000k brokerage from clients with .50 brokerage, we need to have a total trading volume of 3 billion.

• Brokerage = Total Trading Volume * Brokerage Rate

• 15000k = Total Trading Volume * 0.50

• Total Trading Volume = 15000k / 0.50

• Total Trading Volume = 3 billion

In the money, At the money and out of the money call and put option explained with examples.

• In the money call option: Strike price is lower than the current market price. Example: Stock ABC is trading at $50, call option with a strike price of $40 is in the money.

• Out of the money call option: Strike price is higher than the current market price. Example: Stock ABC is trading at $50, call option with a strike price of $60 is out of the money.

• At the money call option: Strike pr...read more

I suggest investing in XYZ stock due to its strong financials and growth potential.

• XYZ has consistently shown strong financial performance in the past few quarters

• The company has a solid growth strategy in place and is expanding into new markets

• Industry experts predict a positive outlook for the sector in which XYZ operates

• XYZ has a competitive advantage over its peers due to its unique product offerings

• The stock is currently undervalued and has the potential for significant ...read more

Markets refer to the buying and selling of goods and services, stocks, bonds, and other financial instruments.

• Markets can be classified into different types such as stock markets, commodity markets, currency markets, etc.

• The prices of goods and services in a market are determined by the forces of supply and demand.

• Investors use various tools and techniques to analyze market trends and make informed investment decisions.

• Market volatility and economic indicators such as GDP, in...read more

It is not possible to accurately predict the performance of specific stocks in the next 5 days due to market volatility and various external factors.

• Stock market performance is influenced by a wide range of factors including economic indicators, company news, geopolitical events, and investor sentiment.

• Short-term stock predictions are highly speculative and can be influenced by unpredictable events.

• It is recommended to focus on long-term investment strategies and diversificat...read more

Sectors traded in the stock market include technology, healthcare, finance, energy, consumer goods, and more.

• Technology

• Healthcare

• Finance

• Energy

• Consumer Goods

• Utilities

• Real Estate

• Materials

• Industrials

Yes, SBI Securities is a subsidiary of State Bank of India offering a range of financial services including equity trading.

• SBI Securities is a subsidiary of State Bank of India

• It offers services like equity trading, mutual funds, IPOs, etc.

• The company has a strong presence in the Indian financial market

Yes, I have a good understanding of trading stocks.

• I have studied the stock market and its trends

• I keep myself updated with the latest news and events that can affect the stock market

• I have experience in analyzing financial statements and making informed decisions

• I have also practiced trading stocks in a simulated environment

• For example, I have successfully traded stocks of companies like Apple, Amazon, and Microsoft

Yes, I can open 3 accounts monthly.

• Yes, I have the capacity to open 3 accounts monthly.

• I have experience in opening multiple accounts in a month.

• I can manage the workload efficiently to open 3 accounts monthly.

• For example, in my previous job, I used to open 5 accounts monthly on average.

Technical charts used for predicting market movement include candlestick charts, moving averages, and relative strength index (RSI).

• Candlestick charts show the open, high, low, and close prices for a given time period

• Moving averages smooth out price fluctuations and show the trend direction

• RSI measures the strength of a security's price action

• Other technical charts include Bollinger Bands, MACD, and Fibonacci retracements

Equity and commodity segments have different timings for trading.

• Equity segment trading timing is from 9:15 am to 3:30 pm on weekdays.

• Commodity segment trading timing varies for different commodities.

• For example, gold and silver trading timing is from 9:00 am to 11:30 pm on weekdays.

• Crude oil trading timing is from 10:00 am to 11:30 pm on weekdays.

• Timing may also vary based on exchange and market regulations.

Engage the client by understanding their concerns and demonstrating the value of investment tailored to their needs.

• Listen actively to understand their reasons for disinterest, e.g., fear of loss or lack of knowledge.

• Educate them on the benefits of investing, such as potential for wealth growth and financial security.

• Share success stories of clients who were initially hesitant but benefited from investing.

• Offer a low-risk investment option to ease their concerns, such as a sa...read more

Financial services refer to services provided by financial institutions to help manage money and investments. A financial swap is a financial contract between two parties to exchange cash flows based on a predetermined set of rules. An index is a statistical measure of the performance of a group of stocks or other securities.

• Financial services include banking, investment management, insurance, and other related services

• A financial swap is a type of derivative contract that al...read more

Revenue is generated through brokerage fees and commissions on trades executed for clients.

• Brokerage fees charged on every trade executed for clients

• Commissions earned on the volume of trades executed

• Additional revenue generated through value-added services like research and advisory

• Revenue can also be generated through cross-selling of other financial products

• Building a strong client base through networking and referrals

I will recommend a good stock to my client by conducting thorough research, analyzing market trends, and considering the client's investment goals and risk tolerance.

• Conduct thorough research on the company's financial health, performance, and future prospects

• Analyze market trends and economic indicators to identify potential opportunities

• Consider the client's investment goals, risk tolerance, and time horizon before making a recommendation

• Provide regular updates and recommen...read more

I am open to discussing the compensation package further based on my qualifications and experience.

• I am open to negotiating the compensation package based on my skills and experience.

• I would like to understand the complete benefits package before making a decision.

• I am willing to consider the fixed package but would like to discuss potential for performance-based incentives.

A derivatives contract is a financial agreement between two parties based on an underlying asset.

• Derivatives contracts derive their value from an underlying asset such as stocks, bonds, commodities, or currencies.

• They are used for speculation, hedging, or arbitrage purposes.

• Common types of derivatives contracts include futures, options, swaps, and forwards.

• These contracts allow investors to take positions on the price movements of the underlying asset without owning it.

• For ex...read more

Cross selling is an important aspect of equity dealing where a dealer offers additional products or services to existing clients.

• Cross selling helps in increasing revenue and building customer loyalty.

• It involves identifying the needs of the client and offering relevant products or services.

• For example, a dealer can offer mutual funds or insurance policies to clients who have invested in stocks.

• Effective cross selling requires good communication and relationship building skil...read more

I can place client's orders punching quickly and accurately to ensure timely execution.

• I am proficient in using trading platforms to quickly enter orders.

• I have a strong attention to detail to avoid errors in order entry.

• I prioritize speed and accuracy to meet client's needs efficiently.

Call option and put option are types of financial contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified time period.

• Call option gives the buyer the right to buy an underlying asset at a predetermined price within a specified time period.

• Put option gives the buyer the right to sell an underlying asset at a predetermined price within a specified time period.

• Both call and put options have a...read more

Yes, I am familiar with the stock market.

• I have been following the stock market for a few years now.

• I have experience in buying and selling stocks.

• I keep myself updated with the latest news and trends in the stock market.

• I have a good understanding of technical and fundamental analysis.

• I have also taken courses and read books on the stock market.

• For example, I have invested in stocks like Apple, Amazon, and Tesla.

I feel cautiously optimistic about the current market.

• I believe the market is showing signs of stability and growth.

• There are several positive indicators such as increasing stock prices and low volatility.

• However, I am also aware of potential risks and uncertainties that could impact the market.

• I closely monitor economic and political developments to make informed investment decisions.

• For example, the recent trade tensions between countries have the potential to affect market...read more

Shares market is a platform where stocks of publicly traded companies are bought and sold.

• Shares represent ownership in a company

• Shares can be bought and sold on stock exchanges

• Prices of shares fluctuate based on supply and demand

• Investors can make profits by buying low and selling high

• Examples of stock exchanges include NYSE, NASDAQ, and BSE

Yes, I have completed the NISM series certification.

• I have completed the NISM series certification which includes various modules related to equity trading and investment.

• This certification is recognized by SEBI and is mandatory for individuals working in the securities market.

• It demonstrates my knowledge and understanding of the equity market and my ability to provide quality services to clients.

• I have also kept myself updated with the latest market trends and regulations th...read more

Futures derivatives are financial contracts that obligate the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and price.

• Futures contracts are standardized and traded on exchanges.

• They are used for hedging or speculation.

• Examples include stock futures, commodity futures, and currency futures.

• Futures contracts have margin requirements and daily settlement.

• They have expiration dates and can be rolled over or settled.

• Futures prices are inf...read more

I used to generate an average of $X in brokerage per day

• On average, I used to generate $X in brokerage per day

• The amount of brokerage generated per day varied based on market conditions and client activity

• For example, on a busy trading day, I could generate $Y in brokerage, while on a slow day it could be lower at $Z

Repo rate is the rate at which the central bank lends money to commercial banks, while reverse repo rate is the rate at which the central bank borrows money from commercial banks.

• Repo rate is currently at 4.00% in India as of September 2021.

• Reverse repo rate is currently at 3.35% in India as of September 2021.

• Repo rate is used by the central bank to control inflation and stimulate economic growth.

• Reverse repo rate is used to absorb excess liquidity in the banking system.