GUEST COMMENT: What to do as a graduate or intern when you are asked to come up with a trade idea
A fond favourite on trading floors of banks everywhere is to ask interns and new graduate hires to come up with a trade idea.
Equally likely is that the graduate or intern will fail miserably. 9 times out of 10, they try to reinvent the wheel and get bogged down in complexity. It need not be like this. A trade idea is simply a, ‘hot topic,’ an 'in' product, country or sector which can be accessed by a client in order to make money. The key to a good trading idea is presenting it in an organised and structured way. You need to ask yourself:
Why you like the product/region/sector?
How you plan to trade it/get exposure to it?
How you think it will perform?
What are the risks to your idea? How could it go wrong?
That’s it. No more, no less.
The more complicated you make your trade idea, the more you open yourself up for a real grilling by senior staff will want to see how much you really understand. It’s better to have a simple, good, well thought-out idea which you understand in its entirety than a complex idea that will fall apart under questioning.
