Q&A: Undergraduate -> Quantitative Trading Decision Process (Advice)
Hello Everyone! I just went through 3 long years of internships to go from being completely clueless about finance to learning the industry and landing a competitive job. Along the way, I got a lot of help from this platform and I want to pay that forward, so I’m doing an Q&A. ####About me: From rural midwest with no connection to finance, went out to target school (HYPS) for undergrad and studied stem. Halfway through school, decided I wanted to do finance and did a rotational internship at a top investment bank which was an opportunity afforded to me basically just because I had a high GPA (3.8) from a target. No networking, literally just applied to a bunch of finance roles junior year. I did an internship last summer at a top quant shop, got a return offer for $300k Total Comp but decided not to go back, but spent this fall (senior year) recruiting for a bunch of quant hedge funds/prop shops. Throughout this fall I got offers from:, Five Rings, , Two Sigma, , HAP Capital, XR Trading, Anonymous, . Generally speaking, Total Year 1 Comp was 200-300k, and those companies are in ascending order in terms of Total Comp. (When I say total comp, I’m including Salary and Expected Bonus and excluded sign on bonus. Most firms would give me a bonus range like 100-150k, and I would assume slightly low end to be the average, 115k in this case.) The one listed as anonymous is the offer I accepted. ####Things I considered when picking industry/firm: 1. Comp 2. Culture 3. Location 4. Hours I decided to go into trading instead of or PE mostly for hours. Working at a trading firm is going to cost you 55-60 hrs/week. IBD and PE, you’re looking at like 20+ additional hours per week. And despite this, pay in trading is as much or more. I decided to instead of think the work is more interested and the pay is a lot more. (Pay to go sell-side as a quant is about half of what it is on the buy side.) Finally, I want to note that recruiting for one of these spots is far from impossible. In general it does not require connections or intense networking. It doesn’t even necessarily require huge amounts of coding knowledge. ####A normal Full Time interview process would look like: 1) Call with HR (80+% pass rate) 2: One of the following three options. a) A call with a trader who asks you probability questions and presents you with a game that you need to solve for an optimal strategy. (Often times these are poker or dice games.) This is the most common, and the least difficult. Just speak out loud in what your approach to the question is and how you’re thinking and show you know how to think about expected value and probability. You don’t not need to know complex math or programming for this b) HackerRank: timed coding exam. These can be very difficult, and I failed half of the ones I had to do. c) Coding assignment: they would send some file with an assignment that you need to complete in python or C++, usually pretty basic and might take something like 2-6 hours. 3) On site interview where you meet with 3 traders and they ask you probability . I want to stress: YOU DO NOT NEED TO KNOW COMPLEX MATH OR PROGRAMMING TO GET A JOB IN THE INDUSTRY right out of undergrad. If you have a firm grasp of Expected Value/probability, and don’t know the first thing about Machine Learning that is fine. In fact, you would probably earn more than the machine learning guys and gals.