Quant to Trading
Hi guys,
I am currently making a living as a quant in flow rates, and would like to move into trading. Has any of you made a similar move? How did it go? How can I position myself best for such a move?
Just for the record, I spent quite a few years on a PhD, so even though I'm a bit old (30) I have only been "out of school" for about year and a half. Is this too long to apply to an Associate program?
Cheers!
Do you want to restrict yourself to flow rates at a BB? Because some of the quant HFs might consider you along the PM track. I don't know if D.E Shaw is hiring , but Two Sigma is. If you try to move into IRD (swaptions) , then any vol/vol arb fund might be interested for Fixed Income.
On an unrelated note , I always thought that flow rates was relatively unquanty - what sort of stuff do you use at work?
Thanks for commenting.
I am interested in more "traditional" trading roles rather than quant trading at the moment. Not necessarily sell-side flow rates, although I have understood that the buy-side only takes experienced traders and the way to start is on the sell side. That's why I asked about associate programs. Are they the only way to break in? I'd appreciate any comments on this.
As for your question, flow rates isn't very quanty, indeed. There is some complexity lately due to collateralization, discounting, etc, but the role is mostly a developer role.
Did you complete your PhD?
Yes, I finished about year and a half ago.
Nobody in the forum has done this before?
Actually , it's certainly possible - but more so on the buyside, and traders with PHDs are generally in exotics/hybrids , not exactly a booming business.
But honestly , quant Asset Management -> quant PM would be by far the easier and more common path for you. And might not take that long either. Look around at Hedge Funds , man.
Thanks for your comment, I will look at HF as well! I just wouldn't want to get into a "quant Asset Management" role that becomes just another programming role.
Sure , but you're going to have to do research + run models in some programming language. Doesn't have to be C/C++/Java unless the trading itself is automated.
The other place you should , of course , look at as a flow quant is HFT - if that's at all what you want. If you want to take discretionary risk , then I'd say quant global macro and then try to transition into a PM/trader role.
if you want to be a buyside PM your best route will be to try to get hired by a PM who needs someone to do quant analysis. From there you can watch and try to eventually make the jump to actually running some of the balance sheet. But discretionary traders are probably not going to want to hire you to run money with a Phd and no track record or experience trading.
Thanks for your comments, guys.
I'm not an academic type, I think, but I know a PhD is going to be more of a hurdle than a help when switching to trading. Also, it's true that I don't really have a track record, and with all the regulatory restrictions on personal trading that come with my current job it's not easy to build one up. I will definitely look into the quant trading path in more detail.
What about doing the move on the sell-side? Flow trading is a different beast, but I reckon it can be quite interesting as well. Any thoughts?
I've seen such a move and it didn't go well.
I've heard that before -- what happened in the case you saw? What do you think the problem was?
(duplicate)
you can't apply to an "associate" program from your current role. however - you can make the jump if you slowly start working in that direction. develop relationships with traders and sales guys, be proactive in helping out and tackling issues that come up, don't just check your boxes and call it a day. stay late, ask intelligent questions of guys, etc. it's a bit like being an intern trying to land a full time role except you can actually offer something in return.
for example if you're a phd in flow rates, you can talk to a trader you have a good relationship with, what kind of term premium models do they favor, why, what your view is, how do they calibrate, what's the residuals, what's more appropriate for xyz market environment,etc.
after a bit, you can start asking him questions how he looks at markets etc. and you can start putting together trade ideas. start tracking the mundane stuff everyday - where is GC, LIBOR setting, who set where, how are front packs trading to curve, what are rough vol adjusted points on the curve, etc. etc.
if you do this long enough and well enough and a trading seat opens up, you can make the jump. it's not easy but that's how it would happen for you on the sell side. obviously it's something you really need to want and work towards, which not everyone wants to do post-PhD, 30yrs old
btw - the whole "jump to quant buyside gig" are either people with no relevant experience or who aren't familiar with that world. no one will hire you to the buyside to magically start being a quant trader. most of those job postings are glorified programmers - if you think your job now is programming heavy, wait until you get into one of those seats. having said that, you can obviously eventually become an actual quant trader but that path is no easier than the one i laid out for a flow seat and it sounds like your interests lie in that direction as well.
Hmm , Two Sigma/AQR/DE Shaw routinely hire Phds for their systematic trading divisions. Isn't that what a 'quant trader' is , a quantitative systematic trader? He'll start by investigating strategies , and will eventually be able to develop strategies on his own. That's how any quant HF desk works.
look they can call you whatever you want but ultimately you are either a programmer or a trader. ed seykota said it best, paraphrasing here, all systems are ultimately discretionary and all discretionary trades are ultimately based on a system. you will not go to those shops and step into any sort of seat with risk to your name (which is the ultimate goal). "quant trading" is vastly different than it was in the 70s, the 80s, the 90s, early 2000s, mid 2000s to 2008, and 2009 till now.
and whoever said quants have no place in flow rates have zero idea what they're talking about. quants obviously have a closer connection on an exotics or vol desk but flow rates at top banks has and will continue to be quant driven (not to mention, good luck finding any exotics desks that can be described as 'growing').
BTW OP: What's your Phd in? Is in Statistics? Machine learning? Any sort of field in which you do a lot of data crunching?
Move from BB quant to HF trading/PM? (Originally Posted: 09/12/2011)
I've been seeing some opportunities for moving from sell-side to buy-side and I'd like some help understanding how to judge the relative "quality" of the roles I'm seeing.
As I understand it, at a fundamental firm the workflow goes: analyst does research and presents findings to PM, PM makes investment decision, trader executes and (?) risk manages the trade once it's on the books.
1) How much sense does it make when I'm being told that the role is fluid and is a mix of jr PM/trader? Also, I'm told that traders are expected to have some impact on PM's investment decisions. Reasonable or not?
2) The trading strategies I'm seeing involve usage of more complex products than just one delta (e.g. derivatives, structured credit etc). I'm assuming this increases the value of the trader's role. The traders I'm seeing have very good sell-side experience, which makes me feel better that this role is not mindless execution.
3) What other kinds of questions can I ask to get a better understanding about how desirable these roles are? What are the "good" and "bad" answers?
4) I'm worried that a pure execution trader at a fundamental shop is basically SOL if his fund folds. How transferable is the experience?
5) It seems like the more quant the shop, the more important the trader's role and the more valuable the experience. True?
Background: I'm currently a quant in a BB filling a risk role. I have a quant-type PhD from a pretty good school and just under two years experience. The funds I'm getting replies from are high single-digit billions to low doubles, so fairly big without quite cracking top 25. Sorry for the long post; hope to hear back from you guys.
Bump. I'd appreciate any help, guys.
Are these hedge funds quant funds or more fundamental? Because at the former, traders are basically programmers/quants who write code and then manage the risks of their trades. They're not "traders" in the traditional sense. At a long/short equity or event-driven fund, a trader/junior PM will do a lot of fundamental research of companies, macro analysis, etc., and provide recommendations. The ultimate call will be made by the PM, but the junior person can play a significant and rewarding role.
Pure execution role is pretty crappy. Very boring and almost no transferable skill sets.
You said that you got to see the trading strategies. I assume you are referring to the funds you're interviewing at? Were you able to get an insight into their strategies based on the visits? Sorry if this seems like a mundane question; point #2 wasn't clear.
Thanks for the input. I've been to a few places. Some were more quant, some were fundamental (long short etc). By "strategies" I mean the strategy the trader used to get the exposure his PM wanted which was the most prudent (from a risk management perspective) and cheapest, Yes, this was at places I interviewed.
How do I judge how far along the "execution->discretion" continuum a role is? I've been told by at least one trader that he can allocate X% of the funds he trades according to his own judgment. Also, if the funds have analysts to do research, why does the trader also do research? What does he bring to the table that the analysts don't?
@bearflatten: Thanks for the comments, this makes a lot of sense. It'll be hard work (especially since I'm on the shy side :)) but sounds like fun work as well -- and so far I really love the trading floor atmosphere!
@GS: My PhD was in particle physics, but it wasn't very data intensive. Definitely lots of number crunching, but data sets were small. The quant shops in London that I've contacted prefer PhDs in econometrics, signal processing or statistics for quant trading roles, and I tend to get categorized in the quant developer box, which may include researching strategies, but will certainly involve heavy (+99%) programming.
How is the atmosphere in a quant shop? One thing I like from the trading floor is actually the chaos and noise, and the quants I've worked with tend to be very quiet people (the more the more quanty their job is)...
Quant to discretionary trading career switch (Originally Posted: 12/17/2014)
Hello Wall Street Oasis,
Year end evaluations are in and I'm faced with a career crossroad. Quick recap: I'm a math major and third year quant in 0.5b global macro fund in Asia. Mainly backtesting but no allocation since. Quite confident in my quant strats which is volatility diffusion intermarket momentum. But again, they're all backtested.
Essentially, systematic fund mediocre returns. My company loves me and they're thinking where they should place me. My options are:
Discretionary trading. I was shocked by it at first but they do value my ideas on the market. I'm also quite interested to get experience in this area.
Bump up allocation in my systematic strats. My initial choice. Though please understand that my strats are just run by one person. Me. Hearing stories that the best quant teams, DE Shaw, Citadel etc, are multi-PhD constructed, I was thinking no way I can compete with them.
MFin then transition to PM role. There's the risk that I'm losing this lucrative position I have for a chance at another hedge fund.
I was leaning towards 3. I put myself 65% getting into one of the top 2 US MFin schools (Hint: P or M). Then again, I'm guessing a discretionary trader at a mid sized fund doesn't come everyday. Also MFin gonna set me back financially.
Note that the fund is 12 years old with founders from top tier banks with decent to good returns. This is not a start up place.
What you think?
Sincerely Yours, Nijikon
12 yrs, 500mn, asia based... a fx fund in SG.
Ok, now I've heard everything. A physics PhD doesn't think he's a quant?
Switching from Quant to S&T (Originally Posted: 04/28/2010)
So I hope you can help me figure out where I can fit in: I am doing a summer internship as a quant associate. Now lets say I really enjoy the internship i'll apply for quant associate full time at this/another bank. However, what if I hate the quant life and want to switch in to S&T. With what pool should I apply? With the trading associates or the analysts? I hear if you apply as a trading associate you better have an MBA but i only have an masters.
Thanks.
Depends on where your masters is from, if its from one of the top five M Fins then you can go into the associate pool.
The difference is if you apply to the analyst pool you'll get to (or have to if you've done it already) go through training that firms force on new FT for the first month or so of employment, sometimes longer.
BUT as an analyst you'll still be feeling out desks, and probably have great mobility.
For the bank the internship is at: they may not let you demote yourself to analyst for an FT.
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