Finance Business English has been seeing a lot of common mistakes while editing resumes recently. Most of these problems stem from a cramming mentality. Candidates want to squeeze everything onto their resume out of fear that they’ll be at a disadvantage if other candidates have longer resumes and list more experiences and activities.

Candidates mistakenly believe they are in an arms race to include as much as possible about themselves that might be interpreted as impressive by the employer.

This cramming mentality results in the following mistakes on most finance resumes:

1) Multiple pages are used to fit more information on.

2) The margin width is set to “narrow” in Microsoft Word, resulting in 0.5” margins.

3) The font size is too small (10 or under) or too condensed (Arial Narrow).

Mistake 1: Multiple Page Resumes

No matter how much information you feel you need to include, resist the urge to use more than 1 page.

First impressions are crucial. The reader is going to make a split-second judgement about how well you present yourself and if they like you. They won’t appreciate having to study your resume in detail to filter out the key parts of it that are genuinely relevant for the work you’ll have to do if you’re hired.

Long paragraphs and multiple pages show a lack of respect for the reader’s time. If you can’t be bothered to make your resume concise enough to fit onto 1 page it implies that you don’t think communication skills are particularly important.

Resumes are supposed to present your highlights, not a complete list of everything you’ve ever done throughout your life. The reader is trying to build a mental picture of who you are. If you include too much, it becomes confusing and hard for them to decide how to categorize you. If you just have a small amount of highly relevant experiences that stand out, it makes it easier for them to remember you.

The only time it might be acceptable to go over 1 page is if you are very senior and have extensive experience, or if you’re applying for positions in Australia or New Zealand where 2/3 page resumes are standard.

Mistake 2: Margin Width

About 75% of resumes Finance Business English receives for editing have their margins set to narrow on Microsoft Word (0.5″). This makes them awkward and difficult to read. The extra information you fit on isn’t going to offset the negative first impression you’ve made for poorly presenting your resume and making it difficult for the reader. Resumes should be easy on the eye. The absolute narrowest margins we recommend is 0.7” (try and aim for 0.75”).

Mistake 3: Fonts

Times New Roman is considered “the business standard” font and Arial is also acceptable (do not use Arial Narrow).

Some studies claim that at 12 points and larger Arial is statistically the easiest to read font, and for under 12 points Verdana is the easiest.

When you’re struggling to fit everything you want onto 1 page it’s extremely tempting to use smaller fonts. Resist this urge and work harder to cut out the fluff. Aim to use size 11/12 (it’s possible to resort to 10.5, but only if you’re really struggling).

Keep the font simple, traditional, and professional (nothing fancy or creative). Don’t bother searching for a better font than those mentioned above. If you’re considering whether Cillian Braille or Romalian will give you an edge over the other applicants, you’re wasting your time.

HOW TO FREE UP MORE SPACE ON YOUR 1 PAGE RESUME

1 – Keep the Header Short and Simple

We can reduce the header to 2 lines to save space. Line 1 should be your name. Capitalize it, make the font larger than the rest of the resume, center it, and make it bold.

Put your address, phone number, and email address on the second line.

The longest header ever seen at Finance Business English is 6 lines. The resume included 2 phone numbers, an email address, a link to his LinkedIn profile, and his Skype name. This is definitely overdoing it and screams desperation to be contacted.

Do not put 2 phone numbers on your resume. Why over complicate it? Use 1 phone number and make it easy. It goes without saying that you should always be reachable on this number (no excuses).

2 – Split Your Resume Into 4 Sections

Don’t have 13 different sections on your resume. Avoid breaking it down into details such as profile, objective, additional details, qualifications, leadership experiences, societies, additional training, other activities, etc. Instead, consolidate it into 4 sections as demonstrated below:

1)  Header: 2 lines only

2)  Education: Put qualifications and possibly awards in here (if relevant).

3) Work Experience: Put leadership and activities in this section if you’re a student.

4) Skills and Interests: Merge your awards, clubs, languages, hobbies, interests and skills into this section.

3  – Don’t Bother With References

References should not be included on your resume as these are dealt with at a later stage in the recruitment process.

One candidate who used our resume services originally created a whole new section for references and then put “available on request” under the heading. Avoid wasting time with meaningless sentences that don’t add any clear value.

Conclusion

The way you format your resume can make or break your future career in finance. Candidates are disqualified for using bad resume formats. Focus on making it easy on the reader by using a clean layout. Be selective and aim to present only your key highlights. Don’t be lazy by simply listing every task and activity that you’ve ever done.

Following these tips empowers you to make a good start on writing your resume. If you require additional assistance, contact Finance Business English to arrange a resume edit and get your finance resume completed.

Additional Tip:

Send your resume out as a PDF unless otherwise specified. This ensures that the document can be opened on both PC’s and Mac’s, and that the formatting won’t get altered.

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You shouldn’t spend too much time worrying about how to write your finance cover letter, as it’s far less important than your resume. Sending a detailed cover letter to a bulge bracket bank can be a gamble, and is generally a waste of time anyway because it will probably be ignored.

Big firms receive so many applications that it’s inefficient for them to analyze all the details of every candidate. Cover letters are read more often at smaller financial firms and boutique banks. These companies get less applications so are more likely to take the time to read them.

Cover letters are also risky, because candidates are disqualified for grammar errors and typos. The more you write, the more you risk exposing yourself. Finance professionals are very attentive to detail so they will spot even minor errors.

Should You Risk Writing A Bold Cover Letter?

“I have no qualms about fetching coffee, shining shoes, or picking up laundry, and will work for next to nothing”

The example below is an extremely bold cover letter that stands out from standard templates. The applicant is very humble, which is better than making outrageous claims and being excessively boastful. It’s not too long and rambling, which is important because if a cover letter is too long it shows that the candidate doesn’t know how to present himself effectively and doesn’t value the employers time.

This bold cover letter paid off, as the student received several offers for banking internships. Passionate and unique cover letters can grab the attention of financial companies, especially at smaller firms. However, Finance Business English recommends playing it safe by NOT sending out overly bold cover letters unless you have genuinely exceptional circumstances.The risk of an unorthodox cover letter going horribly wrong is too high. Keep it short and succinct, with a brief and relevant introduction about yourself and your background. If you’re writing more than 3 or 4 paragraphs you’re going to lose the readers interest.

The main thing to remember is that it’s easier to damage your chances with a cover letter than to improve them. There’s just too big a chance that a bold cover letter will backfire and be perceived as inappropriate. Keep your cover letter simple and to the point because most banks and finance firms are traditionally conservative. Your chance to stand out and shine is with your resume, so this is where you should be focusing your time and energy.

Here’s the bold, risky cover letter that actually worked:

From: BLOCKED
Sent: Monday, January 14, 2013 1:14PM
To: BLOCKED
Subject: Summer Internship

Dear BLOCKED
My name is (BLOCKED) and I am an undergraduate finance student at (BLOCKED). I met you the summer before last at Smith & Wollensky’s in New York when I was touring the east coast with my uncle, (BLOCKED). I just wanted to thank you for taking the time to talk with me that night.

I am writing to inquire about a possible summer internship in your office. I am aware it is highly unusual for undergraduates from average universities like (BLOCKED) to intern at (BLOCKED), but nevertheless I was hoping you might make an exception. I am extremely interested in investment banking and would love nothing more than to learn under your tutelage. I have no qualms about fetching coffee, shining shoes or picking up laundry, and will work for next to nothing. In all honesty, I just want to be around professionals in the industry and gain as much knowledge as I can.

I won’t waste your time inflating my credentials, throwing around exaggerated job titles, or feeding you a line of crapp about how my past experiences and skill set align perfectly for an investment banking internship. The truth is I have no unbelievably special skills or genius eccentricities, but I do have a near perfect GPA and will work hard for you. I’ve interned for Merrill Lynch in the Wealth Management Division and taken an investment banking class at (BLOCKED), for whatever that is worth.

I am currently awaiting admission results for (BLOCKED) Masters of Science in Accountancy program, which I would begin this fall if admitted. I am also planning on attending law school after my master’s program, which we spoke about in New York. I apologize for the blunt nature of my letter, but I hope you seriously consider taking me under your wing this summer. I have attached my resume for your review. Feel free to call me at (BLOCKED) or email at (BLOCKED). Thank you for your time.

Sincerely,

BLOCKED.

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Everybody knows what Wall Street is, but “Bay Street” might be new vocabulary for a lot of non-native English speaking students.

A Finance Business English student was confused by the following headline while studying the global energy market:

“BAY STREET: Weak Commodities Set to Punish Company Profits”

In this article we’ll take a closer look at Bay Street – The Wall Street of  Canada.

• Wall Street is located in downtown New York, the financial capital of the world.

• Bay Street is located in downtown Toronto, the financial capital of Canada.

• Wall Street is synonymous with banking and equities.

• Bay Street is synonymous with metals and mining.

•  Wall Street stock market returns 2001 – 2011 = +9%

• Bay Street stock market returns 2001 – 2011 = +148%

WHAT HAPPENS ON BAY STREET?

• As of 2012, Energy and materials shares make up about half of the value of the Toronto Stock Exchange’s benchmark S&P/TSX composite index.

• BMO Capital Markets has the World’s Largest Mining Equity Research Group. They cover more mining stocks than any other financial institution in the world. The team follows the majority of the world’s production of most commodities, such as iron ore, gold, copper and silver.
  

• Toronto hosts the biggest gold and silver miner’s conference in the world, The Prospectors and Developers Association of Canada (PDAC).

• Barrick Gold Corp, the world’s largest gold producer, is based in Toronto.

BANKS ON BAY STREET: THE “BIG 5″

5 Toronto based banks dominate the Canadian financial industry:

• Bank of Montreal

• Bank of Nova Scotia

• Canadian Imperial Bank of Commerce

• Royal Bank of Canada

• Toronto-Dominion Bank

Royal Bank of Canada is the biggest and most prestigious. The exterior of the banks headquarters is coated in millions of dollars worth of gold!

Bay Street is the lifeblood of Canada’s finance industry.

Mike Miller, a Bay street based financier, summed it up by saying, “The TMX Group, owner and operator of the Toronto Stock Exchange and TSX Venture Exchange, is the leading international exchange group for mining financing. It is home to 55 per cent of the world’s public mining companies, with more than 1,400 companies listed, making it a top global player in resource listings. In 2009, a record $22.2 billion in mining capital was raised on the Toronto Stock Exchange and TSX Venture Exchange.

“Combined with a well-capitalized financial sector, Canada clearly maintains its advantage as a global mining hub. Because of Canada’s strong fiscal position, the very friendly mining environment is likely to continue in Canada.”

Finance Business English believes that Finance English students should learn more about Bay Street, as Canada’s economy is likely be the strongest in North America and one of the best in the world for many years to come.

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The Crisis of Credit by Jonathan Jarvis is a great video to familiarize yourself with some key financial concepts.

• The video is very simple and clearly explains the infamous credit crisis which began in 2007.

• This version is especially useful for Chinese students, but has English subtitles for other non-native English speakers.

• Don’t worry if you don’t understand it the first time. Take your time and sit down with a pen, some paper, and a cup of coffee to get a better understanding of the key vocabulary.

Study Tips from Finance Business English:

• Think very carefully about what the root cause of the problem is.

• Could this fiasco have happened without Alan Greenspan increasing the money supply and reducing rates to 1 percent?

• Do you agree with this metaphor? “Wall Street and Main Street both got drunk, but it was the Fed that supplied the alcohol.”

CLICK HERE TO STUDY THE VIDEO

The Crisis of Credit

What is the credit crisis?

It’s a worldwide financial fiasco involving terms you’ve probably heard like sub-prime mortgages, collateralized debt obligations, frozen credit markets and credit default swaps.

Who is affected?

Everyone.

How did it happen?

Here’s how. The credit crisis brings two groups of people together: home owners and investors. Home owners represent their mortgages, and investors represent their money. These mortgages represent houses and this money represents large institutions like pension funds, insurance companies, sovereign funds, mutual funds, etc.

These groups are brought together through the financial system, a bunch of banks and brokers commonly known as Wall Street. Although it may not seem like it, these banks on Wall Street are closely connected to these houses on Main Street.

To understand how, let’s start at the beginning.

Years ago, the investors are sitting on their pile of money looking for a good investment to turn into more money. Traditionally, they go to the US Federal Reserve where they buy Treasury Bills, believed to be the safest investment but in the wake of the dot.com bust and September 11th, Federal Reserve Chairman Alan Greenspan lowers interest rate to only 1% to keep the economy strong. 1% is a very low return on investment so the investors say “no, thanks.”

On the flipside, this means banks on Wall Street can borrow from the Fed for only 1%

Add to that general surpluses from Japan, China and the Middle East and there’s an abundance of cheap credit. This makes borrowing money easy for banks and causes them to go crazy with…leverage.

Leverage is borrowing money to amplify the outcome of a deal. Here’s how it works: in a normal deal someone with $10,000 dollars buys a box for $10,000 dollars.

He then sells it to someone else for $11,000 dollars for a $1,000-dollar profit, a good deal.

But using leverage, someone with $10,000 dollars would go borrow $990,000 more dollars, giving him $1,000,000 in hand.

Then he goes and buys 100 boxes with his $1,000,000 dollars and sells them to someone else for $1,100,000 dollars.

Then he pays back his $990,000 plus $10,000 in interest, and after his initial $10,000, he’s left with a $90,000-dollar profit versus the other guy’s $1,000.

Leverage turns good deals into great deals. This is a major way banks make their money.

So Wall Street takes out a ton of credit, makes great deals and grows tremendously rich and then pays it back. The investors see this and want a piece of the action and this gives Wall Street an idea: They can connect the investors to the home owners through mortgages.

Here’s how it works: a family wants a house so they save for a down payment and contact the mortgage broker. The mortgage broker connects the family to a lender who gives them a mortgage; the broker makes a nice commission. The family buys a house, becomes home owners. This is great for them because housing prices have been rising practically forever, everything works out nicely.

One day, the lender gets a call from an investment banker who wants to buy the mortgage; the lender sells it to him for a very nice fee, the investment banker then borrows millions of dollars and buys thousands more mortgages and puts them into a nice little box.

This means that every month he gets the payment from the home owners of all the mortgages in the box, then he sets his banker wizards on it to work their financial magic which is basically cutting it into three slices: “Safe, Ok and Risky”.

They pack the slices back up in the box and call it a collateralized debt obligation or CDO. A CDO works like three cascading trays: as money comes in the top tray fills first then spills over into the middle and whatever is left into the bottom, the money comes from home owners paying off their mortgages. If some owners don’t pay and default on their mortgage, less money comes in and the bottom tray may not get filled. This makes the bottom tray riskier and the top tray safer.

To compensate for the higher risk, the bottom tray receives a higher rate of return while the top receives a lower but still nice return.

To make the top even safer, banks will insure it for a small fee called the credit default swap. The banks do all this work so the credit rating agencies will stamp the top slice as a safe triple-A rated investment, the highest safest investment there is.

The OK slice is triple B, still pretty good and they don’t bother to rate the riskiest slice.

Because of the triple-A rating, the investment banker can sell the safe slice to the investors who only want safe investments; he sells the ok slice to other bankers and the risky slices to hedge funds and other risk takers.

The investment banker makes millions, he then repays this loans. Finally the investors have found a good investment for their money, much better than the 1% Treasury Bills.

They’re so pleased that they want more CDO slices so the investment banker calls up the lender wanting more mortgages, the lender calls up the broker for more home owners but the broker can’t find anyone. Everyone that qualifies for a mortgage already has one.

But they have an idea: when home owners default on their mortgage, the lender gets the house and houses are always increasing in value. Since they’re covered in the home owners default, lenders can start adding risk to new mortgages not requiring down payments, no proof of income, no documents at all and that’s exactly what they did.

So instead of lending to responsible home owners called prime mortgages, they started to get, well, less responsible. These are sub-prime mortgages.

This is the turning point.

So just like always, the mortgage broker connects the family with the lender and the mortgage, making his commission. The family buys a big house. The lender sells the mortgage to the investment banker who turns it into a CDO and sells slices to the investors and others.

This actually works out nicely for everyone and makes them all rich.

No one was worried because as soon as they sold the mortgage to the next guy, it was his problem. If the home owners went to default, they didn’t care; they were selling off their risk to the next guy and making millions, like playing hot potato with a time bomb.

Not surprisingly, the home owners default on their mortgage which at this moment is owned by the banker. This means he forecloses and one of his monthly payment turns into a house. No big deal, he puts it up for sale but more and more his monthly payments turn into houses. Now there are so many houses for sale in the market creating more supply than there is demand and housing prices aren’t rising anymore, in fact, they plummet.

This creates an interesting problem for home owners still paying their mortgages: as all the houses in their neighborhood go up for sale, the value of their house goes down and they start to wonder why they’re paying back the $300,000-dollar mortgage when the house is now worth only $90,000 dollars.

They decide that it doesn’t make sense to continue paying even though they can afford to, and they walk away from their house.

Default rates sweep the country and prices plummet.

Now the investment banker is basically holding a box full of worthless houses.

He calls up his buddy the investor to sell his CDO but the investor isn’t stupid and says “no, thanks”. He knows that the stream of money isn’t even a dribble anymore.

The banker tries to sell to everyone but nobody wants to buy his bomb. He’s freaking out because he borrowed millions, sometimes billions of dollars to buy this bomb and he can’t pay it back. Whatever he tries, he can’t get rid of it.

But he’s not the only one: the investors have already bought thousands of these bombs. The lender calls up trying to sell his mortgage but the banker won’t buy it and the broker is out of work. The whole financial system is frozen and things get dark…

Everybody starts going bankrupt.

But that’s not all: the investor calls up the home owner and tells him that his investments are worthless. And you can begin to see how the crisis flows in a cycle.

WELCOME TO THE CRISIS OF CREDIT.

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When students write the first draft of their resumes and send them to Finance Business English to edit, I notice that they almost always list extremely basic computer skills at the bottom of their resume.

Below are some examples of what our resume editing service has been seeing on students’ resumes recently:

• “Excellent ability to use a computer”

• “Internet browsing”

•  “Very good skills of Microsoft Office (Word, Excel, Access, PowerPoint, etc.), the Internet (browsers), e-mail (Outlook, Thunderbird, etc)”

• “Microsoft office (Word, Excel, Powerpoint)”

• “Installing additional hardware and software components”

• “Photoshop”

• “Professional user: MS Office”

• “Upgrading computers “

And the worst “skill” I’ve ever seen listed on a finance resume?

• “e-mail and the internet surfing.”

In the 1990s some of these might have been impressive skills, but now they’re expected from everyone.

Stop putting skills on your resume that are not actually skills. Every university graduate on earth is proficient in these programs. They are NOT skills. They are not special. They are not unique in anyway.

On a 1 page resume you have extremely limited space to differentiate yourself and make an impression. You need to make every line count.

Listing these “skills” will not differentiate you at all from the other candidates.

If it’s not going to differentiate you or impress the interviewer, what’s the point of putting it on your resume?

So Should You Put ANY Computer Skills on Your Finance Resume?

If you want to add some computer skills, make sure they are either extremely relevant or extremely advanced. You’re applying for a finance position, not an IT position.

Claiming that you’re an “advanced” user of Microsoft Office isn’t going to help (chances are that you’re not as advanced as you think you are anyway).

If you have some genuinely useful skills (high level Excel certifications or VBA knowledge) you can put them on your resume. However, if you’re relying on these skills to give you a big edge in the application process, you’ll be disappointed.

It also depends on the quantity of your other experiences and skills. If you haven’t garnered many impressive skills or experiences yet, you might have to resort to some technical skills or software certifications to fill up the space. If you decide to do this, focus on your Excel ability (because most finance professionals practically live on Excel).

How Important is the “Skills” Section of Your Resume?

The older you are, the less important this section of the resume is. You will be judged more on your work experience and the type of projects and deals you’ve been involved with throughout your professional career. However, if you’re a university graduate or applying for an internship, you’re too young to have much professional experience.

Interviewers realize this, so the skills section gives them an insight into what your passions are and what potential you have to develop.

Save the skills section for more interesting things like languages, or more relevant things related to finance (investment achievements, financial modeling, math prizes).

Focus on skills that make you sound like an interesting, likeable person that’s passionate about the financial industry.

And whatever you do, don’t put “e-mail and the internet surfing.”

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I think I get even more nervous at interviews just because I have this complex about the way I speak English, just because it’s my second language. Even though people can’t pick up an accent when I speak English, I do feel more comfortable speaking French.

I was a little bit worried that it made me look bad asking about the meaning of a word that everyone more or less should know. People do tend to forget I’m French and it’s not my first language, and I wasn’t raised in an American school so it just makes it a little bit harder for me.

- Laetitia: French native speaker interviewing at SMB Capital, New York.

Laetitia is a 21 year old NYU Stern graduate attempting to land a job at the day trading firm SMB Capital. SMB trains new traders and takes a commission from their profits. Day traders often receive no salary and are generally not profitable for their first 6 months, so a lot of persistence is required. However, a good trader can make $100,000+ per year after less than a year of finishing college.

The documentary “Wall Street Warriors” shows us what it’s like to work in the finance industry and follows Laetitia’s efforts at breaking into Wall Street.

Laetitia’s lack of English vocabulary embarrassed her in a day trading interview. Watch the video (the interview starts at 16 minutes 18 seconds) and test yourself to see if you could have answered these questions.

Is your listening comprehension good enough to hear these questions?

Is your vocabulary strong enough to understand these questions?

Below is a transcript and a breakdown of more questions the interviewers asked Laetitia. Try watching the video to see how well you do before you read the answers in the transcript.  

QUESTION: Give me an example of something in your life where you showed discipline.

LAETITIA: I interned for 2 summers in a row, I get involved 100% I really put all myself into a project.

QUESTION: Trading is very difficult. You will lose money every once in a while ok. Can you get back up and start over again?

LAETITIA: I think so, I mean I understand that you have to emotionally detach yourself and not take it personally. I think I have that capacity to detach myself and just realize it’s not the end of the world.

QUESTION: Yeh, the picture we draw is you should consider yourself an unemotional robot. Basically, you’re not going to sit down and the market is not going to hand you money. It takes time to learn how to trade. 95% of people who start out as traders, they’ll lose money at first, and that’s why we ask you about perseverance, and are you mentally tough and can you survive that type of pressure.

QUESTION: Do you consider yourself to be a competitive person?

LAETITIA: eeermmm yes, yes.

QUESTION: Can you give me an example of your competitiveness ?

QUESTION: Do you see yourself to be RESILIENT?

LAETITIA: Eeeerrmmm……. What does that mean?

Wrong answer. This is a nightmare scenario in a job interview. Resilient is a common word, so if you don’t know it, you’re going to give the interviewer serious doubts about your general level of intelligence.

“Resilience” is the ability to recover quickly from bad events or situations.
If something bad happens to you, but you deal with it effectively and don’t let it distract you too much, you are “resilient”.

Resilience is a good characteristic to have, because it means that you are mentally strong and will be able to cope with the disappointments and failures that all traders encounter at some point.

If something is resilient, it doesn’t break easily and adapts well.

The interviewers are asking Laetitia if she is resilient because they are concerned that she might have had an easy life so far, and won’t be able to cope with adversity and difficult situations if she loses money when she starts trading with SMB Capital.

RESILIENT is an adjective

• - “Do you think Laetitia would be a resilient trader?”

RESILIENCE is a noun

• “Demonstrating resilience is essential if you want to become a day trader.”

Other examples of “resilient”

• Singapore is resilient to global financial shocks.

• Markets are resilient, but a drop here is inevitable.

• British Pound jumps on resilient UK growth.

• Trading hiring is slow, but resilient.

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The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

- Matt Taibi, The Great American Bubble Machine

In his 2009 magazine article, journalist Matt Taibbi caught the imagination of the world with his “evil vampire squid” metaphor. This one metaphor has tarnished the image of Goldman Sachs more than any other piece of reporting since the global financial crisis began in 2007.

Metaphors are great for communicating with an impact and bringing to life opinions and ideas. Unfortunately, they can be one of the most difficult parts of the English language for non-native speakers to master.

Non-native English speakers rarely speak in metaphors. This often makes their conversational style dull and predictable, while limiting their ability to influence and persuade people.

This Finance Business English case study takes a closer look at Matt Taibbi’s legenday metaphor…

What the Hell Is a Vampire Squid?

The Vampire Squid is a mysterious and little known squid (a sea creature similar to an octopus). It lives deep in the ocean, sometimes as low as 3000 feet down. It’s also known as the “Vampire Squid from Hell”.

Check out this video for more information about the great vampire squid wrapped around the face of humanity:

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Watching financial movies is a productive and fun way to get an idea of the type of language you can expect to be using when you start your career in international finance.

Supercapitalist has already been released in America, and will be premiered in Hong Kong in October 2012. Watch this movie and listen out for technical financial jargon that you’re not familiar with. Some of the topics that Supercapitalist covers are, poison pills, short-selling, insider trading, and Fed monetary policy.

It’s also important to make notes of any idioms or metaphors that don’t make sense to you.

The global financial hub of Hong Kong plays the starring role in this movie and showcases the rise of the East as a financial superpower in a globalized world. The plot is based on a young Chinese American hedge fund trader.

Want to Work for a Hedge Fund?

As of 2012, Hong Kong is the hedge fund capital of Asia. There are more hedge fund start ups and assets here than any other city in the Asia Pacific region. If you’re interested in working as a hedge fund analyst, it’s worth considering positions in Hong Kong rather than New York or London.

The hedge fund industry is different to investment banking and is more closely related to asset management. It is seen as much more glamorous and prestigious than other financial sectors such as accounting, consulting or agency trading. The end goal for many people in international finance is to own their own billion dollar hedge fund. Working for an investment bank is often seen as a stepping stone to breaking into a hedge fund.

Hedge funds are focused on the buy side, so it’s not suited to everybody. You need to love analyzing metrics and thinking about how to optimize your investment positions. If you like selling and cutting deals, working on the sell side in investment banking might be more for you.

If you are interested in breaking into the hedge fund industry it is important to start networking. A good place to start would be to search for any Chartered Financial Analyst (CFA) events in your area.

Find a CFA society near you

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An NYU undergraduate named Mark gave us a textbook example of how NOT to write a cover letter.

Mark’s atrocious application to JPMorgan not only extinguished his dreams of becoming an international financier but also made him look like a fool.

The most comical part of Mark’s cover letter?

“I am proficient with Bloomberg terminals, excellent with excel, and can perform basic office functions with terrifying efficiency”.

Do not write a cover letter that resembles anything like this unless you want to be the laughing stock of the international finance community.

Seriously, do not do it.

1/23/2012

J.P. Morgan

Dear Sir or Madame:

I am an ambitious undergraduate at NYU triple majoring in Mathematics, Economics, and Computer Science. I am a punctual, personable, and shrewd individual, yet I have a quality which I pride myself on more than any of these.

I am unequivocally the most unflaggingly hard worker I know, and I love self-improvement. I have always felt that my time should be spent wisely, so I continuously challenge myself; I left Villanova because the work was too easy. Once I realized I could achieve a perfect GPA while holding a part-time job at NYU, I decided to redouble my effort by placing out of two classes, taking two honors classes, and holding two part-time jobs. That semester I achieved a 3.93, and in the same time I managed to bench double my bodyweight and do 35 pull-ups.

I say these things only because solid evidence is more convincing than unverifiable statements, and I want to demonstrate that I am a hard worker. J.P. Morgan is a firm with a reputation that precedes itself and employees who represent only the best and rightest in finance. I know that the employees in this firm will push me to excellence, especially within the Investment Banking division. In fact, one of the supporting reasons I chose Investment Banking over any other division was that I know it is difficult. I hope to augment my character by diligently working for the professionals at Morgan Stanley, and I feel I have much to offer in return.

I am proficient in several programming languages, and I can pick up a new one very quickly. For instance, I learned a years worth of Java from NYU in 27 days on my own; this is how I placed out of two including: Money and Banking, Analysis, Game Theory, Probability and Statistics. Even further, I am taking Machine Learning and Probabilistic Graphical Modeling currently, two programming courses offered by Stanford, so that I may truly offer the most if I am accepted. I am proficient with Bloomberg terminals, excellent with excel, and can perform basic office functions with terrifying efficiency. I have plenty of experience in the professional world through my internship at Merrill Lynch, and my research assistant position at NYU. In fact, my most recent employer has found me so useful that he promoted me to a Research Assistant and an official CTED intern. This role is usually reserved for Masters students, but my employer gave the title to me so that he could give me more work.

Please realize that I am not a braggart or conceited, I just want to outline my usefulness. Egos can be a huge liability, and I try not to have one.

Thank you so much for your time, and I look forward to hearing from you.

Best,

Mark

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Below is a question a student from Moscow had for Finance Business English as he prepared to start working in the prop trading industry:

Question:

Hi Lee,

I’m wondering, have you ever seen book or article about “How hedge/investment funds get/dump their position?”. For example, fund want to buy big volume of a futures, how he will do that ? and an opposite, if fund wants to sell big volume? It’s impossible just click sell or buy, funds have a special algoritm/strategy of getting/dumping positions. So, i want to understand it in details but can’t find interesting, may be you know.

Answer:

Hedge funds hire a PRIME BROKER to execute their trades (as opposed to a RETAIL broker).

A prime broker acts as the hedge fund’s central broker who executes trades for the fund, usually online or through an automated computer system. Moreover, a prime broker can facilitate trades in large blocks or in illiquid securities.

What is a hedge fund broker?

How to understand prime brokerage

Most serious institutional investors use Bloomberg terminals to trade. These terminals are linked to the institutional investor’s prime broker.

Bloomberg terminal

I’ve linked to 2 examples of prime brokerages below. The traders at the prime brokerage execute the orders that they receive from institutional investors like hedge funds / asset managers (e.g, Fidelity).

Shorline Trading

Triad Securities

Executing buy and sell orders according to client instructions concerns the prime broker account team. How well the traders execute the order may also determine how the prime broker firm gets paid. Prime brokers make money on the spread of an order, or the difference between the offer (purchase price) and bid (sales price) of a security.

The Traders at the prime broker firm make the trades – this might be on Merrill’s MLX platform, Goldman’s REDIPlus platform, FlexTrade, Fidessa, or anything else.

Traders at the prime brokers spend a lot of time dividing large orders (they received from institutional investors) into smaller chunks, setting up buying schedules, and making sure that clients get what they want at a reasonable price.

Below is a very interesting article which mentions some advanced trading terms that you might be interested in (latency arbitrage, dark pools).

An open letter to Mark Zuckerberg about why it doesn’t matter where you list your stock

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