Hi All - I'm a WSO Head Mentor for the Academy and realize I'm getting a massive inflow of messages for QR/QT mentorship. I also mentor a few student organizations across the US and continue to hear the same questions at these networking events.
While it may benefit me financially to gatekeep as much information as possible and have as many of these students DMing me to book mentor sessions as possible, I've always been about helping others and providing more transparency in the industry. Additionally, I don't have the time to take every single call while continuing to work full-time.
I will provide some clarity and answers to a few popular questions I've gotten over the past few months with the idea of being as direct and transparent as possible and setting expectations. There's no point in trying to sugarcoat things to make people happy or feel like they have a chance when, in reality, they have no chance. My response to many of these questions will be "referring to the norm," while there will always be that one student in 10,000 who might break the cycle, I'd rather students go in with the expectation of conforming to average rather than trying to be the outlier.
I recruited and received multiple offers in 2021, traded for a year, went back for a master's degree, and received FT + internships in the 2024 landscape. I ended up leaving the master's degree to start full-time as an options market maker and then made the transition out of trading entirely to something more entrepreneurial. I had a non-traditional background with a major in soft sciences and a GPA below 3.0. Here's what I've seen through our incoming intern cohorts, interview prep/process during both the 2021 cycle (way less launchpads and discovery days + way more non-intern returns) and 2024 cycle (way more launchpads, more prepared students, more return interns than laterals), and through pursuing a target undergrad + an MFE.
I'll try to make this comprehensive enough that I can send this to students who ask these questions since I receive so many LinkedIn messages and inquiries, and I might edit this post later to include more questions or have a part-two within the post. The goal is to be direct, transparent, efficient, and appease to the 95% of the time outcome rather than outliers. This is mainly catered toward the options market-making firms in Chicago + some in NYC. I have no clue how HRT + Jump Trading/Tower and other more HFT/research-oriented shops work from a hiring/recruitment perspective.
This post is most relevant to Sales and Trading roles at banks, and Quantitative Traders at Options Market Makers; the process for a QR or QD role at the same firm differs.
1) Does my school matter? Yes. If you don't go to at least a semi-target or target, you're fighting an uphill battle, and nothing you have on your resume will fit you in as the average applicant. If you're unable to get a discovery day, launchpad, or any of these pre-sophomore programs, and you're not at a target, there's a 99% chance you are not getting the OA or the interview. Like I said, 95-99% of the time here. There's someone from an SEC school in the southeast heading to Jane Street as a Quantitative Trading Intern who also received multiple offers. Their background is so different from yours that you will not be the outlier he is.
2) Any tips or tricks? No. These processes are some of the most transparent and widespread in the industry now. You know, you get an OA, and it moves on to a technical phone, behavioral screen, and super day. The process is so structured and managed by teams of campus recruiters who have designed this program and iterated over the past few years that there are so many resources to determine what you will be asked. Asking this question during a coffee chat and expecting extra guidance or resources shows you haven't done any legwork yourself. Resources: Greenbook, Heard on the Street, 150 Most Frequently Asked Questions on Quant Interview, + Multiple Different Question Websites, Statistics Textbooks, Probability questions, Brainteasers, and some mental math. There's the toolbox; now it's up to you.
3) How much programming knowledge is required? Speaking for OMM firms, Numpy and Pandas should be the bare minimum. You can get a few firms/internship roles without programming experience. Still, you will be expected to add value, and it's tough for a Junior to add value if they have zero programming skills. Do your research on the firms that focus less on coding. As an anecdote, if I didn't want to code a single line and purely trade and make markets, I could have done so in my prior role. At my current firm, If you don't know Python, you're not even getting past the interview process at my current firm since we have a coding case study in our superday.
4. Do referrals matter? Depending on the firm, they can matter quite a bit, or not at all. Given my GPA and background, my referral got me the OA and into the process for one firm. It also bumped my OA result to the top of the pile and put me in the next stage. For other firms, it did absolutely nothing. My advice is: If you can get a referral quickly, go ahead and use/leverage it ASAP. If you can't get a referral, do not bother spending the 1-2 weeks to build rapport to get a meaningful referral. Seniority may matter as well, prior intern referring you may mean nothing, senior trader might get you the OA.
5. Do I need knowledge of finance? If you did not have a prior internship at an OMM, the odds you are asked options questions are very low. I do know some students who were asked options questions in their interviews despite not having past finance knowledge, but it will depend on the firm. Do your own research to figure this out.
6. How do I explain: "Why this firm" during behaviorals? Let's be honest. I have never seen an experienced trader talk as much about "Tiers" and "Prestige" as the incoming new grads every year. Most of those kids are immediately humbled when they realize their 4.0 CS major from Stanford doesn't mean shit if you're not generating P/L and quickly picking up the art of OMM within the first year, so you're left with the rest of the cohort which knows how to trade and could lateral to any other firm if they have an inclination + P/L tied to them. My answer to this would be: Any trading firm that's been around for 25+ years has some sort of edge that they pitch during recruiting events. Lean on that as your baseline because it shows you've done some diligence during coffee chats or listen well during recruitment events. Everyone knows IMC is one of the fastest and best at pure market making the front end of the curve where liquidity is the best. People know DRW and Optiver have strong positions, taking teams and "alpha". SIG is great at index options, Old Mission spun out of SIG but has you trading earlier, so maybe if you're more entrepreneurial and want less structure, it could be a good fit; Blackedge is a niche firm that has a strong product in the treasury markets and growing rapidly, maybe you want to be an early employee at a firm growing quickly, etc.
7. How much money do you make? It is firm-dependent, but you'll most likely see offers for new grads ranging from 200-650K+. You'll get a target (and USUALLY guaranteed) first-year bonus, a signing bonus, and a base salary. As a guide, IMC Optiver DRW SIG is going to be 375-460ish, Citadel Securities + JS > 525K, Maven, Flow Traders, Belvedere, CTC, Blackedge, Geneva are going to be 180-280Kish. Don't tell me about the one-off competing offer that bumped your CitSec friend to 700, like I said - answering for the 95% of situations.
This is probably good enough to start any discussion, and I'm happy to answer any other questions. This is one of the fields with the greatest amount of ego in it, so before you waste your time typing "Actually, my friend didn't go to a target school and ended up with five offers." or "Sorry, but IMC actually pays 460K this year and not 385K." realize 1) I don't care, and 2) I'm trying to provide general answers that get the point across.
This post is most relevant to Sales and Trading roles at banks, and Quantitative Traders at Options Market Makers; the process for a QR or QD role at the same firm differs.
How does comp scale for a quant dev and quant research and what is the job security like? Does it mirror traditional pods in the sense you get what you produce nd if you don't your out?
Hi, for QD/QR questions, I have no clue beyond what I've witnessed in the industry and within my firms. Job security for QD is fine. Job security for QR depends on whether the QR is generating alpha and has a P/L attached to it or if it's more of a trader-focused firm where the QRs are working on pricing models and optimizing rather than strategy. If there's a P/L attached to your name, your job is only as safe as your performance.
QT at an OMM usually has a P/L attached to it, so job security is pretty terrible the first two years if you're slow getting up to speed. Usually, if you can exemplify proficiency in that first 1-2 years without getting fired, you are innately knowledgeable enough for the job and end up staying for quite a while.
Are there any median number for what to expect maybe 5-10 years in for QR, QD, QT. Considering getting an MFE, so trying to compare to regular finance on long term basis
To be transparent with people, there's honestly no reason to think about that from my perspective. The career is a very volatile one; one year at the right firm with the right tenure and right seniority could be a low 7-figure bonus, depending on the capital you swing and if you're at more of an OMM that takes positions and pays out more formulaic to certain teams, could be a massive bonus. You could have a great year for the firm, and your product did terribly, and you're fired.
I know the answer isn't what you want to hear, but there's no point in speculating 5-10 years down the road for a QR/QT. The odds you survive that long are probably 50%, and the comp, if you actually perform and generate a P/L for the firm, is going to be multiples of the number you'd need to live comfortably in any city. Not sure what benefit hearing median comp 5 years in is 1M vs 1.75M vs 3M in 10 years gives anyone. Fact of the matter is no other career will give you the upside like a role where you're tied to a P/L.
I'm coming from a quanty undergrad background and deciding whether to pursue career in trading at a bank (algo desk or otherwise) vs a quant prop shop. Have landed offers at both but having trouble comparing medium/longer term prospects. Do you have any advice? Currently finding it difficult to pinpoint what I should be prioritizing, particularly since I'm somewhat product agnostic.
Hi. This is actually a great question because there are people who always are curious about the "Quant" path at a Multi-Strategy vs a Prop Trading/OMM firm, vs a bank. While I don't have any experience on the multi-strategy this would be my short answer.
If you are a trader on the S&T side at a bank, on any sort of volatility/options focused desk, and also happens to be FX/Rates, your exit 95% of the time if you don't just stay on that team will be the global macro multi-strategy pods. If you think about it, you are on the opposite end of the trades that every client puts on and you're taking down an immense amount of toxic flow. Do you think that you know more in the time of the trade than the Citadel/Brevan analyst who spend a month coming up with this FX options trade idea? Most likely not. You end up developing a skillset in risk management, position sizing, thinking about the Greeks, and being on top of market trends. If you're generating a P/L and all you do is take the other end of toxic flow, then hedge funds start opening their eyes and thinking wow this guy must be smart, let's see if he can hack it without seeing all the market flow.
If you are a trader/quant trader on the prop/market making side at an OMM, you don't really ever exit to those same roles that a trader at a bank would. Your positions are much smaller, you're researchers are actively helping you take views on volatility, but more importantly your book and expectation of returns is very different. Global macro pods might be swinging around 1B+, and throwing 9 figures on very researched, but very discretionary trade ideas. The FX/Rates desk at a DRW or Blackedge or CTC might be taking discretionary bets as well, but in much smaller size and through their own thesis/idea instead of being forced to take it down on the opposite side of a client trade.
I think this might've been a poor explanation on my side. I am very biased to do anything on the options/vol side. That skillset cannot be fully automated away, and options/volatility background usually leans to exits at global macro or vol trading funds if you come from a bank. If you're a trader at an OMM you usually just hop between competitors, there's not really exits to HF from an OMM as a QT. QR/QD is different.
Hi, thanks for taking the time to do this. I have three questions, perhaps you they are not great or you cannot really answer them but here they are anyways:
1) Do you think it's possible to break in a bit ''older'' in this field? For example, with an MSc in mathematics/physics and 2-3 years of professional experience as risk quant (age around 27-28), is it possible or has the train already left?
2) How does the industry change between USA and Europe? For example, one difference that perhaps is there, is that there are not so clear target schools in Europe, or am I wrong?
3) Is it true that QR in OMMs mainly support the traders? Are there OMMs who have QRs with PnL attached to them?
1) I think that it could be possible but you'll probably need to focus on shops that are open to that kind of profile. Many of the larger firms just focus specifically on the graduate pipeline for talent from a culture + knowledge perspective. Most prefer an unencumbered knowledge base of finance so they can really teach you their style from the core. A more position taking oriented firm vs a pure market making firm might teach trading on an options desk much different. Thinking in terms of bid/ask spread and pure market making vs relative value volatility trading or warehousing positional risk, etc. You might also have an opportunity or shot in a different asset class such as Digital Assets, and you might have an opportunity if you're able to convey your knowledge/background to a few headhunters.
2) Not sure to my knowledge. Both of my firms preferred recruiting from Cambridge/Oxford/UCL I believe for the UK. To be honest, I have no clue. I assume Oxbridge + ETH Z are probably ideal?
3) From my knowledge it seems like it, depending on the team. If you're a QR at an OMM on a position taking team/focused on alpha (I know 2-3 firms with this style in which they have market making + position taking teams on the same asset class). Can't say for sure since I'm not a QR and the QRs on my team were focused on execution logic/pricing/vol-surface calibration.
bump, same BG, also interested
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When you say semi-target or target, would this ranking be more or less the same for IB/PE with the addition of a few engineering schools? Obviously MIT places incredibly well, and I've been able to gather that Georgia Tech, CMU, and even schools like Purdue place great, but where in the rankings would these schools go? Would it be smart to take them over finance semi targets (UMich, UVa, Georgetown, etc.)?
If you want to get into QT then yes HYPSM, Berkeley, Cornell, GT, CMU, I would prioritize over any LAC or school known for IB/PE.
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