RE: Prop/Quant Trading - Why is it not as big a target as Investment Banking?
Hi everyone,
I'll preface this by saying I have only just come across the subject but, like many on this platform, was initially inclined to investment banking as I was interested in pursuing Finance and it seemed the epitome of this field. But as I read more into the roles within the financial services , I came across Quant trading firms - who's roles I've actually found to be quite interesting.
I was wondering why such a large number of undergraduates are instantly geared towards investment banking compared to the likes of Proprietary/Quantitative Trading roles.
From what I can see:
- Much better WLB (as low as 40-50 hours I've read; of course can vary).
- Much better remuneration packages (1-200k+ out of undergrad).
- Equally as stimulating work (if not more stimulating than that of IB).
- But IB tends to hold larger prestige of the two.
- I presume IB has a higher upside (i.e. if you reach MD - but what's the career progression like in Quant?)
- (and if I am wrong on anything/miss any other conclusive points, let me know).
I presumed that this may be because of:
- The largely Mathematical nature of work.
- Highly competitive nature (I guess similar to IB - except you now compete against Maths Olympiad winners etc.).
- Low number of firms compared to IB or Corp Finance boutiques etc...
- Potentially a hard to retain job? (unsure - looking for opinions on this).
I'd love to learn what knowledge is needed and what skillsets differentiate model candidates for an IB summer analyst role versus a summer analyst within Quant Trading.
Feel free to let me know your thoughts below, too.
P much every decent IB pays 120-250k USD out of UG. Quant firms are closer to 400-600k.
You pretty much gave the answers though; the other point is that these firms just aren't as well known as a household bank
Pretty much 99% of people on here do not even have close to the math skills required at these prop shops lol. IB is selective, but quant is a whole different level of selectivity
Yeah it’s merely a skill gap, IB requires basic algebra whereas quant requires a math major at the very least…
Quant typically requires advanced knowledge of statistics/game theory, computer science and programming, and just overall a very different skill set than the basic accounting and valuation needed for IB.
You can learn the fundamentals needed to get a IB seat in 2-3 months essentially . Quant and the better S&T desks require a lot more math . Besides that , there are less seats so even harder
Because IB and Quant skillsets are entirely different. Additionally, the mathematical rigor and focus on programming mean the same people qualified for IB are most likely not even passing the resume screen for any quant firms.
I see you said you have only just come across the subject so I won't go after you too much here, but your assumptions on IB having a higher upside and IB holding more significant "prestige" (which is a stupid metric anyways) are wrong.
I don't know of a single person within the industry who would say IB at X bank is more prestigious than PM at Citadel/Brevan/P72 or Trader at Jane Street - these are usually the exits haha.
What does prestige even mean really? An admiration of the exclusivity, reputation, and influence someone of a certain role embodies?