J.P. Morgan runs a HireVue video interview for its 2027 Commercial and Investment Bank Markets Summer Analyst Program in Hong Kong, the Research role, 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 numbers question dressed up as a story. It hands you two strategies and a tempting shortcut. The desk wants to see whether you reach for the arithmetic or fall for the headline win rate.
Here is the question, word for word:
Scenario: You're joining an equities execution team evaluating two strategies
· Strategy 1: wins about 80% of trades, averages +$0.05 per share on winners, -$0.35 per share on losers. Typically ~20 trades/day in normal conditions.
· Strategy 2: wins about 38% of trades, averages +$0.22 per share on winners, -$0.10 per share on losers. Typically ~8 trades/day. Same cost profile as above.
Question: Which strategy is more likely to have a positive average outcome per trade before costs and why?
The trap is the 80% win rate. It is built to make Strategy 1 feel safe, and a lot of candidates pick it for that reason alone. But winning often is not the same as winning money. The expected value per trade is the win rate times the average win plus the loss rate times the average loss, and once you run that line, Strategy 1 is the loser.
How you lose points
- You pick Strategy 1 because it wins 80% of the time. That is the exact reflex the question is testing. Win rate alone tells you nothing about expected value.
- You never do the multiplication. The whole answer is one calculation per strategy. If you talk around it instead of computing it, you have dodged the question.
- You ignore the size of the losers. Strategy 1 loses $0.35 on a bad trade and only makes $0.05 on a good one. A seven to one payoff ratio against you is the heart of the trap.
- You confuse per trade with per day. The question asks for the average outcome per trade. The trades per day figure is a distractor for this part, not the answer.
- You forget the phrase before costs. The prompt says before costs on purpose. Note that costs would only make a thin edge thinner, which matters for the marginal case.
- You give a vibe instead of a number. Saying Strategy 2 feels riskier or Strategy 1 feels steadier is not an answer. The desk wants the expected value stated out loud.
How you pass
A strong answer runs the expected value for each strategy out loud. Strategy 1 is 0.80 times a five cent win plus 0.20 times a thirty five cent loss. That is four cents minus seven cents, which is negative three cents per share. Strategy 2 is 0.38 times a twenty two cent win plus 0.62 times a ten cent loss. That is about 8.4 cents minus 6.2 cents, which is roughly plus two cents per share. So Strategy 2 has the positive average outcome per trade and Strategy 1 does not, even though Strategy 1 wins four times as often.
Then explain why, because the number alone is not the insight. Strategy 1 is a high win rate, small edge, fat tail loss profile: it collects little wins and occasionally gives back a loss seven times the size, so the rare losers swamp the frequent winners. Strategy 2 wins less than half the time but the winners are bigger than the losers, and that payoff ratio is what carries it into positive territory. The lesson a trader wants to hear is that expected value equals probability times payoff on both sides, and a strategy that wins often can still bleed if the losses are large enough. Close on the discipline: you always size the payoff against the frequency rather than trusting the win rate, and you would note that costs eat into any thin edge, so Strategy 2's cushion matters more than it first looks.
Get the ones for your role
This is the only question in the interview, and it rewards people who reach for the arithmetic instead of the comforting story. 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.
