Trade Pitches —
How to pitch any trade in two minutes.
A trade pitch is the most open-ended question in any S&T interview. It tests whether you can form a market view, size the risk and reward, and communicate both concisely under pressure. This section gives you the framework, 10 fully worked pitches across asset classes, and a repeatable process for building your own.
Every good trade pitch has the same five components, regardless of asset class. Interviewers are not testing whether you are right — they are testing whether you can think through a trade systematically and communicate it clearly. Use this structure and you will always sound prepared.
A superday trade pitch should take 90 seconds to two minutes. Longer and you are rambling; shorter and you have not covered the bases. Practise timing yourself out loud — a pitch that sounds fine in your head takes twice as long when spoken. End with "I'd stop out at X — happy to discuss the risks." That invites follow-up on your terms rather than theirs.
One common mistake: candidates pitch a stock when asked for a trade. S&T is not about picking stocks. Macro trades — rates curve moves, FX relative value, credit spread dynamics — are far more relevant to the desks you are applying to. Use stock pitches only as a last resort.
Short on time? These three cover rates, FX, and macro — the most commonly asked pitch types in S&T first rounds.
- The Bank Rate is at 3.75%, the sixth cut since August 2024 — the front end is responding to policy easing
- 2-year gilts are pricing further cuts, pulling yields lower at the short end
- The 10-year gilt yield sits around 4.37% — the long end is anchored by persistent supply: the DMO continues heavy issuance and the BoE runs active QT
- Fiscal risks remain elevated — any hint of further UK borrowing re-prices the long end higher, maintaining the 2s10s spread around 70–80bps and trending wider
- Services inflation is still sticky (~3.2% CPI), which limits how aggressively the BoE can cut, but the direction is clearly lower on the front end
Trade: Long 2-year gilt / Short 10-year gilt (or equivalent via futures — 2L vs TY)
Current 2s10s: ~73bps
Risks: Inflation re-accelerates forcing the BoE to pause cuts (flattening trade instead). Fiscal credibility improves materially, anchoring the long end lower. UK recession drives a flight-to-quality bid for 10s that outpaces the front-end move.
- Fed Funds target is ~3.5–3.75% — the easing cycle is real but gradual, which is exactly the environment where the belly outperforms
- Core PCE is trending toward 2.5%, giving the Fed cover to continue cutting without triggering inflation concerns
- 5-year yields (~4.0–4.1%) price in too few cuts relative to the base case of 2–3 more in 2026 — there is room to rally 30–40bps
- No massive supply headwinds at the 5-year point vs the 10s/30s where fiscal deficits are most acutely priced
- In a soft-landing, growth-holds-but-Fed-cuts scenario, the belly consistently outperforms both ends of the curve historically
Trade: Long 5-year Treasury note (FV futures or cash 5-year note)
Current 5yr yield: ~4.05%
Risks: US growth surprises to the upside, causing the Fed to pause — 5-year yields sell off sharply. Inflation re-accelerates beyond core PCE forecasts. Labour market data shows unexpected tightness, reversing rate-cut expectations.
- ECB deposit rate: ~2.00%. Fed Funds: ~3.75%. The spread of ~175bps is unusually wide — historically this gap has compressed as cycles align
- Euro area core CPI has fallen to ~2% — the ECB has achieved its mandate faster than the Fed; it has more room and more reason to cut
- European GDP growth: ~1–1.3% vs US ~2.4%. Weaker growth means more easing, not less
- EUR 2-year swap rate at ~2.5% does not fully price further ECB cuts the market expects in 2026 — there is residual rally potential
- The relative-value expression (long EUR, short USD 2s) profits from the ECB-Fed spread narrowing regardless of which way absolute rates move
Trade: Receive EUR 2-year IRS / Pay USD 2-year IRS (cross-currency relative value)
Current EUR/USD 2yr spread: ~125bps
Risks: Euro area inflation re-accelerates (energy shock, wage spiral), forcing the ECB to pause. US growth deteriorates sharply, causing the Fed to cut faster than expected — dollar front-end rallies more than EUR. FX volatility creates unexpected basis risk in the cross-currency expression.
- Goldman 2026 thesis: broadening global growth favours pro-cyclical FX — AUD benefits from global capex, commodities exposure, and China stabilisation
- RBA cutting cycle is less advanced than the BoE — higher relative carry in AUD vs GBP
- China's ~4.5% GDP growth supports commodity demand; Australia as a major iron ore and LNG exporter benefits directly
- If global risk sentiment improves, AUD is one of the first beneficiaries
- UK GDP growth: ~1%, well below G10 peers — no macro growth story to support cable
- BoE is cutting but cautiously (Bank Rate: 3.75%). Sticky services inflation (~3.2% CPI) limits the pace of easing
- UK fiscal position: large structural deficit, continuing gilt supply — persistent headwind for sterling
- Current account deficit provides a structural supply of GBP
Trade: Long AUD/GBP spot or via 3-month forward (no pure dollar exposure). Carry is slightly negative — this is a macro regime trade, not a yield hunt.
Risks: China growth disappoints materially (drags AUD). UK fiscal credibility improves unexpectedly — sterling re-rates. Global risk-off (AUD sells sharply vs safe havens). Negative carry erodes the position if the move takes longer than expected.
- USD/JPY: ~157–158. BoJ policy rate: ~0.50% vs Fed Funds ~3.75% — a 325bps carry differential that still strongly favours being long USD
- BoJ is hiking, but only in increments of 25bps every few meetings — the pace of normalisation is too slow to close the gap meaningfully in 2026
- Japanese inflation at ~2.9% is being driven partly by food and energy imports — structural domestic demand inflation is less entrenched, limiting BoJ aggression
- Japanese institutional investors (life insurers, pension funds) continue to hold large unhedged foreign bond positions — structural yen outflows
- Consensus is gradual yen appreciation — the contrarian view is that the carry is simply too attractive to unwind quickly without a sharp external shock
Trade: Long USD/JPY spot with a defined stop — this is a carry trade with tail risk, so position sizing matters.
Key context: BoJ intervened at 152 in 2022 and near 160 in 2024. Avoid positions that require a move through 162+ without a stop.
Risks: BoJ surprises with an aggressive hike (50bps+), triggering a violent yen squeeze — as happened in August 2024 when USD/JPY fell 15 yen in days. Fed cuts faster than expected, narrowing the differential. Market risk-off drives safe-haven yen flows. BoJ intervention directly in the FX market.
- Mexico received record FDI inflows in 2024–25, directly linked to US companies relocating manufacturing from China under the USMCA framework
- Nearshoring is not cyclical — it is a multi-year structural shift driven by US-China trade tensions, tariff regimes, and supply chain resilience priorities
- Banxico real rates remain positive even after cuts — MXN still offers attractive carry vs the dollar
- GDP growth: ~2% — well above regional peers and supported by remittances and manufacturing investment
- Sell-side consensus (BofA, Goldman) views MXN as a structural EM winner in the nearshoring theme through 2026
Trade: Long MXN / Short USD via 3-month NDF or spot (MXN is fully convertible). Positive carry enhances returns.
USD/MXN: ~17.2 (lower = MXN stronger)
Risks: US imposes new tariffs on Mexico specifically (USMCA renegotiation risk). Political uncertainty under the new Morena government disrupts the investment climate. Global risk-off triggers EM selloff — MXN is a high-beta EM currency that sells sharply in risk-off. Banxico cuts rates more aggressively than expected, reducing carry.
Mexico: Primary US nearshoring hub under USMCA. Record FDI inflows 2024–25 into manufacturing and infrastructure. Improving fiscal trajectory alongside FDI-driven growth. Spreads wide relative to fundamentals improving.
Morocco: Europe's emerging nearshoring hub for renewables, EVs, and light manufacturing. Major OEM investment pipeline from Renault, Stellantis, and BYD. EU-Morocco trade relationship deepening. Credit improving with FDI.
Dominican Republic: Benefits from US nearshoring of light manufacturing and logistics via free trade zones. Strong tourism revenues diversify the fiscal base. Spreads offer value versus investment grade EM peers.
Trade: Long equal-weighted TRS basket (Dom Rep + Mexico + Morocco sovereign USD bonds) vs short EMBI broad index via CDS or TRS
Horizon: 6–12 months
Macro tailwinds: Fed easing cycle reduces EM funding pressure broadly; this basket has additional structural spread compression from nearshoring FDI inflows
Total return target: 10–15% on the TRS over 12 months
Risks: US imposes tariffs that disrupt USMCA (kills Mexico thesis). China accelerates nearshoring in other regions (competition for FDI). Global risk-off drives broad EM selloff. Fed pauses easing, keeping funding costs elevated for EM borrowers.
- US IG spreads (~80bps over Treasuries) are tight but all-in yields (~4.7–5.0% for BBB) remain attractive as an asset class
- IG primary issuance has been strong but net supply is manageable — demand from insurers and pension funds is structural and yield-seeking
- HY market has shrunk ~25% since 2021 — rising stars were upgraded to IG, leaving a lower-quality residual HY universe
- HY spreads are volatile and have lagged IG performance — default risk is rising in lower-quality names and private credit adjacents
- In a late cycle environment, quality outperforms as the risk premium for default risk rises faster than the carry advantage of HY
Trade: Long IG credit index (e.g. iBoxx US $ Investment Grade or equivalent ETF) / Short HY credit index (CDX HY or HYG ETF)
Expression: Relative-value carry trade — long IG OAS, short HY OAS, targeting compression of the IG/HY spread differential
Current HY spread: ~300–350bps. IG: ~80bps. Differential: ~240bps — historically this compresses in late cycle before widening sharply in recession
Risks: Credit markets rally broadly (both IG and HY tighten) — the relative trade makes less money than outright long. Economic growth accelerates sharply, compressing the HY risk premium faster than IG. Private credit stress spills back into public HY, widening both but HY more — the trade works but less cleanly.
- Trading: ~$57–58, roughly 37% below its 52-week high
- Revenue ~$8.4bn/quarter, total payment volume growing high-single digits
- Operating margins ~18%; strong free cash flow generation; active buyback programme
- Venmo monetisation and branded checkout remain durable profit drivers
- Market is extrapolating competition risks too aggressively — at current price, you're paying a low multiple for a cash-generative franchise
Trade: Sell the January 2027 $40 cash-secured put
Premium received: ~$1.88 per share (~4.6% annualised return on the $40 cash set aside)
Combined yield: Put premium (~4.6%) + money market on cash (~4%) = ~8.6% annualised while you wait
Outcome 1: Stock stays above $40 — keep the premium (~$188/contract), earn 4.6% + MM yield. Repeat the strategy.
Outcome 2: Stock falls below $40 — assigned the shares at an effective cost of ~$38. This is the level you're comfortable owning PayPal long term given the fundamental case.
Risks: Structural deterioration in the business (loses branded checkout share). Broader payment sector re-rating down. Being assigned at $38 in a sharply falling market where PayPal continues lower.
- AI capex spills over — data centres need power infrastructure, cooling systems, grid upgrades: Schneider Electric, Siemens, ABB are direct beneficiaries
- European re-industrialisation: defence spending, energy transition, and nearshoring drive capex across the sector
- Valuations: European industrials trade at a discount to US peers on EV/EBITDA despite comparable earnings growth
- Earnings revisions: this sector has seen consistent positive revisions as the capex cycle builds
- S&P 500 forward P/E: ~22x. Mega-cap tech: 28–35x on AI-fuelled multiples that require flawless execution
- AI capex is exploding — Microsoft, Google, Amazon are spending hundreds of billions; monetisation lags materially
- Any earnings guidance cut or capex surprise triggers sharp multiple compression from elevated levels
- Historical pattern: when tech leadership peaks, the relative trade into industrials/materials runs for 12–24 months
Structure: Long Euro Stoxx Industrials sub-index (or basket: Schneider, Siemens, ABB, Safran) / Short QQQ (Nasdaq 100 ETF) as the relative value expression
Risks: AI monetisation arrives faster than expected, vindicating tech multiples. European recession kills industrial earnings. Mega-cap buybacks provide a technical floor under tech stocks. FX hedging costs erode the European long leg returns for USD-based investors.
The 10 pitches above give you a baseline, but interviewers will sometimes ask you to pitch something different — "what else are you watching?" or "give me a trade in a specific asset class." This section gives you a repeatable sourcing process so you can always have two or three live ideas ready.
Every trade idea starts with one of two questions: (1) What has moved a lot recently that could mean-revert? or (2) What has not yet moved that should, given a macro development?
Question (1) generates relative-value and spread trades — things that have gotten cheap or rich relative to history. Question (2) generates directional macro trades — things that are not yet pricing in a development you believe is coming. Most of the best trade pitches in interviews are one or the other. Know which category your pitch belongs to.