Fundamental / Equity / Macro Research Roles at Quant Trading Shops
I wanted to give back to the community by sharing my knowledge about these niche, but increasingly common roles at quant trading firms. I have interviewed at a few different places and secured multiple FT offers.
The role's exact naming varies firm-to-firm like the title suggests, but your responsibility is to analyze headlines/events/catalysts from a fundamental lens (non-quantitative) to add an additional overlay into the traders' decision-making.
Generally, your responsibilities can be categorized along 3 dimensions:
- Monitoring news events during and before market hours, and communicating to the traders what's happening, your view on it, and how it affects your desk's positions/products.
- Longer-term projects where you're analyzing catalysts/opportunities that are further out to generate fundamental trade ideas for your desk.
- Trading your own book, although different firms emphasize this more/less for research analysts.
A non-exhaustive list of firms with these roles: Jane Street, Citadel Securities, HRT, Jump, SIG, Optiver, IMC, DRW, Old Mission, Mako, and DV Trading. Note: most of these firms hire new grads for fundamental roles, but not all do. Since it’s trading, virtually all roles will be in Chicago or New York.
Compensation for new grads can vary a lot, but I’d imagine TC is between $180k and $300k for most. Because you’re at a trading firm, compensation scales with P&L contribution rather than tenure. From what I’ve seen/heard, high six-figure or seven-figure comp is possible.
I’d describe the interview process as L/S-esque but with a greater focus on near-term catalysts/events and less focus on financial modelling. Scenario analysis is quite common, and light math questions are also possible. Definitely helps if you follow the market and can speak intelligently on what’s been happening and why. Most backgrounds I encountered were econ/finance with a cs/math skew rather than pure STEM like the quant traders/researchers.
Overall, I think these roles offer really exciting work in a P&L impacting role. You also get the benefits of working at a trading firm like chill(er) culture, market hours, and comp upside without having to grind math/cs.
Based on the most helpful WSO content, here's a breakdown of Fundamental/Equity/Macro Research roles at quant trading shops:
Role Overview
These roles focus on analyzing headlines, events, and catalysts from a fundamental (non-quantitative) perspective to enhance traders' decision-making. Responsibilities typically fall into three categories: 1. Monitoring News Events: During and before market hours, you'll track and communicate key developments, provide your perspective, and assess their impact on your desk's positions/products. 2. Longer-Term Projects: Analyze catalysts and opportunities further out to generate fundamental trade ideas for your desk. 3. Trading Your Own Book: Some firms emphasize this aspect more than others, allowing research analysts to manage their own trades.
Firms Offering These Roles
A non-exhaustive list includes: - Jane Street - Citadel Securities - HRT - Jump - SIG - Optiver - IMC - DRW - Old Mission - Mako - DV Trading
Compensation
Interview Process
Why These Roles Are Exciting
This is a great opportunity for those who want to combine fundamental analysis with the dynamic environment of a trading firm!
Sources: Advice On a Career, Q&A: Rates & Macro Research/Strategy - Career Path, Technical Topics, Education, etc., Compensation Structure At Quant VS Fundamental Funds, Best internships for Quant Trading?, BAML Front-office quant vs Prop Shop Trading
I really loved your post. Its been massively helpful read for me and I tried to find a lot on the subject to no avail. However, I am extremely curious about the recruiting process for the role as well as more details on how to best prepare. If its convenient would love to DM about it!
If it’s just questions on recruiting / interview prep let’s keep the discussion here.
Otherwise happy to dm if you plan on sharing personal info.
Have some questions about what you think about like personal fit career wise so I guess some more personal stuff.
How does the lateral process for these firms work? Coming from generalist principal investment role, I assume doing research and having thoughts around a particular industry? Is it through HH?
I think it depends on how many YOE's you have. If you're 1yr, you could probably apply to a lot of the new grad positions. If you're 2-3 years, you can apply directly to these companies rather than going through HH's. If you're more senior, you might have to go through HH's although I couldn't speak on this.
Not entirely sure what you mean by generalist principal investment role, but it sounds like you're already doing buyside research so your experience would definitely be relevant. Since research teams at prop trading firms tend to be rather small, I don't believe they prioritize sector coverage needs in hiring.
I think in your case, a trading firm would want to know why you'd prefer a trading environment over your current role. Trading firms tend to trade around much shorter timeframes at a much greater frequency. Correspondingly, your focus as a research analyst will be on market perception/catalysts/headlines rather than realizing longer-term trends / business value.
Great answer
thanks for the information!
What’s the long-term trajectory like for these roles? Do people exit to other types of seats or is it too niche to move elsewhere (e.g., to more traditional investing seats/toward more quant-focused roles)?
These roles are pretty new so I wouldn't say there are established exits / trajectory. I'd imagine a move to a more traditional investing seat would be possible as you're effectively a buy-side equity analyst already.
What was your recruiting process like? Do you recommend chatting/emailing or is it more trading adjacent (in that you just apply and get OA)?
It’s definitely more similar to trading in that most people who get offers probably didn’t network / get referred.
With that being said, the industry is already pretty small and fundamental teams are particularly small, so if you have alumni/connects I would think there’d be a lot of value in reaching out relative to how long it’d take.
I have heard you don't get bonuses regarding pnl and you basically have a flat comp. Also you have the risk of getting laid off quickly. Any thoughts on this?
Maybe not for some firms in your first year, but as you progress your bonus is absolutely tied to P&L contribution / idea generation.
Because this is a P&L impacting role, it’s entirely possible/expected that you won’t have a job if you don’t perform. I’d say most firms give you leeway your first year, but at some point you need to start justifying your pay.
Any recommendations on how to prep for interviews beyond what was mentioned in the original post? Worth the time to build out a full stock pitch? Any insight would very much be appreciated.
Don’t have anything to add aside from what I wrote originally, but happy to give more detail:
Can you expand on the math needed? Nothing complicated but need to know probability distributions?
Also is there any path to a trading seat from here?
This is a great thread
Very insightful thread, thanks for sharing.
Any advice on how one should approach scenario analysis? What are the frameworks that you use? Especially at a prop trading shop which I assume is much more short term than at a HF but still different from the sell-side.
Mind if I DM you? Keen to ask how an undergrad should best prepare to interview at these roles. Junior majoring in Econ here with some macro hf experience, keen on macro-related prop trading roles.
Not sure what you mean by frameworks but always helpful to tie your scenarios to numbers: what’s the probability and what’s the quantifiable outcome.
Let’s keep discussion here so others can benefit unless you need to share personal info
so youre telling me i can work at HRT with a business degree??
i would love to know this as well
yh in ops/biz dev
Very helpful thread. Thank you.
From what I have heard, even within these fundamental teams at quant funds, people carry very different roles - Traders or PMs, ECM analysts, macro analysts, fundamental equity analysts, etc. Do you know whether these non-trading roles have chance to manage risks one day or they are pretty much pigeon-holed in these specialized seats?
The former, albeit less so than pure fundamental shops
Opportunities to manage risk will be firm-dependent, but many have a dedicated trading book for researchers on the fundamental side to put on risk.
With that being said, you should think about when a fundamental person at a trading firm would have an edge over other fundamental market participants (e.g., L/S HF). There are trades/events that you may be interested in trading that fundamental people at trading firms are less likely to trade as they wouldn’t have edge over the other participants making these trades.
Hey, this is super helpful comment. Thank you.
Is it fair to say that these Fundamental or ECM strategies at prop shops (Jane, Jump, HRT, etc.) are pretty small / marginal, or they are actually quite big in terms of profits generated.
If a person is not progressing towards taking risks, I would assume the pay will have a cap, which might not be very high - i.e. high hundreds of Ks, but not into the Mils?
Is there a certain recruiting timeline I should expect for FT? Currently a rising senior with some good internships and wondering if recruiting for these roles has already occurred (or if they will occur after my internship finishes in early August).
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