Cs minor to s&t

Hello, I was wondering what your guys’s thoughts are in majoring in finance with a comp sci minor to get into S&T (trading side) . I understand just a finance degree is really not enough in most cases, but I really don’t want to go all out and major in cs. Would a minor be enough for the most part? Thanks

 

I dunno why everyone on this site thinks S&T is a programming job. It’s not. You will not be programming buddy, your desk strat will or some fucker on your product dev team. Will having some CS background help you? Yes, depending on product VBA background is helpful but it’s not a deal breaker. Focus on GPA. CS classes are notorious for bell curving and fucking your GPA so make sure you are THOROUGHLY researching professors if you’re CS minoring 

 

Yeah - spend more time learning the underlying products. Learn the jargon. Much of that isn't taught in school. You're not going to analyze companies or build DCF models. but you better know your bids from your offers. 

CS and programming is over rated. there is a small niche that uses both, but most traders won't program and more likely aren't allowed to program.

 

Well its complicated. You won’t have traders full out programming as that is a waste of time. But increasingly, automation has become a big focus at banks, along with cost reduction.

So the trend is that, while seniors may not program themselves, many do see the value in having some of their tasks automated. Some things are too simple for a strat to handle (they usually work on bigger projects), but it is something that a junior can handle and would add value to the team.

You will get a lot of variable feedback on this. FICC and Equities are completely different worlds. I sit within equities and that is my perspective. I’ll close by saying that at least 50% of my analyst class had some programming proficiency. And this includes analysts across equities and ficc.

 

It just depends what you want to do. If you want to be a credit trader on the sellside, you won’t need to program

even in rates at a bank, you don’t need to program to do the job 

If you ever want to go to a macro hedge fund, it’s practically required these days. If you know cs you will have 5x the opportunities as someone who doesn’t know at least python. Honestly there is no reason at all not to learn CS, it can only help. I’m constantly working with data, back testing my assumptions and developing new strategies. Knowing how to program is invaluable 

 

A CS minor is fine if you want to signal you are comfortable with programming and algorithmic thinking.  It's not going to substitute for a major, and you'll still be behind someone who knows how to code as far as "quantiness" goes.  In general the skills that matter for trading are (i) ability to learn stuff, (ii) ability to figure out when something seems wrong/off, and (iii) ability to manage emotions and risk.  Doing math/CS doesn't really help you do any of those, although people who are good at those fields tend to be good at the first two.  

I'd say its sort of similar to the tech PM role, where you don't need to be able to code stuff day-to-day, but increasingly, its important to liase with the quants and IT and figure out what sort of things are useful and can be delivered and prioritized in a reasonable time frame.  More and more projects and initiatives are going to do this, so I think it will only be more important going forward.  

 

I'd like to add one more thing that I think is important, especially for those of you in school.  Think of the Wayne Gretzsky quote about going where the puck will be, not where it is.  It's still possible to get internships and FT offers without a technical background.  That said, banks are more and more trending towards monetizing their franchise, rather than letting guys punt around risk and getting paid for it.  You can still take views, but most of it is going to be on a relative value basis rather than higher-VaR directional bets.  

If you want to be at a bank for a decent amount of time, it's really important to understand that you don't necessarily get paid on current value - you get paid on expected future value.  Think of your P&L as a sunk cost - the bank can choose to pay you zero and keep your P&L for this year.  If you're a consistent performer and have some systematic way to make money, that's valuable.  If you just punted some risk and got lucky, that's less replicable, and your comp will definitely reflect this.  

So where I'm going with all this is that you don't want to be a 30 year old 3rd year VP who's getting fucked on comp now and going forward because your future outlook isn't in line with where the bank is headed.  I strongly believe that in the next 5-10 years we're going to see a massive transition towards technical skills.  We're already seeing automation in liquid stuff (equities, FX, and now vanilla rates), and this trend is going to continue.  This isn't to say it's going to be doom and gloom like every other thread on this forum, but that the skill set that matters is going to change.  Additionally, the number of traders required is going to shrink and you know who gets cut first when that happens.  If you get your foot in the door now, that's great.  But, I think you will need to be at the very least tech-savvy if you don't want to get RIFed in like 7-8 years.  It's much easier to learn this shit now when you're in school and have the free time and a supportive network than when you're working 60+ hours a week and have things going on in your life.

 

That's interesting, and definitely something to consider. I guess my question though is, do you think that simply minoring in CS will be enough for the technical skills I need, or will that not be sufficient, will I need to major in CS to have the skills I need?

 
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Learning stuff is an iterative process.  It's not about taking 4-6 classes and calling it a day.  You could do a bunch of CS or zero, but at the end of the day, I think a career in trading at a bank is going to involve a lot of understanding the potential and limitations of developing tools and systems to make trading more streamlined.  Being on top of that and learning about whatever internal tools you have is going to play a big role in that.  

I personally think a CS minor would help compared to doing nothing, but at the end of the day you have to want to learn it and more importantly, constantly try to improve.  Your motivation could be either because it's interesting for you, or because you value the upside career-wise in learning it even if it's not fun.  That said, it takes some work upfront and an active desire to continuously improve to stay competitive, both internally at your firm and externally in the market.   

I'm senior enough where I have a lot of these sorts of discussions with senior management (head of markets, head of an asset class,...etc) on a regular basis.  The guys who aren't interested on involved in this sort of development are dinosaurs, and aren't getting paid or prioritized for promotions.  There are a lot of late 20s / early 30s finance majors out there whose careers are functionally stagnant because they don't think that's the future of the business.  And those are guys who came in 8-10 years ago when tech skills were less in demand.  Being willing to learn and adapt is a serious skill in trading, and stepping back and thinking about the bigger picture sometimes can help give you some direction on what to prioritize.  

 

As a trader at a bank my day was 30% coding. As a trader at a hedge fund it's more like 80%. This is derivatives so lots of analytics, data presentation is involved in figuring out trades but situation would be similar if you're doing say fixed income RV. If you do physical commodities you might be able to get away without much data analysis (not a given though) however with derivatives you'd need the data analysis and analytics skills, hence you need to be able to code. If you do equities unless you want to be fundamental (in which case you should do banking not trading), you need quant skills. If you do credit exotics or credit index trading, you'd need quant skills too. I think even mortgage guys have some funky modelling around prepayments so as a junior they'd probably like you more if you can code. I think only trading job that doesn't benefit much from coding skills and can get you paid is HY bonds

That said, there are a lot of "trading" jobs on the floor which don't require much data crunching or intricate modelling. Very hard to get paid in the majority of them though. On the other hand there are a lot of quantitatively difficult trading jobs that won't get you paid either so please don't take the above as advice to get into the most quanty products.

 

Thanks for the advice, +1 SB. Do you think an applied math (computational finance) major would adequately prepare me for the jobs you mentioned? THe degree at my school goes through Calc 3, a bunch of advanced stats classes, quantitative finance classes (stuff like etc.) and a few scripting and computing for finance classes? It includes a lot fo subjects, but not that deep in any one subject. 

 

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