J.P. Morgan runs a HireVue video interview for its 2027 Commercial and Investment Bank Markets Summer Analyst Program in Hong Kong, and it screens out a large share of applicants before a trader ever watches. The people who get through have usually rehearsed the real questions. This is a single question interview, Question 1 of 1, with close to three minutes of prep and two minutes to answer. This one is a concept check. The prompt hands you both definitions, which means restating them earns nothing. The desk wants to hear what you understand that the definitions do not say out loud.
Here is the question, word for word:
Scenario: Markout is a quick, post-trade read on price movement right after you transact. It is intended to reflect direction. For a buy, a positive markout means the price moved up after you bought. For a sell, a positive markout means the price moved down after you sold. One can think of it as a short-term metric - did the market move with you (positive) or against you (negative) in the next 1–5–30 minutes? By contrast, Profit and Loss (P&L) aggregates all effects over longer horizons: price moves, hedging, carry/financing, fees, inventory gains/losses, and client spreads.
Question: In your own words, explain how markout is different from P&L. In what scenario(s) would one emphasize P&L vs markout?
The trap is that the prompt gives you enough to sound competent by parroting it back. That fails. Markout and Profit and Loss are not two names for the same thing. One grades your execution over minutes, the other measures the money the book actually made over its life. A strong answer draws that line cleanly and then shows the cases where the two disagree.
How you lose points
- You just repeat the prompt. Reading the two definitions back in different words adds nothing. The interviewer already wrote them.
- You treat them as the same measure. Saying markout is basically short-term Profit and Loss misses the point. Markout deliberately strips out the carry, fees, and hedging that Profit and Loss includes.
- You fumble the sign convention. On a sell, a positive markout means the price fell after you sold. Get that backwards and the rest of the answer is suspect.
- You never give a scenario. The question explicitly asks when you would emphasize one over the other. No concrete case, no credit.
- You miss what markout is really for. It is an execution and market impact metric: did you get run over right after you traded, and did the market select against you. That framing is what a trading desk cares about.
- You forget the market maker case. A desk can show negative markout on a trade and still be profitable, because it earns the spread. If your answer cannot explain that, it is incomplete.
How you pass
A strong answer separates the two by horizon and by purpose. Markout is a short-horizon read on execution: over the next one, five, or thirty minutes, did the market move with you or against you right after you traded. It isolates direction and market impact and it strips out everything else. Profit and Loss is the full economics of the position over its life: the price move plus hedging, carry and financing, fees, inventory gains and losses, and the client spread you captured. Markout asks did I execute well. Profit and Loss asks did I make money. Those are different questions and they can point opposite ways.
Then give the scenarios. You emphasize markout when you are judging execution quality, algorithm or trader performance, and adverse selection: a client trade where you want to know if you got picked off, or a study of whether your fills are leaking information. You emphasize Profit and Loss when you are measuring the real money a book earns and managing risk and compensation off it. The cleanest example is a market maker who buys on the bid, sees the price tick down, and posts a negative markout, yet still books positive Profit and Loss because the captured spread and the offsetting flow outweigh the small adverse move. The reverse happens too: a trade with clean markout can still lose money once financing and fees are counted. Close on the one line that shows you get it: markout grades the execution, Profit and Loss grades the outcome, and a good desk watches both because a healthy business needs the execution to be sound and the money to be real.
Get the ones for your role
This is the only question in the interview, and it rewards people who actually understand how a trading desk measures itself, not people who can paraphrase a definition. The full J.P. Morgan Markets question pack is on OpenInterview if you want to see the real prompts across the Sales and Trading roles before you record.
