Trading without quantitative background
Hey all - I've recently landed a FT trading gig at a prop firm in Chicago (think Tier 2 - Akuna, Optiver, IMC, etc) - but I do not have a highly quantitative background.
Studied Economics and Philosophy for UG (without strong mathematics fundamentals). Some CS experience but not the best coder.
Somehow, I managed to land a job. I'm really interested in trading, but am I setting myself up for failure?
Frankly, I have little idea as to what my job will entail, which desk I'll be on, what I'll be trading, and how I'll be trading. Tried searching / speaking to others, but found it difficult to stumble upon information.
Does anyone have any advice?
aren't the interviews mental math & stats heavy or am I wrong? if they are, you're def selling yourself short..
I have a biology degree and I am doing fine lol those firms you listed and including mine have trader training programs. They are looking for smart people with good people skills who they enjoy working with.
We've cut some savant style kids because we just know they won't fit well on the team and I'd rather have a guy who knows 99% that I fully trust and enjoy working with than 100% who can't even speak to me simply who I feel scared pitching ideas to because idk if he'll shaft me or if he knows that it's not a systematic approach and more-so a "gut-feeling" idea etc.
For most options MM firms (not HFT/Algo style) we just want quick thinkers who work well under pressure, are good with numbers, and maybe a little coding experience. Everything else we'll teach you.
what kind of pressure is felt at algo/hft firms? Could you give an example of being in a high-pressure situation.
At HFT/Algo firms I have no idea because I'm not there. I meant in the interviews for HFT/Algo firms they'll be more inclined to take savant coders who build fast systems than taking the guy good at quick mental math and discretionary risk management. If you're a quiet, smart guy who absolutely loves coding and efficiency then I think you'd like an HFT/Algo firm like Jump Trading, HRT, Tower Research a lot more than an Optiver, IMC, Akuna, CTC.
In terms of the high-pressure scenarios that might be felt at my shop - we hold options to expiry and we have to be monitoring our risk management systems and the market. When you're holding short-dated OTM options to expiry you have the possibility of stocks being pinned at certain levels to prevent massive short-dated gamma from blowing up other books, and you have the possibility of ATM options flipping to ITM near expiry that needs to be properly managed and hedged so when you're short or long a ton of gamma your underlying exposure doesn't 10x if an option goes ITM.
One of the most recent stressful scenarios that I know of was that our book held a ton of short-gamma positions on tech stocks with weekly options that we had fully hedged with the underlying. The recent market volatility has caused some nasty moves and we've seen intraday reversals of up to 3-5% on some indexes alone which end up being 8-10% reversals on the underlying. I'd check my book at 1:00 PM some days and think ok we're pretty solid on this expiry heading into close and take my eyes off the book and about 30 minutes later the whole position has flipped and although the systems and execution has managed it decently it could easily get out of hand if certain parameters start going out of bounds that I need to stay glued to my screen to monitor.
At an HFT-style shop focusing on arbitrage and volume and exchange flows, your systems should be built to handle any sort of market movement and capitalize on arbitrage opportunities. HFT shops are mainly doing market-making on spot flows anyways since options market makers need some sort of human touch to manage non-linear risk when it comes to having so many different parameters and market conditions that can alter your positions that systems and algorithms cannot account for. I do not see options MM becoming fully automated for quite some time.
thanks for the specific examples.
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