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Math&Econ vs. Finance for Trading
 

steve39's picture
 
Points)
 on 2/13/12 at 9:10pm

Sorry if this question has come up a bit, but I'm at an important point in my development where I'm applying to target schools to get better recruitment. My heart is in trading. I feel that mathematics and economics relate to trading and/or quant roles more than any business major. And they are also extremely interesting to me.

Am I correct in my beliefs? It will also be much easier to transfer into targets as Math/Econ vs. transferring into top undergrad b-schools

Real important to me right now, as app deadlines are within the next 2 weeks. Thanks in advance fellas

Tags:
djfiii's picture

Yes. If you know for sure

 
Points)
 on 2/13/12 at 9:18pm

Yes. If you know for sure trading is where you want to be, go with Math. You could really even skip out on the Econ and just focus entirely on Math. Depending on where you go to school you might be able to work in a Financial Engineering class or two, to demonstrate that interest in the application of Math to the financial markets.

steve39's picture

Well yeah, the purpose of the

 
Points)
 on 2/13/12 at 9:48pm

Well yeah, the purpose of the second Economics major (and a possible Finance minor) would be to set me up in the future for a top MFin, MFE, or FinMath degree later on.

rynofrowan's picture

math fo shaw. econ is great

ST
(Baboon, 171
 
Points)
 on 2/13/12 at 10:39pm

math fo shaw. econ is great though and if you keen on trading news etc this is great to have also, however can be imbibed OTJ

Moving tonnes of product. Making fat stacks.

rs12's picture

No doubt go with math. It's

 
Points)
 on 2/13/12 at 10:52pm

No doubt go with math. It's no wonder why you see so many engineers, physics majors, and those with a more technical background end up in finance. If you have your heart set on trading think about what type. Economics might be very useful if you are trading based off large macro-economic indicators (i.e. gdp, unemployment rates, and labor statistics). However if you want to become an interest rate trader....they love people who are more technical. It all depends, if you can double major econ/math you would diversify yourself even more. If you had to choose between the two, major in math and take a few econ courses. In your interview spinoff how you are extremely technical, but love the applications as a few other people mentioned above.

Success is my only option and failure is not

optimus_prime's picture

Another vote for math...but

 
Points)
 on 2/13/12 at 11:01pm

Another vote for math...but unless you're "trading" exotics or highly structured stuff, you really don't *need* it as long as you can do mental math reasonably quickly. People here tend to really overrate it. I think I know a single credit/equity(non-derivs)/rates trader with a math degree.

lambertoscar's picture

Voting for Math? Ummm I don't

(Monkey, 32
 
Points)
 on 2/15/12 at 4:09pm

Voting for Math? Ummm I don't think anyone who replied here has done a math or econ undergrad. The goofballs here don't realize that the economics training at a target university is very different from average schools. Econ majors at Harvard (and other ivies) for example, get a solid foundation of real analysis, differential equations, time series analysis, stats and not to mention understand monetary economics, macro theory, micro, econometrics and so on, and learn languages like R, Stata, EViews etc. So infact I'd say if you are smart enough, do an econ first major, statistics second major and a minor in comp sci.

Math is overrated, pure math is totally inapplicable (algebraic topology? functional analysis? group theory?)... applied math is okay, and profs teaching financial math in applied math courses are usually mathematicians and have a severe lack of understanding of markets and the "need" for financial derivatives.

Mathies like to find explicit solutions to those PDEs or stochastic differential equations that are a consequence of a financial derivatives valuation. If you aren't looking for analytical solutions to a set of equations then you use numerical analysis, which is what is required in the industry. Rather than using numerical analysis from an applied math approach, I'd use time series econometric techniques any day, since economists tend not to stray away from the practicality of a problem as much as a mathematician does.

Anyway, you get the jist of it.

The masked avenger par sexellence

protectedclass's picture

I don't think it really

 
Points)
 on 2/15/12 at 5:42pm

I don't think it really matters what you major in, just be good mental math, decent at programming, strong with prob/stats, and show a passion for financial markets. If you can accomplish all of those, it doesn't really matter. But to get the first round interview, I would recommend at least some sort of math related major(CS,EE/Physics, Applied Math, Economics+ something else, Finance + something else).

Marked to Market's picture

To the original poster: do

 
Points)
 on 2/15/12 at 10:21pm

To the original poster: do math. Math is impressive. Econ isn't.

To Lambertoscar: I did major in math. I work at a large hedge fund and am pretty quant. I have met a large number of harvard econ students and alums. None of those I have met, who majored only in economics without a secondary in some more quantitative field, seemed to have a deep understanding of any of the topics you mentioned. Broadly speaking, undergraduate economics majors, even at Harvard, are just not that quantitative.

Just so I know, which Harvard econ classes impart a sophisticated understanding of real analysis? Which econ classes which undergraduates actually take cover time series or econometrics in useful depth?

I'm not saying that being good at math is the only, or even best, way to get a job in trading out of undergrad. And I would be the first to admit that I know less about the economics major at Harvard than anyone who is or was an economics major at Harvard. However, in a vacuum, I have never met anyone who would be objectively more impressed by an undergraduate economics major than an undergraduate math major on an otherwise identical candidate.

steve39's picture

Follow up question: I know

 
Points)
 on 2/16/12 at 2:16pm

Follow up question:

I know that UVA, NYU, etc. are all targets because of their business majors. Shit even Baruch is considered a semi or mid-target. Everyone here seems to bash their CAS programs though.

Does that put me at a severe disadvantage then if I am going to a school such as NYU or UVA but major in Mathematics and Economics and am NOT apart of their business schools?

Bernankey's picture

steve39 wrote: Follow up

ST
(Gorilla, 613
 
Points)
 on 2/16/12 at 2:42pm
steve39:

Follow up question:

I know that UVA, NYU, etc. are all targets because of their business majors. Shit even Baruch is considered a semi or mid-target. Everyone here seems to bash their CAS programs though.

Does that put me at a severe disadvantage then if I am going to a school such as NYU or UVA but major in Mathematics and Economics and am NOT apart of their business schools?

Baruch is a distant non-target...its a CUNY school thats one step up above a community college...Apparently they have a decent MFE program, but it ends with that...

The only poster worth reading is lambertoscar on this thread.

bcf2011's picture

Purely depends on what type

(Monkey, 39
 
Points)
 on 2/16/12 at 4:24pm

Purely depends on what type of trading you want to do. If you want to work a prop firm quantitative skills are a must (ie math is good), but if you want to do S&T at a bb or something, showing an interest in finance and the markets is much more important (ie Finance at Wharton would be much, much better than just math at Penn's CAS for BB). Of course, math + finance is good if you want to do something with derivatives...but if you don't care, I don't think it matters as much. But guess I can't really say on programs at schools like NYU and UVA

FreezePops's picture

Quote: Econ majors at Harvard

(Orangutan, 309
 
Points)
 on 2/16/12 at 5:08pm

Econ majors at Harvard (and other ivies) for example, get a solid foundation of real analysis, differential equations, time series analysis, stats

This is not true.
They may choose to take these courses as they are all prerequisites for phd programs, but it is by no means required.
http://www.economics.harvard.edu/files/Requirement...

You can get an econ concentration at Harvard without taking anything past calc 1 and econometrics (though it must be a bit watered down if linear algebra is not a per-requisite).

Marked to Market's picture

Quote: You can get an econ

 
Points)
 on 2/16/12 at 6:13pm

You can get an econ concentration at Harvard without taking anything past calc 1 and econometrics (though it must be a bit watered down if linear algebra is not a per-requisite)..

This is vastly more consistent with my experience of Harvard undergraduate economics majors than lambertoscar.

lambertoscar's picture

Ummm, well I guess I am not

(Monkey, 32
 
Points)
 on 2/16/12 at 7:06pm

Ummm, well I guess I am not referring to kids who met the basic requirements for their degree and graduated in econ. The poster sounds like he is driven, IF you are driven then economics allows you to focus on what matters. I mean you can do courses in financial economics (which will cover asset pricing), focus on econometrics and game theory (and not economic history or health economics) and still get a broad understanding of the rest of economics from the undergrad breadth requirements.

I personally know many econ majors who didn't get much out of their degree (they chose it as an alternative to political science), but I also know the geeky know-it-all econ majors who have a fantastic understanding of many subjects.

Bottom line, econ caters to the artsy and scientific types. Get advice from your undergrad advisor to express your line of interest that you'd like to pursue and couple it with a quant major.

That being said, the driven econ majors were the ones who "wanted" to get into grad school, so they met the honors requirements from their school and did advanced math courses since the pre-reqs for any top econ masters/phd program are sophisticated quantitative skills.

So just hang around with the kids who wanna do their phd, and instead get into trading. It's gold.

The masked avenger par sexellence

FreezePops's picture

Econ's a great major. There's

(Orangutan, 309
 
Points)
 on 2/16/12 at 7:30pm

Econ's a great major. There's no doubt about it.
By itself though, it just isn't impressive. For me, it required something like 15 credits (+ general requirements) whereas a b.s. in pure mathematics required upwards of 60.
In my mind, there's no reason not to do both.

Algebra was really the only class that seemed pointless to me, but it's worth suffering through to finish the major. I doubt most undergrad programs require algebraic topology, functional analysis or the like.
These are all generally graduate level courses, even at "targets".

If the op was asking whether a graduate degree in pure mathematics or economics was more valuable, your advice would hold a little bit more weight.

djfiii's picture

lambertoscar wrote: Ummm,

 
Points)
 on 2/16/12 at 7:56pm
studdardpaul's picture

Very interested in this. What

O
(Monkey, 56
 
Points)
 on 2/16/12 at 8:39pm
Marked to Market's picture

Quote: Ummm, well I guess I

 
Points)
 on 2/16/12 at 10:38pm
lambertoscar's picture

I don't know how I lost,

(Monkey, 32
 
Points)
 on 2/17/12 at 9:32am

The masked avenger par sexellence

optimus_prime's picture

You're a dumbass.

 
Points)
 on 2/17/12 at 7:25pm
Marked to Market's picture

I probably made this

 
Points)
 on 2/18/12 at 11:32am
canas15's picture

So, I'm double majoring in

(Baboon, 133
 
Points)
 on 2/18/12 at 12:57pm

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