Shift in trading skillset in comparison to quants
From what I’ve read, S&T is, and will, keep becoming more technical. My question is this:
What skillset are they shifting into? If it’s more quanty stuff (Maths/CS), what benefit does working at a bank have over working in prop trading / a HF?
Most likely going to be... none. Unless you really like dealing with clients, and don't like taking responsibility at a young age (which is fine). Probably more job security in S&T but if you have the skillset to get into prop/OMM you should most likely take it. Probably 2-3x the graduate comp + better skillset + better environment + more responsibility.
*for the top firms, yes. what does better environment even mean?
From what I've heard from friends in S&T compared to what I hear over here, better environment meaning less micromanaging and more autonomy. When your core responsibilities in S&T are optimization/automation + focusing on client requests vs alpha generation, model tuning + prop trading it gives you a bit more of a lenient working environment with more coding/trading being the focus rather than managing a flow book or mindlessly quoting spot/agency-related trading.
This is a comparison between what I've heard from Analysts in S&T and 1-3 YoE Prop trading. Probably different as you progress with more opportunities for autonomy, risk transforming, and actual trading when you get your own book.
technical only at the fin-math level(ex: understanding of derivatives, IR curve, etc) and only applies to traders/strats/structurers at very specific product/area. You will be surprised to see how so many traders don't have good understanding about linear algebra, data structures, (even most of them don't know how to write codes!).
There are only 2 benefits of working at a bank compared ot prop or quant hf: 1. job security 2. you are given more time to know ur products/markets. But somehow these 2 are highly correlated lol.
Except for that no single benefit of working at a bank over prop/hf. If you are smart enough to learn very fast, honestly no reason to choose S&T over top latters.
Thanks for the response. When you say better security, does this factor in the reduced headcount within S&T?
From what I’ve read, prop trading is very much growing (headcount increasing) whilst S&T is getting smaller. In this regard, is it still safer to pursue S&T?
I currently work at a prop shop, and can think of a few reasons to work at a bank
you can trade way more assets that prop shops don’t touch. For the most part prop shops don’t touch MBS, credit derivatives, cross-currency basis swaps, munis etc. Theres a whole world of OTC products to trade that are only traded at banks and hedge funds. While being at a hedge fund to trade those products is preferable, there’s no way to learn those products without spending a few years at a bank
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