College major for sales and trading (& is trading dead??)

Hi I am currently a college student and I am definetly interested in trading. I'm not sure exactly where I want to work but would it be better to double major in finance and computer science with a minor in math, or double major in finance and econ with a minor in math? Thanks

Mod Edit: Good discussion below... Is trading dead?

 
Edmundo Braverman:
Dude, c'mon. Do they publish a newspaper within 100 miles of where you live?

There is no more prop trading at banks. Why would you spend your time, money and effort to get into a dying business? I'm not trying to be negative (trading was VERY good to me), but go find something else to do. You'll thank me 20 years from now.

What about prop trading at a prop firm, EB?

 
mfoste1:
word.......get into agri-business. If i had to do it over, thats what i would do
I m choosing a position btw a heavy machine agri company and big four financial service consulting... which one should I go with?
 
Walkerr:
Agri-business; how do you get in that? And I am assuming your talking about setting up your own business in it mfoste?

corporate farming, biofuel development, physical commodities, etc......I believe the demand for higher educated employees(sciences, maths, economics) in these types of ventures is going to explode in the next ten years.

 

Yea, trading isn't dead, it has just moved locations.

The combo with computer science offers you another perspective, where as econ and finance are similar and will have overlap. Just something to consider.

"I'm short your house"
 

Sure, there will always be trading at prop shops. But as we move closer to 90%+ of daily volume being algo HFT, why would you willingly set yourself up to compete for fewer jobs and lower compensation?

If you're already in the business that's one thing - make the best of it. But if you're still in college figuring out what you want to do for a living, find something with better long term upside.

My career path is a great example (or cautionary tale, depending upon your point of view). When I started as a stockbroker in 1992, the average broker made $118,000 a year. At the time, that was something worth going to college for (or even better, not going to college and still landing the job like I did). Fast forward a couple of years and computers have made the job obsolete. Today you're better off managing a Taco Bell than being a stockbroker.

The same thing could happen to the trading profession over the next 10 years. Why would you take a chance like that (and run up ungodly student loan debt in the process) just to find out that you can't beat the machines?

 
Edmundo Braverman:
Sure, there will always be trading at prop shops. But as we move closer to 90%+ of daily volume being algo HFT, why would you willingly set yourself up to compete for fewer jobs and lower compensation?

If you're already in the business that's one thing - make the best of it. But if you're still in college figuring out what you want to do for a living, find something with better long term upside.

My career path is a great example (or cautionary tale, depending upon your point of view). When I started as a stockbroker in 1992, the average broker made $118,000 a year. At the time, that was something worth going to college for (or even better, not going to college and still landing the job like I did). Fast forward a couple of years and computers have made the job obsolete. Today you're better off managing a Taco Bell than being a stockbroker.

The same thing could happen to the trading profession over the next 10 years. Why would you take a chance like that (and run up ungodly student loan debt in the process) just to find out that you can't beat the machines?

So IB is dead eddie? or just trading....

 
wallstreetballa:
Edmundo Braverman:
Sure, there will always be trading at prop shops. But as we move closer to 90%+ of daily volume being algo HFT, why would you willingly set yourself up to compete for fewer jobs and lower compensation?

If you're already in the business that's one thing - make the best of it. But if you're still in college figuring out what you want to do for a living, find something with better long term upside.

My career path is a great example (or cautionary tale, depending upon your point of view). When I started as a stockbroker in 1992, the average broker made $118,000 a year. At the time, that was something worth going to college for (or even better, not going to college and still landing the job like I did). Fast forward a couple of years and computers have made the job obsolete. Today you're better off managing a Taco Bell than being a stockbroker.

The same thing could happen to the trading profession over the next 10 years. Why would you take a chance like that (and run up ungodly student loan debt in the process) just to find out that you can't beat the machines?

So IB is dead eddie? or just trading....

The investment banking business is certainly changing - and contracting - but it's far from dead. And when it comes to S&T there will always be opportunities on the "S" side of the house. Let's face it: we're selling air and that takes gifted salesmen.

But the profession of trading has been going through profound changes for the past four decades. It worked pretty much the same way for centuries, but started to change around 1970. With the advent of the OTC market (which eventually became the NASDAQ), investors suddenly had an alternative to the pen-and-ink specialists on the NYSE and AMEX. The aftermath of Black Monday in 1987 brought the SOES online so traders could execute small orders without speaking to anyone. The rise of the discount broker in the early 1990's challenged the notion that stockbrokers were omniscient and were irreplaceable conduits to stocks and bonds. The Internet further eliminated the need for a broker interface. Quoted prices converting from fractions to decimals further tightened spreads and cost traders profits and some their jobs. Further automation all but eliminated open outcry trading, which was the dominant form of futures trading until 2003 or so. The rise of HFT, the quants, and algo trading in general has choked out even the minutest arbitrage opportunities. And now we have Dodd Frank.

So to the OP: do yourself a favor and study something else, kid. The first thing a successful trader learns is that the trend is your friend. And the trend on a career in trading is pretty dismal. Don't try to catch a falling knife.

 
andrewd17:
Hi I am currently a college student and I am definetly interested in trading. I'm not sure exactly where I want to work but would it be better to double major in finance and computer science with a minor in math, or double major in finance and econ with a minor in math?

Thanks

Computer science with math, easily. Do well and you can a job either inside or outside wall street.

 
blastoise:
I don't understand why you can't beat machines.

I no understand why you no put in toby gerhart and kellew winslow to beat blackfinancier

I no understand why you no put in toby gerhart and kellew winslow to beat blackfinancier

I no understand why you no put in toby gerhart and kellew winslow to beat blackfinancier

 

Eddie, your comments are mostly about Equities, right? I've talked to S&T people at several places and the consensus is that the jobs in FICC (especially exotic products) are not going to be threatened by algos for the foreseeable future. Correct me if I'm wrong, but my understanding is that even though volume is down recently, sell-side trading especially in less liquid products is still very lucrative and comparable comp-wise to almost any other gig besides killing it at a HF.

 
houseofcards:
Eddie, your comments are mostly about Equities, right? I've talked to S&T people at several places and the consensus is that the jobs in FICC (especially exotic products) are not going to be threatened by algos for the foreseeable future. Correct me if I'm wrong, but my understanding is that even though volume is down recently, sell-side trading especially in less liquid products is still very lucrative and comparable comp-wise to almost any other gig besides killing it at a HF.

You're correct. We've discussed this many many times before. trading at sell-side firms is more than just market making in highly liquid equity products and flow FICC products. Algos are used to enhance the speed and efficiency of trading.... but if your product area requires neither, then you're in a pretty solid spot.

This is the main reason the Volcker rule has been watered down so much... At the end of the day, its pretty easy to flatten a Treasury book or a cash equity book.... do you think its possible to flatten a complex correlation book with dozens upon dozens of moving parts? hardly... hence the reason its necessary to run some 'proprietary' positions when making markets in these less liquid instruments.

 
houseofcards:
Eddie, your comments are mostly about Equities, right? I've talked to S&T people at several places and the consensus is that the jobs in FICC (especially exotic products) are not going to be threatened by algos for the foreseeable future. Correct me if I'm wrong, but my understanding is that even though volume is down recently, sell-side trading especially in less liquid products is still very lucrative and comparable comp-wise to almost any other gig besides killing it at a HF.

This is true, but I know of several startups that are trying really hard to change that. Less so for exotic products, but for anything consistently trading, people are trying to bring the automation in, and the costs down. If you are creating custom swaps for institutions, you will probably be alright for awhile... but who knows what that area is going to look like in 10 years. If you are just selling bonds... I'd start getting a bit more interested in what IT is up to these days and hope to ride the top of that wave, rather than get sucked under it, like so many equity and option traders.

 

I heard a couple interviewers say this: The best S&T guy they could hire is a West Point Engineering Grad who plays a college sport

West Point -> military -> leadership Engineering -> Quant skills Sports -> competitive

 

There was a recent thread about recommended majors for S&T. Accounting isn't really useful for trading, but it is for IB. Accounting is about financial statements/reporting (or tax), concepts of limited use in trading, which is all about the markets and specific products you trade. Also, it isn't exactly a "quantitative" major, and its rules/regulation focus does not really help you think like a trader. Even within finance, only the capital markets side (fixed income, derivatives, international finance, etc.) is actually relevant. The corporate finance side (valuation, capital budgeting, capital structure theory, etc.) is not. I know kids who majored in both finance and accounting that ended up in trading (they also interviewed for IB), but I would say an accounting major in general would have a tougher time convincing interviewers of their interest in the markets and/or their quantitative skills, compared to AlphaGeneration's list.

 

Alpha Generation's list is quite accurate. But majors don't matter that much in my opinion esp in Sales, there's a lot more to learn on the job. English majors have made it on the street! By the way, I just want to give you guys a heads up about a new website on trading strategies/financial talk. For those interested, it is www.moneyhawker.com.

 

I would venture to say that to some extent in S&T it doesn't matter. I've met plenty of great S&T guys who were History or English majors at good liberal arts schools. S&T is about knowing your clients and knowing your product, most of which occurs on the job. Just be an effective communicator.

 

Trading is not about majors, it's about personality and connection. Some experience in the battlefield might be useful. For the majors, I recommend statistics+history/philosophy. But again, anything that can be learned from ordinary universities is notthat important.

 
levelworm:
Trading is not about majors, it's about personality and connection. Some experience in the battlefield might be useful. For the majors, I recommend statistics+history/philosophy. But again, anything that can be learned from ordinary universities is notthat important.

Why philosophy? How do you tie that into trading?

 
Inception:
I'd say Engineering (preferably CS) and Finance (or Economics if your school doesn't do Finance) w/ a math minor (might as well...BS Engineering will get you through most the math for a minor).

How about industrial Engineering or Operations management?

 
FutureQuant:
Isn't statistics already an "applied" field?

Applied math is essentially physics without the science. At least the applied math you'll be getting at a legitimate program. Statistics is usually something you'd pursue at the graduate level after you've built a solid foundation in math, not a weekend bootcamp with excel.

 

I am assuming you are still early enough in college to change your major, and therefore not applying for jobs soon. Those are all good majors.

CS and math will also help you no matter what you choose to do after college, and leave you a lot more open for career changes later on. S&T only cares that you're a good quant with the ability to work hard and think critically. You can show all of those with CS if you also do some leadership abilities.

 
DoWellByDoingGood:
I am assuming you are still early enough in college to change your major, and therefore not applying for jobs soon. Those are all good majors.

CS and math will also help you no matter what you choose to do after college, and leave you a lot more open for career changes later on. S&T only cares that you're a good quant with the ability to work hard and think critically. You can show all of those with CS if you also do some leadership abilities.

CS has changed a lot in the past 5 years. Having a business-oriented or people-oriented personality no longer makes you unique. Ironically, the folks with asperger's have all moved into trading of all places while the personable folks are more into startups and pure tech roles.
 

State school/Private Engineering School: CS or Engineering, including ORFE.

Ivy League ex Cornell (their engineering program is too strong): Art History, Comparative Literature, maybe Econ, and join the lacrosse team. Every year, banks hire lots of lacrosse players with 95 IQs from schools like Brown and Dartmouth. I have no idea how that works, why they do it, or how said lacrosse players even get into Brown and Dartmouth. I just know that it's very easy for a dumb lacrosse player who managed to eke out an Ivy League degree in something utterly useless to get hired by a bank.

The margin for error is a lot less than you would think on choosing Econ or Applied Math at a private school. If you get a 3.0 and have start recruiting with F500 firms because the banks won't take you, nobody really knows the difference between a Princeton Econ degree or a UIUC econ degree, or the difference in the curve. (Although for the record both programs have brilliant students). In engineering, a 3.0 is a lot more understandable. If you graduate from a reputable school with a 3.0 GPA, that sets a floor under your employability.

 
IlliniProgrammer:
State school/Private Engineering School: CS or Engineering, including ORFE.

Ivy League ex Cornell (their engineering program is too strong): Art History, Comparative Literature, maybe Econ, and join the lacrosse team. Every year, banks hire lots of lacrosse players with 95 IQs from schools like Brown and Dartmouth. I have no idea how that works, why they do it, or how said lacrosse players even get into Brown and Dartmouth. I just know that it's very easy for a dumb lacrosse player who managed to eke out an Ivy League degree in something utterly useless to get hired by a bank.

The margin for error is a lot less than you would think on choosing Econ or Applied Math at a private school. If you get a 3.0 and have start recruiting with F500 firms because the banks won't take you, nobody really knows the difference between a Princeton Econ degree or a UIUC econ degree, or the difference in the curve. (Although for the record both programs have brilliant students). In engineering, a 3.0 is a lot more understandable. If you graduate from a reputable school with a 3.0 GPA, that sets a floor under your employability.

95 IQ at Ivy League schools? I take it you don't know how the Ivy recruiting process works.

The average SAT score of the lacrosse team at my HYP school was above 1450 for my entire time there, and well within the meaty part of the school's range.

 

@holla_back: Things may be changing then. I recently attended a high school where 10+ students were lacrosse recruits to schools like UNC, Berkeley, Duke, Cornell, Brown etc. All failed to achieve SATs above 1800.

"I get paid to be suspicious when I got nothing to be suspicious about." ~ Bill DeVasher (The Firm)
 
arodgt:
@holla_back: Things may be changing then. I recently attended a high school where 10+ students were lacrosse recruits to schools like UNC, Berkeley, Duke, Cornell, Brown etc. All failed to achieve SATs above 1800.

Berkeley does not have a lacrosse team, which makes me doubt your entire post (unless you're talking about women). Neither UNC nor Duke are Ivy League schools, and have a bit more leeway with athlete admissions.

Brown and Cornell, however, are forced to follow Ivy League rules -- if these kids had SAT scores that low (which I highly doubt), they would most certainly be in the minority (especially for a sport like lacrosse), and would need a few kids in their recruit class with SATs close to 1600 (2400 to you kids) to even things out. Lacrosse players are often some of the smartest recruited athletes, since basically everyone but the Upstate and LI kids tends to come from well-to-do schools/neighborhoods in the Northeast.

Also note that even someone with an SAT score of 1250 or so (I've never seen anyone who wasn't a national top 25 player recruited with scores this low) has an IQ that is well, well above the national average.

 

Berkeley recruit was for women's lacrosse. Fair points on Duke and UNC. I may be incorrect about my Ivy statistics. I have access to college admission information for my high school and I see a plethora of acceptances under 1800 SAT and below 3.5 GPA. I only assumed these were the athletes, I may very well be wrong.

"I get paid to be suspicious when I got nothing to be suspicious about." ~ Bill DeVasher (The Firm)
 

UPDATE: I got accepted to Carnegie Mellon and will be going there next year. I want to major in computational finance, but only 10 people are allowed to major in it each year. If I can't study comp. finance, I'll probably major in Operations Research and Statistics (which is a concentration in the math program at CMU). Here are my options for majors:

Computational Finance and CS (very, very difficult given that both of these majors are quite rigorous) Computational Finance and Math (w/ concentration in OR and Stat) Math (w/ concentration in OR and Stat) and Business w/ a minor in comp. finance Math (w/ concentration in OR and Stat) and CS w/ a minor in comp. finance

Which one of these options would be the best if I want to apply for S&T? Just so you know, I actually like all of the majors I've listed. I just want to know which combination would be optimal.

 

CMU has a reputation for mostly one discipline: CS (maybe also engineering.)

If you couldn't do trading, what profession would you want to be in? What job would you enjoy?

Would you enjoy sitting in front of a computer screen 10 hours a day tracking down bugs in other peoples' code, and doing that 5 1/2 days a week, 50 weeks/year for three years after you graduate?

If not, don't do CS.

 

If I didn't do trading, I'd go into IBD, Financial Engineering, Capital Markets, or Equity Research. I'm 100% sure that I want to work in the field of finance, so I've never thought of having a job in CS.

Also, CMU is ranked #1 in Computational Finance at the graduate level. The undergrad comp. finance program (BSCF) isn't that well known, but it absolutely KILLS with recruiters. BSCF grads have earned 100% placement in the past five years and most graduates work at BB's or top prop firms.

As for CS, I just want to know whether a CS skill-set is sometime that S&T recruiters would prefer. Otherwise, I'll just do my 2nd major in business.

 

Then you may want to pursue ORFE. CMU has a very good engineering reputation too, though it is strongest in Comp Sci.

If the finance game does continue to shut down over the next four years, ORFE will give you a lot of IBD or Research-like backup jobs at the F500. Everyone needs folks to manage logistics, and ORFE would give you an excellent background for it that would involve less (though still moderate) coding.

I think ORFE gives you the most options here for what you would enjoy. If you're telling me you don't enjoy coding, don't do CS.

I enjoy coding. I enjoy finance even more. I didn't always enjoy my work as a programmer when I had to grind out code, fix other peoples' bugs, and solve problems at 3AM. The fact that I ENJOYED coding, however, made it workable.

Also, CMU is ranked #1 in Computational Finance at the graduate level. The undergrad comp. finance program (BSCF) isn't that well known, but it absolutely KILLS with recruiters. BSCF grads have earned 100% placement in the past five years and most graduates work at BB's or top prop firms.
You do have to be a little careful here. Not everyone at a major bank, even hedge fund or prop shop has a great, high-paying job. Coders at Google earn more money than many risk managers do.

The question is where were they getting hired into? Were they working in algo trading or on the accounting system? One guy has a great job (though with some job insecurity), the other guy is wishing he was at IBM.

 

CMU publishes yearly tables that list where students from every major ended up (the lists include both jobs and grad schools). Based on these tables, it appears that most of the BSCF grads went into S&T roles at prestigious BB's. The remaining graduates went into algo trading positions at top prop firms (like Susquehanna Trading) or Quantitative Analyst roles at BB's. The placements seem pretty good IMO.

Also, I actually do enjoy writing code. I don't want to do coding as part of my job, however, unless that job is in the finance industry. In other words, I enjoy finance more than I enjoy programming, but I do like both subjects.

 
FutureQuant:
CMU publishes yearly tables that list where students from every major ended up (the lists include both jobs and grad schools). Based on these tables, it appears that most of the BSCF grads went into S&T roles at prestigious BB's. The remaining graduates went into algo trading positions at top prop firms (like Susquehanna Trading) or Quantitative Analyst roles at BB's. The placements seem pretty good IMO.
I have met a number of quantitative developers from CMU, including a few with CF backgrounds. I have met fewer working in HFT or other trading roles; nearly every CMU CS grad I have met is very bright, however.

This is not a rub at CMU's BSCF program (which I suspect may be the victim of some self-propaganda) but a rub at the notion that you will certainly get into the front office by method X, Y, or Z. It's an unknown until junior year.

Also, I actually do enjoy writing code. I don't want to do coding as part of my job, however, unless that job is in the finance industry. In other words, I enjoy finance more than I enjoy programming, but I do like both subjects.
Well, that's why they call it work, and traders have similarly grinding jobs, perhaps even worse. Bear in mind that what traders do- at least as broker-dealers or in HFT- looks very little like finance as taught in school. I don't think anyone ever used MPT or CAPM in trading and nobody is worried about accruals except maybe whether to exercise call options before a stock goes ex-dividend.
 

I would go with finance/CS and math any day of the week. It's going to be hard as hell, and your gpa may suffer, but this is the trifecta that is the future, and if I had to go to school again, its exactly what I would do (CS/Physics major w/ math/electronics minor). Get yourself on the business side of an electronic trading group, and you will be sleeping like a baby compared to most equity traders out there.

I may be biased, but I have been in electronic trading for almost 10 years now... and even through the downturn my area has expanded. Through about 2006, my semi-unstated job was to put traders out of a job by automating them. It changed focus after that only because there was hardly anyone left to put out of a job, and the race to the bottom that is zero latency had started, and still continues.

Besides, even if you don't make it into an IB, or the role you want, the CS degree is going to make you a lot more employable than an econ degree, which will just allow you to theorize on the reasons you don't have a job. Sell the machines, don't get sold out by the machines!

 

You'll have an advantage if you have very strong math/stats skills plus some programming ability in Java/C++/Python (pick one or two) combined with some strong finance knowledge.

Have told a few others this before...maybe go after the Math/CS double, or at least one, but pick up programming if you can and spend some time learning the actual finance knowledge too if you can. There's really a lot you can learn with a few extra hours a week of reading.

The mentality now in just about all the decent shops is that they'd rather have someone who can handle the math/programming right out of the box, since they can teach you the finance stuff quickly and easily. If you have both (all three, I guess) then you're going to stand apart.

"When you stop striving for perfection, you might as well be dead."
 

Thanks guys. So if both traders and quants need the math/programming background, how do you position yourself to become a trader? What experience/courses are they looking for when they choose between the two roles? Right now I'm getting the sense that the skills and qualifications are very similar, but I have zero interest in being a quant.

 

If you have to pick one, pick math without a question. Unless you take lots of the advanced econometrics classes, econ is about as bland as a finance degree. In regards to the double major in math and CS, if you're looking at Jane Street and Jump, they place a huge value on programming skills so the double here would be worth it. When you say you want to focus only on equity derivatives, do you have any particular reasoning behind this? Do you want to be in a market making role? How far along are you in school and how much time/effort would the double major require?

 
econometricks:

If you have to pick one, pick math without a question. Unless you take lots of the advanced econometrics classes, econ is about as bland as a finance degree. In regards to the double major in math and CS, if you're looking at Jane Street and Jump, they place a huge value on programming skills so the double here would be worth it. When you say you want to focus only on equity derivatives, do you have any particular reasoning behind this? Do you want to be in a market making role? How far along are you in school and how much time/effort would the double major require?

Equity derivatives would be my preferred product at a bank because they're a popular product with prop firm, and I feel the experience could make the transition easier. If I'm at a prop firm already, I don't really care what product I'm trading, although from what I've gathered most mainly do equity derivatives anyways, and I'm interested in those.

To be honest, I'm still not too sure about the clear difference between market makers and prop firms, but if by MM you mean like at a designated market maker like KCG then I'd definitely like to do that as well.

I'm a third-year but because I'm changing majors I'll be at least a semester late if not a full year (so technically sophomore). Doubling Econ/Math is doable but still a crunch in that time frame (Econ minor is easy). CS is pretty much out of the question since the degree requires a lot more specialized credits than the other two majors. However I have some programming experience and am taking CS classes to improve them.

 

If it's the sell-side, you can afford a relatively non-quant major like econ (I'll be a sell-side equity derivatives trader myself and my only somewhat quanty thing is a minor). For the props/HFs though, there's definitely more of a premium on STEM so if you can be successful at that, I'd recommend it.

 

While you can still get offers with an econ degree, having a math degree will be better in every situation (assuming you can still do well in upper level math courses). Since this horse has been beaten to death, I would also like to echo what others have said and reiterate that equities definitely isn't the only way to go. Options market making in commodities, currencies, etc. are all great routes to pursue and are the bread and butter of lots of the 'top' firms frequently discussed on these forums. The bottom line is, if you are trying to optimize your chances of getting a spot at in trading, don't focus on just one area in the field and you'll have more places to apply to. The more places you apply, the better your odds are of getting in someplace (in addition to the fact that you'll get better at interviewing).

 

I'm definitely open to whatever product I can get, the reason I said equities was because many of the BBs I applied to required me to specify which product I wanted to trade and I figured that was the closest to the prop shops.

For coding, what particular skills are important? I'm currently learning Python and will move to VBA after I build a solid base. What areas of CS will they be looking for?

Again to reiterate, I want to be a trader and not a developer/researcher.

 
chobani:

Again to reiterate, I want to be a trader and not a developer/researcher.

Your mindset is too narrow to be hired at some of these places, especially the Jane Street and Jump tier.

Do you think traders somehow don't do research? Do you think quants and strategists just hand a magic black box to the traders who trade off the numbers it spits out? Traders at all the good firms worth their salt spend time researching and improving their business.

 

There are also some pretty nice option mm firms like CTC/Optiver. Small prop firms tend to have more options mm. Those require less programming skills but they love ppl that have great math skills.

 

andrewd17:
Hi I am currently a college student and I am definetly interested in trading. I'm not sure exactly where I want to work but would it be better to double major in finance and computer science with a minor in math, or double major in finance and econ with a minor in math? Thanks

Mod Edit: Good discussion below... Is trading dead?

Finance is general is dying...fuck the finance degree and major in CS. Developing=the new money maker (like banking was, but with half the required hours).

My drinkin' problem left today, she packed up all her bags and walked away.
 

I'd say it doesn't really matter in your case because both choices are pretty quantitative. I'd go for the computing and financial management degree since it gives exposure to CS and finance.

But from my experience networking, I've seen everything from Renaissance history majors (sales) to PhDs in Astrophysics (quants). Then you have the regular engineering/CS/math/econ majors who make up a majority of traders. I'm not saying you have to have the aforementioned degrees though.

 

I think the same but would computing and financial management be less preferred by employers because it is less "quant"? I love the idea of learning finance courses in depth in school but people are saying finance courses are not just worth learning at school and if you are interested in them you should be already learning them on your own? Because it is half CS and half Finance.. and I personally think it is a really good combination but lacks a little math related knowledge. That's why I am taking upper math courses for 3~4 electives but I don't plan on extending my school life just for another math minor..

 

Math and computer science. Also, learn how to spell definitely. This site also has a spell checker....

"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.
 

I don't think there is any difference to be honest. As long as you have very good grades your major is irrelevant. Your school however may cause an issue. I would network ASAP with as many people as possible. I go to a pretty good private school but its not a target and I had to bust my ass just to get an interview at a BB.

 
futurectdoc:
Network then, does CS actually interest you?
Networking isn't much of a problem for me because I already have a lot of good connections, obviously i will need to network more but it isn't going to be as hard for me as the guys who cold email for 6months straight. I don't know whether or not it is safe to say I am interested in CS. I have been doing stuff on codeacademy for fun lately and I really enjoy doing it. I love it a lot. I like being able to make programs to solve my problems. However I do realize that CS education is often boring and repetitive at times when learning it at a university level. I like it non structured on my own time but I can see how I'd hate it if it were in school.

For that though I'll have to just see. I think I like it enough for it to be good for me.

 
Macro Arbitrage:
There's one key issue has yet to be addressed: It is more than likely that a significant portion of software development work will be outsourced to India and China.

It depends on what you are working on. This will likely improve over time, but the quality of Indian workers is not that great. Its not that they don't try, its just that they are usually far behind in learning the business compared to other regions. The high paying jobs where you sit on a desk will likely always still be in the major financial centers. Most banks seem to be drawing the outsourcing line at lower down the chain tech-only jobs like supporting servers, and some light web work. I don't think you are ever going to see risk management and algo trading moved outside of the major centers like London, Hong Kong, Tokyo and NY. And the really good guys that I have seen work from India... get paid somewhat on par with guys in other regions. The spread is big, but its not like they are working for pennies on the dollar.

I was scared of outsourcing around 2003, I am not scared of it any longer.

 

I knew a history major at one of those schools who ended up receiving a FT offer this year. That said, it's difficult to predict what will happen in 3-4 years time, and honestly, the way things are moving towards computers/algos, I think your safest bet would be with an engineering or math background. Whereas it might not be impossible in 3 years to break in with a liberal arts degree, the engineering degree will DEFINITELY not hold you back from anything, and in all likelihood would be a great help.

 
Macro <span class=keyword_link><a href=/resources/skills/trading-investing/arbitrage target=_blank>Arbitrage</a></span>:
There's one key issue has yet to be addressed: It is more than likely that a significant portion of software development work will be outsourced to India and China.
Depends on the kind of development work you are talking about. If you mean the repetitive and well-defined requirement development tasks that get out-sourced to companies like Infosys (INFY), then yes. If you mean innovative, game-changing, high-growth developments then no. The area is analogous to what EB is talking about with sales and trading though. A lot of the development work that goes on in India and China could soon be made redundant by better tooling and technologies.

The Indian and Chinese markets are growing because they have a very low cost of capital, not because they have high innovation. This is what the US still does well. It's also what a lot of the guys in Zucotti Park don't understand.

 

If your schools program resembles mine, and you are looking for the quant approach, just do a BS in economics. That's what I did and it leaves me within a stones throw of not on a statistics degree but also a mathematics degree. I decided to focus my BS on the statistics side because I have zero interest in exploring the math quant aspect of finance. It is also what grad schools like.

"I'm short your house"
 

W. Beach your comment makes little sense to me.

Why would you study statistics if you have little interest in the quant aspect of finance? And in no way is a BS in economics a "stones throw" from a mathematics degree. You most likely were not required to take any proof driven classes, and any pure theory classes. Yes, you could have taken them on your own, but an economics degree on its own is far from a pure math degree.

For trading, or any industry for that matter, you shouldn't look at your major by itself, but how it fits together with your experience, internships and skills. For example, having two excellent internships in IB at BBs during your college career would pair nicely with econ obviously, but it would also pair well with something more quant oriented such as physics or math. It shows that you are smart, have heavy quant skills and squashes any fear that you are a nerd who could not handle client interactions.

Think of what experiences you want to have over the course of your college career that would go on your resume (maybe an S&T internship), and use your major to strengthen gaps that will make you a well rounded person, such as a few programing classes if your weak in that department, or maybe statistics courses etc. You want to develop a combined package that says you have a strong math skill set, an interest in finance, and sociable. Finally this will all serve to enhance your chances of getting an interview. After that, you are judged on your performance in your interview. No one is going to pick you over a candidate who performed better in an interview because you have a more quantitative major.

 

This has been discussed quite extensively. Major in Economics or Finance, take a few proof-based mathematics and statistics classes (ones targeted towards math majors), three to five computer science classes and perhaps major or minor in math, stats or compsci. You'd be a competitive candidate for most MFE's if you take the right math + stats classes and excel in them.

 

So I'm actually starting out as a trading analyst on a vanilla equity options desk (we make markets, but also trade based on order flow/fundamentals). My desk has been doing quite well, but if I stay on my desk for another 5 years (at which point I think electronic trading may start to significantly erode our profitability), what other fields could I switch over to (assuming a good PnL up until that point)? My impression is that a lot of the senior equity option traders leave for hedge funds, where they would be making more directional/fundamental bets (and not necessarily changing markets by reacting to order flow, which will probably be all algo in 5ish years). Those jobs should be relatively safe, right? What are other exit ops for vanilla equity option traders? Things that come to mind are risk management and working at pension funds/endowments.

Any thoughts?

 

Your degree should give some indication of quantitative aptitude something like Math/Phys/CS just to land the first interview. CS is highly recommended, however I know that not everyone wants to be a coder and that's perfectly fine. You will need some knowledge of Statistics and Finance, but you don't need to major in it to prove you know it, just take some classes on the side.

 

I would go with Finance & Computer Science. CS is extremely important right now and I wish I had done Finance/CS instead of Finance+Accounting.

As for statistics, just take some classes or try and pick up a minor. I'm minoring in Probability and Statistics and our minor program covers basically all the stats you need for trading. If you actually major in it my guess is you will have to take a lot of pure math shit that you really have no reason to take. Just do finance/cs and take your school's equivalent of intermediate stats, theoretical probability, stochastic processes and linear regression/time series analysis. If you understand probability theory, brownian motion, and how to interpret/explain linear regression outputs then you probably know enough.

Also, and this is something a lot of people overlook, your GPA will probably be higher if you do finance/CS

 

The interviews for Jane Street, SIG, etc. were basically word problems and probability stuff (basic Bayes theorem) that you could look up online. If you wanted to work in prop trading as long as you have compsci they will fight to have you. One of my first interviews this year was at a prop firm who gave me a compsci "test" asking me to write out a program. (not fun)

Incoming Spring Discovery Day Participant at J.P. Morgan Stanley
 
DukeMonk:

The interviews for Jane Street, SIG, etc. were basically word problems and probability stuff (basic Bayes theorem) that you could look up online. If you wanted to work in prop trading as long as you have compsci they will fight to have you. One of my first interviews this year was at a prop firm who gave me a compsci "test" asking me to write out a program. (not fun)

For the brainteasers/puzzles, what classes can help you understand the underlying theory/logic? For example:

I'm thinking of a 10-digit number, where each digit represents the number of that ordinal number in the whole number. So, the first digit represents the number of 0's in the whole 10 digits. The second digit represents the number of 1's in the whole 10 digits. And so on. The first digit is not a '0.' What is my number.

Someone mentioned discrete math, number theory, etc.

 
Best Response

I'll say the cliche answer: your major should not have that much of an impact. If anything, you should study something you truly enjoy. You can be a history, English, or philosophy major and still land a job by proving you're quantitatively and technically adept - there are many ways to go about this.

Now if the above wasn't helpful, here's my actual answer to your question. I would recommend the latter option since it provides you a more practical skillset. You'll find that majority of trading jobs don't require a finance background. They want to see how teachable you are rather than how much you can look up in a book. That being said, I would think that a finance major would be "easier" than a statistics major as someone mentioned, having a solid GPA is an important factor.

tldr; not a decisive choice. You should pick what you feel is best for you.

"Luck is what happens when preparation meets opportunity"
 

major lols at choosing a major for probability brainteasers.

For the original question, depends what trading route you are thinking. People on here act like compsci is the be all end all for trading. For BBs its really not. Now dont get me wrong I think its a very useful major in general, but id almost argue an accoutning minor is just as useful (having an accounting base helps a lot for any sort of fundamental analysis).

 

If you really want to study just for a career in S&T, go with one that makes you good at coding. That makes computer science and engineering especially attractive, and it shows on how many new hires have this type of background.

With that said, people in S&T have wide range of backgrounds. Most desks don't require you to be a math/coding wiz, so you would see people coming from business schools, econ, arts, etc.....

 
PP34:

If you really want to study just for a career in S&T, go with one that makes you good at coding. That makes computer science and engineering especially attractive, and it shows on how many new hires have this type of background.

With that said, people in S&T have wide range of backgrounds. Most desks don't require you to be a math/coding wiz, so you would see people coming from business schools, econ, arts, etc.....

The two parts of your post dont align.

Again, CS is really not a must for BB S&T (or ability to coding). I mean dont get me wrong id still take it because ultimately tech is where its at now, but not for BB S&T (unless talking about prop shops which is a different story).

You could actually make the argumetn that CS could hurt you at a BB because in any rotation system where HR gets a say they will see CS and place you on a CS heavy desk. Obviously this isnt the strongest of arguments against CS but just saying ive seen something like this happen.

 

Guys, of course you're going to find product groups that are exceptions to what I said in general. But as a college student do you really want to aim at a moving target and hope to hit some exotic product group that feeds less than a thousand traders worldwide in a field where opportunities are growing fewer and further between?

My advice to the OP (and anyone who isn't already in the business) is to make life easier on yourself and get into a growing field where your livelihood isn't threatened daily by automation.

@someotherguy brought up the race for zero latency, and traders are some of the most latent motherfuckers you're ever likely to encounter. Zero latency = the death of human trading for the most part.

 
Edmundo Braverman:
Guys, of course you're going to find product groups that are exceptions to what I said in general. But as a college student do you really want to aim at a moving target and hope to hit some exotic product group that feeds less than a thousand traders worldwide in a field where opportunities are growing fewer and further between?

My advice to the OP (and anyone who isn't already in the business) is to make life easier on yourself and get into a growing field where your livelihood isn't threatened daily by automation.

@someotherguy brought up the race for zero latency, and traders are some of the most latent motherfuckers you're ever likely to encounter. Zero latency = the death of human trading for the most part.

Eddie, I am curious what industry you would consider as booming? I did double major in Finance & Mathematics. Currently, I am about to graduate from MS in Financial Mathematics. I am applying for jobs in S&T, Investment management & Research. Where else would I be looking at? THX

 
GekkotheGreat:
Eddie, I am curious what industry you would consider as booming? I did double major in Finance & Mathematics. Currently, I am about to graduate from MS in Financial Mathematics. I am applying for jobs in S&T, Investment management & Research. Where else would I be looking at? THX

Are you getting offers at this point?

 

Not yet. I am not a US citizen, which makes this recruiting season twice as hard. Had some IBD & Strategy interviews. For the division mentioned above such as IM, S&T, and Research, my school is at most a semi-target. I was told, by the recruiters, that the interviews will be during Nov, after they finish recruiting from all the targets. Hopefully, I can land a job by the end of the year.

Just realize this is your first post... welcome to WSO.

 

Are we just going to assume that the only tradign at a BB is prop trading? The statments about trading being dead is probably one of the dumbest things. You always have flow trading. Sure you can make the argument that there will be regulations on how much risk you can take etc...But thats how the industry works...regulations go up and then go down.

 
Sean518:
I'm looking at finishing my degree at Cornell because I could add an agribusiness minor to my finance major, will that give me a leg up when looking to land a gig working in the commodity markets? or will the benefit be negligible.

In short, yes. Cornell has a very very very well-established program in agribusiness and agri-economics and if you are intersted in ags it will be a good prep for interviews.

On the other hand, BB jobs in ags trading/sales are still few and far bewtween (i.e. you gotta think about your own hedge ratio) and older dudes are usually good at screening who's having the real interest & who's faking it

 
bluecoat:
Sean518:
I'm looking at finishing my degree at Cornell because I could add an agribusiness minor to my finance major, will that give me a leg up when looking to land a gig working in the commodity markets? or will the benefit be negligible.

In short, yes. Cornell has a very very very well-established program in agribusiness and agri-economics and if you are intersted in ags it will be a good prep for the roles later on.

On the other hand, BB jobs in ags trading/sales are still few and far bewtween (i.e. you gotta think about your own hedge ratio) and older dudes are usually good at screening who's having the real interest & who's faking it

 
trade4size:
Algos didnt kill equities trading they just changed the role of a trader.

If equity trading were driving a car then....

Algos = power steering

this. I am more of a sales oriented guy/PB but I have talked to many desk heads and they all say human trading will always be around--the computers are there to make their lives easier

I banana back
 
Hoogerman:
trade4size:
Algos didnt kill equities trading they just changed the role of a trader.

If equity trading were driving a car then....

Algos = power steering

this. I am more of a sales oriented guy/PB but I have talked to many desk heads and they all say human trading will always be around--the computers are there to make their lives easier

Have you had this sentiment confirmed by the people who actually write the code? Not saying the sentiment is wrong, but maybe traders just don't even know.

 
trade4size:
Algos didnt kill equities trading they just changed the role of a trader.

If equity trading were driving a car then....

Algos = power steering

Precisely.

http://talkfast.org/2011/09/13/algorithmic-trading-is-not-high-frequency-trading

"Algorithmic trading is like the GPS navigation system in your car: you tell the car your destination, and the GPS picks the route. The car generally doesn’t drive for you, and it doesn’t replace your decision of where to drive. Similarly, traders employing algorithmic trading systems pre-decide which stocks to buy or sell; they’re simply handing over the actual execution of the orders (when to trade during the day, and at what price) to the algorithm."

I strongly urge every prospective trader to read that blog post. It was in fact written by a HF Quant trader (ex-GS quant as well for you prestige whores), and it's consistent with what I've gathered from speaking to traders. The reason I wish to point this out explicitly is because I too was once overwhelmed by the dismal prospects of S&T given the proliferation of HFT and whatnot. Although it is true that most industries are undergoing significant technological acceleration and trading has quite openly welcomed this change, various aspects of a trader's decision making process cannot be automated. Just focus on what you're good at, and if you're a good trader I'm sure you can easily hire some of the best programmers. The converse might not be true.

 

Since the demise of the feudal system and land-based power, allocating capital has been at or near the apex of social occupations. The Rothschilds for instance, were some of the first truly powerful people after the US and French revolutions. The role of the trader may change, but there's always going to be a market and there will always ultimately be humans involved. It so happens that every one save for the government is deleveraging, thereby constraining the amount of capital there is to deploy and the opportunities to do so. Add to that the fact that the regulatory pendulum has started to swing and you can see why someone would think "finance is dead." Personally, I could care less how difficult it gets, speculating is what I want to do for the foreseeable future.

 

Addressing your second question.

  1. Review the draft of Volcker Rule.
  2. Prop Houses are leaving IB's and turning into HF's.
  3. These new HF's will consist of traders that sat next to each other or other banks.
  4. New HF's will need liquidity and BB's will provide liquidity.
  5. You should know the rest.

As for the other comments in here, hit the books. Trading is far from dead and any comment implying such shows a lack of research.

PS Buzz words get you nowhere except a look of death for wasting someone's time.

 

trading is far from dead. When I graduated college in 2002 people told me the same thing. Compensation for good traders has since skyrocketed...thankfully I didnt listen to that nonsense. Trading has been around for thousands of years and it isnt going anywhere anytime soon.

That said, the business is changing big-time. I dont think there are going to be as many opportunities to make easy money front-running clients at investment banks as i see more and more markets that are becoming transparent, but that is a positive for buyside traders not a negative. I welcome liquidity even if it comes from algos...I dont trade equities but I cant imagine they are any worse then the sell-side traders in fixed income products who spend their days trying to repeatedly fleece clients through old-fashioned, non-algorithmic methods of cheating.

Also, just FYI farmland is at all-time highs so while agribusiness may be a good idea you certainly arent getting ahead of anything by going to college to learn about it now. The boom in this sector is already full-on and you are likely getting to the party a bit late.

 

Yes, you can make buttloads at a HFT if you are a badass programmer.

But don't get a CS major because of the massive amounts of money in HFT. Get a CS major because you love CS. If you don't love coding and programming, even if you pass the classes, you will be a shitty developer your whole life. The really good programmers I know eat drink and sleep code. The good developers I know consider coding to be almost as good as sex.

You need to be passionate about the area you go into. Otherwise you're just selling your dreams for money.

 

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