Do traders really make more money than desk quants?
Just wondering if total comp between quants and traders at tier 1 IBs are much different at relatively junior levels, say 3-5 years experience. Been offered a trading position (currently quant), and trying to decide whether to bite...
Note that I'm talking about a traditional trading role at an investment bank vs a desk quant role.
As far as I know they are similar for juniors, or slightly favouring quants on the most junior levels.
Why is this? Whats a junior position (Analyst and Associate)? Is this still true?
.
Quants are support. Traders will - more often than not - make more money than quants… really depends on the size of your book and how well you do. Any seat where you have direct P/L responsibility will offer significantly more monetary upside.
It's not uncommon for traders on the sell-side with 5 or so years of experience to pull in 500k-750k+.
Not sure what you're trying to gather here… but don't make a decision based upon net earnings over the next 1-2 years. I would think about it over 5+ years and how the roles fit within your career goals.
The only thing I'm trying to gather here is a few data points about compensation. Clearly money is just one aspect, but as I can't get too much help on a forum about the personal side, e.g. if I like the new team, whether it fits my goals, how my skillset matches the new job, etc, so I'm just asking about numbers... Thanks for the advice! (gut feeling, 500-700k seems kinda high nowadays unless running a really stellar desk...)
at year 1-2, 90% of the time the quants will make more money (when i was a desk quant, i made 50k more than the junior traders on my desk). However, a couple years later, those junior traders had become middle-rank traders, and made 500k....which was more than double what i got paid as a desk quant.
Yes.
Quant & Strats are extremely valued on the desk, some even as much as traders. However, their pay will lag far behind the best traders. Let's just say after VP level, the pay differential can easily widen to 3x difference or more.
Here's why: traders take risk.
If a book loses money, the buck ultimately stops at the trader. The trader is ultimately responsible for both the successes and failures of an operation. In some sense, there's a much higher career risk for traders. As a result, they will be compensated for it.
Here's an example. Let's say a quant/strat mis-programmed a key component of the risk pricing model. He does not let the trader know that there's a mistake, and the trader trades off the model, losing millions in the process. Whose fault is it here? Who will get fired first?
The answer: Both will get fired, but the trader will get fired even faster than the strat/quant.
Why? Because traders need to own up to the responsibility of having the platform to take the risk.
in my original reply i only read the headline...after reading your thread....YES...you should take the trading job...this is the natural progression. Why? Because when you are in a trading seat and actually taking risk, your brain will be under a different kind of pressure than you have been accustomed to (especially the first time that you lose a large chunk of money...it happens to everybody). This will trigger you to think more, and to think faster. You will start to see correlations, which will lead you to ask more questions, and discover things that you weren't even looking for in your quant role.
Basically, necessity is the mother of invention. Being in a risk taking seat is generally required to light a fire under people and make them think in a more "commercial" way. When you are a quant and other people are taking the actual PnL risk of the trades, you have a degree of emotional distance. Traders would like their quants to feel that pressure (because it generally makes them better quants)...and this is often why traders can be "harsh" with their quants...but there really is no substitute for having responsibility for actual market risk and PnL.
You can always go back to a quant role if you don't like trading...but institutional trading seats are not as easily available as desk quant seats (which are always in demand if you have the skills). As a plus, if you do make a career round trip, you'll be a better quant in the end. So, its win-win. Take the trading job.
Dolore voluptates ex quia esse voluptas. Odio doloribus voluptatem modi dolorem possimus. Officia voluptatem dolor quis. Magni quia id ea in tempore nostrum praesentium.
Optio quod doloribus et fuga qui animi voluptatem. Repudiandae qui est possimus sed voluptatem perspiciatis et. Quae perferendis et qui blanditiis tenetur omnis debitis. Nihil ullam quos sit delectus corporis magni. Magni accusamus explicabo expedita modi a doloribus est.
Sed quas reprehenderit doloribus tempore ut. Aspernatur ut et harum sunt repellat voluptatem. Eos natus aut vel quis.
Sit delectus aliquam cupiditate molestias. Non repellendus sunt tempore unde corrupti. Tenetur aut ad iure et tempore assumenda nesciunt quae. Sed deleniti mollitia sed fuga.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...