AMA: Top Quant Firms First Year Comp 250k to 400k

First some background, I am a senior and am heading to a quant shop for full time this summer. This past recruiting cycle I received offers from Two Sigma, Citadel, Old Mission, Hudson River Trading, DE Shaw, Jump, and Five Rings Capital for positions ranging from pure dev to pure quant. I study CS and go to a decently well known school but definitely not a target or semi-target. Though, I have managed a high GPA and good internships (Google/Facebook).

I have seen some discussion on this site about first year compensation at quant shops and there is quite a bit of misleading information. I wanted to help clear the air of some misconceptions and answer any questions as I had a tough time learning about the industry.

From lowest to highest first year compensation, the companies went Two Sigma, DE Shaw, Five Rings, Jump, Old Mission, Hudson River Trading, and Citadel. Two Sigma was 250k first year all in (150k base, 50k sign, 50k guaranteed bonus) and Citadel was 400k first year (150k base, 150k sign, 100k guaranteed bonus). HRT and Old Mission had the highest base and highest base + guaranteed bonus.

There was not a significant difference between compensation for quants and devs, at least first year. Both the Two Sigma and Citadel positions were quant dev. All these offers started a bit lower but climbed up after negotiations. Aside from the quant firms, I also had offers from tech companies. Most of the interviews were quite algorithms and statistics focused which did require a bit of preparation. The smaller the shop, the more specialized the interviews.

Comments (122)

Jan 19, 2019

Congrats on the offers, how much did they move in negotiation? Where did Citadel start for example?

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Jan 19, 2019

Citadel started at 150k base, 100k sign, and 50k guaranteed bonus. Some moved up ~100k after negotiations.

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Jan 19, 2019

Do you think these are typical offers or are you an outlier?

Jan 19, 2019

Also have you decided which you're taking?

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Jan 19, 2019

How did you prepare for the quant interviews? What kinds of resources did you use and what specific topics (if any) seemed to reappear throughout your interviews? Thanks!

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Jan 19, 2019

I mostly reviewed the fundamentals of statistics and machine learning by working through The Elements of Statistical Learning. Aside from that, I also did a bit of computer algorithms prep through sites like Leetcode

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Jan 19, 2019

Thanks for the reply - was there any finance stuff asked (options pricing etc.)?

Jan 21, 2019

I'm going through the book and this is heavy advanced math, definitely wasn't meant for a vanilla focused product guy like me. What is a good footing or a starting point to even get a chance to understand this book?

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Jan 19, 2019

Additionally, what were the recruiting timelines like these companies?

Jan 19, 2019

They typically start in June/July and go until December

Jan 19, 2019
quantfin:

There was not a significant difference between compensation for quants and devs, at least first year. Both the Two Sigma and Citadel positions were quant dev.

Yes, in fact developers will probably make a little more over the first 4-5 years. As a developer you are, however, a cost center while a quant should sooner or later develop his own alpha and move into a PM/trader seat.

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Jan 19, 2019

This is quite a big generalization and not true for all firms. Usually at these top firms, devs are not treated as a "cost center" otherwise the top devs in the country will not work there. This is especially important in latency sensitive companies where a decrease in latency from an engineering perspective directly translates to higher P/L. I will say that quants typically do make more after a few years.

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Jan 20, 2019
quantfin:

This is quite a big generalization and not true for all firms. Usually at these top firms, devs are not treated as a "cost center" otherwise the top devs in the country will not work there. This is especially important in latency sensitive companies where a decrease in latency from an engineering perspective directly translates to higher P/L. I will say that quants typically do make more after a few years.

It's a generalization which is based on my experience in the industry. A developer might not be treated as a cost center, which is important (and HFT firms do pay developers well) but in the modern environment he/she still is one. What do you think would happen if that feed handler (or whatever else) can be replaced by an off-the shelf product?

For better or for worse, low latency software development skillset has been heavily commoditized and you can get 2nd tier latency pretty much off the shelf these days. I have some latency-sensitive strategies that I am deploying with very little development of my own, for example.

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May 14, 2019

Seconding this. Any strategy that cares about latency will not treat devs as a cost center. They are not as important as quant researchers perhaps, but certainly on par with traders.

That being said, I think for strategies where latency is not a key factor in a strategy's profitability, the odds of being treated as cost center go up a fair amount- though of course it varies by firm and pay will be "pretty good" regardless.

Most Helpful
Jan 19, 2019

I'm not too worried as I personally know a few friends who have gotten very similar numbers this year so there are at least a decent handful of people though I wouldn't fully mind if someone managed to find out fully who I was. I think the stigma towards sharing compensation is underserved and more data helps employees better determine their true worth.

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Jan 22, 2019

Lol at "determine true worth". So naive and oblivious.

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Funniest
Jan 20, 2019

Must be nice to be good at math.

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Jan 22, 2019

-

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Feb 9, 2019

+

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Feb 9, 2019

= -

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Jan 20, 2019

What are your thoughts on going to prop shop vs hedge fund? Did you have a strong preference?

Jan 20, 2019

Unless the firm is very small, you should be more focused on which team you'll be working with versus the type of firm. There'll be interesting problems and great growth opportunities at both after you get past a certain tier.

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Jan 21, 2019

Congrats on your offers!
I have a few questions:
1. Did the offers you got put you on the track to becoming a trader?
2. What is the salary progression like as a quant?
3. Do most people need a phd to become a quant?

Thanks!

Jan 21, 2019
  1. The distinction between trader and quant vary greatly depending on the firm. At some firms, trader is a back office role where you just execute the trades from someone else's strategy or perhaps look at a dashboard and step in when a position looks off. At other firms, traders are front office and the ones devising the strategies. The titles quant, quant researcher, trader, quant trader can mean different things at different firms. Being a trader at Jane Street is pretty awesome but a trader at Two Sigma is back office (they only have a few traders).
  2. Salary progression again varies significantly depending on not only your personal performance but also your team's and company's performance. Also, depending on the firm, the payout structure can be quite different. Though Tower and HRT are both in the high frequency space, Tower's teams are much more siloed meaning that superstar teams will be paid very very much but there is only a handful of them. Whereas at HRT, everyone can see the details of very strategy and the performance of every team. Starting out as a new grad making 250-300k/year, my recruiters quoted me that within 5 years I should expect to at least double my pay but perhaps more if I perform well (take that with a grain of salt as it comes from a recruiter).
  3. A lot of firms hire directly from undergrad though the process is very competitive. I would estimate that combined, the top firms hire fewer than 60 quants directly from undergrad every year. There is a much higher representation of quants with PhD backgrounds.
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Jan 21, 2019
quantfin:

Starting out as a new grad making 250-300k/year, my recruiters quoted me that within 5 years I should expect to at least double my pay but perhaps more if I perform well (take that with a grain of salt as it comes from a recruiter).

Yeah, anything a recruiter feeds you requires a brick of salt.

Researcher salary flattens out very quickly unless you are in a seat that is directly driving PnL and you have a boss that recognizes your value. Usually there would be some alpha/strategy directly attached to your name and the boss/firm is worried that you are going to walk away with it.

Developer salary flattens even quicker, since it's a commodity skillset. From the business perspective, a developer leaving is just a pain in the ass since you have to find a new one and wait for him/her to get up to speed.

PS. btw, I worked as a PM at one of the firms you've mentioned and it's possible that I am working currently for the firm you gonna work for

quantfin:

1. The distinction between trader and quant vary greatly depending on the firm. At some firms, trader is a back office role where you just execute the trades from someone else's strategy or perhaps look at a dashboard and step in when a position looks off. At other firms, traders are front office and the ones devising the strategies. The titles quant, quant researcher, trader, quant trader can mean different things at different firms. Being a trader at Jane Street is pretty awesome but a trader at Two Sigma is back office (they only have a few traders).

The name of the role is irrelevant, lot's of firms would have 2-3 role names and push everyone into these roles. However, I think there are 2 orthogonal directions that do matter. First is "does the firm make money based on your personal alpha that can not be easily reproduced if you leave?". Second is "do you get paid based on your performance (ideally hard dollar formula) or based on some nebulous contribution?".

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Jan 21, 2019

TYSM!

Jan 21, 2019

What did the non-compete situation look like across your offers? Did it factor significantly into your decision?

Jan 21, 2019

The non compete time ranged from 1-2 years and didn't have a huge effect on my decision. At least for now, my plan isn't to stay in quant finance forever. I see myself either starting my own company, working for a small startup, or going to grad school after my first stint.

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Jan 21, 2019

Congrats on your offers and thanks a lot for doing this!

Coming from a school that's not a target or semi-target, how were you able to get in touch with the recruiters at the firms you mentioned/get past the initial resume screen? I heard they hire the majority of their class from HYP/MIT.

Also, on average, how would you describe the distributions of interview questions between machine learning, whiteboard coding, statistics, etc?

Jan 21, 2019

I mostly applied online or directly reached out to recruiters on LinkedIn/email (found emails by asking friends/guessing their email). I've found that, bar some, most quant firms are very open to interviewing candidates that aren't from a target or semi-target. They mostly care that you are up to both their technical and culture bar. Many of the people working at these firms are heavily skewed towards Harvard/MIT because that's where a lot of bright people go to school and where a lot of on campus recruiting happens.

If you reach out yourself/get a referral and have a decent resume, many firms will be open to speaking with you no matter the school. This is especially true with larger firms like Two Sigma, Jane Street, etc. The interviews will still be quite difficult, though, and most people will be filtered out during phone calls. It is more difficult, however, to do so for smaller firms where they only hire a handful of people every year and give precedence to their alma matter (I got filtered out by a few places this way).

The interview questions really depend on the role and firm. Some places like a developer at HRT may require low level systems knowledge whereas traders at Jane Street will play market making games. Overall, for more quantitative roles there are often brainteasers, statistics (perhaps derive linear regression), and some machine learning. More often now, quants are expected to have a solid programming background and will also have whiteboard coding interviews.

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Jan 21, 2019

Did any firms ask about standardized tests? That's how they filter to see if your smart enough for their time.

Jan 21, 2019

Wow dude first of all congratulations! I know how insanely hard it is to receive an offer from even one of those firms, let alone so many of them as an undergrad. I know you said you read on statistics/machine learning and practiced leetcode for the interviews, but is there anything you did during college (clubs/organizations, side projects, research) that you think significantly helped you land those offers?

Jan 21, 2019

None of my side projects are significant enough to move the needle in any way. Having one good internship helps offset the lack of brand name school. Having a few good internships will help consistently land interviews.

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Jan 21, 2019

How do you view your role will be different than a standard dev job? Also what languages will you be using?

Jan 21, 2019

My role involves researching and deploying my own quantitative strategies. Mostly will be using Python.

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Jan 25, 2019

what other languages would you suggest to master, besides python? i am starting to learn python, and some people recommended c++ and R. what do you think?

Jan 21, 2019

You said you did pretty well negotiating your offers. Could you give some insight on how to be effective at negotiating?

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Jan 22, 2019

When I was negotiating, I couldn't in good faith ping pong offers back and forth in a bidding war too many times, especially for a company I was most likely not going to accept. So, I tried to limit as much as possible the amount of times I negotiated with a company.

I first let company show me their offer without them knowing the details of my other offers. Then, I showed my highest offer to every other company. Afterwards, I took the highest from the updated offers back to the original highest offer to see if they could go any higher. If there is an update and the company you want most is not the highest offer, bring them the new highest offer to negotiate. At this point, you've negotiated at most twice with any company which I believe is acceptable. Lastly and optional, if you really feel like you can push it a bit, ask your top company if current + X would be possible and you would accept if they could do it. I have seen a few of my friends do that and be successful though I didn't do it personally.

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Jan 25, 2019

You seem very methodical and effective; thanks for doing this. Just for my curiosity, did you come up with that bidding process yourself?

Jan 22, 2019

Can someone else verify and/or OP elaborate on 250-400k being the range for ~60 seats for quants straight out of undergrad? I know one person who started at one of the firms OP mentioned for >160k base which presumably puts him well within that range, but he was in the top handful out of a top CS program. I know that range is possible; just unsure whether it's more than just genius level, single-digit or so ad hoc cases and there really are as many as 60 such spots available for undergrads.

Jan 22, 2019

60 quants was a very back of the envelope estimate though I do believe it is in the ball park +/- 10's of students. Perhaps 30-40 is closer? Someone else's input would be appreciated also.

I personally know a few quants who will fall in that range next year and I definitely don't think my network covers the majority of people considering I don't go to a target school. Even just looking at larger firms like Two Sigma, Jane Street, Citadel and D.E. Shaw, they each hire a handful of quants straight from undergrad, themselves bringing the total in the 10's of people. If you include new grad devs at quant firms making in this range, the number could be much higher (if you don't just look at quant firms, I have a few friends making 250k even at Google and Facebook). Though for the upper range of 400k, I would estimate that there would only be 5-10 undergrads total making in this much.

EDIT: Every year there's about 80 IMO and IOI gold medalists and I'm sure a majority of these gold medalists can land a job as a quant (though they might not want to or maybe aren't a good culture fit).

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Jan 22, 2019

Based on my experience at a target school, I think ~50 is in the right ball-park, but like you said, it really depends what you consider a "quant". At a shop like HRT you have algo developers which aren't quants nominally (since they have actual quant research positions), but are still paid in the 250-400k range.

If you're looking at any jobs at quant firms that pay first years 250+ all-in, I think the number is a lot higher since these firms tend to compensate devs comparably with quants. Similarly, at these firms there are trading roles that are compensated similarly which you may or may not consider quant (being a trader at JS definitely requires quantitative skills even if it's not nominally a quant role).

As for the 400k and 400k plus range, I think it's probably larger than 5-10. At the very least, Citadel is consistently willing to negotiate to there (unless my friends are repeatedly posting all across the internet) which should bring it to 5-10 by themselves. I've also heard of other firms going there after negotiations, but maybe as more ad-hoc situations.

Jan 22, 2019

Really appreciate this. I am from a target and I landed a summer internship at one of the firms you mentioned, which is giving me Pro-Rated 125k/year as well as housing. I had to negotiate this up to get it where it is. I thought this was already pretty fair, assuming ~100% year-end bonus and some sign-on bonus (assuming I work in this role or a similar one after graduation), but the numbers you're quoting are higher than I expected.

Are they going to up their offer if they give me a full-time to something in line with those numbers, or should I apply elsewhere for negotiation purposes? (Note: the role isn't strictly quant, it's a "quant-trader" role, which does not require substantial CS background, as there are other roles who end up writing most of the code)

Jan 22, 2019

I know of a decent amount of firms that are paying that much for internships so it's hard to say what the full time offer will be like without knowing the name. Different firms are willing to negotiate very different amounts. You can PM me if you would want to talk about your firm specifically!

Jan 22, 2019

Congrats on the offers!

Few questions:
1. Did you find (whether your own experience or your friends') that the interview processes/questions were broadly different for-- devs/traders/research? I understand there are many hybrid roles nowadays, but I'm asking primarily to understand what strengths to beef up for which role interviews.

  1. Seems like a lot of these firms don't look for the mathematical finance bit of things as much (could be wrong). Specifically for the quant trader path, would you say strengths in CS subjects like algorithms etc are better use of time learning than studying say finance inclined subjects eg options?

Sent you a PM as well, when you have the time. Best of luck!

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Jan 29, 2019

Or maybe anyone else here has any insights to share? Would love to get some thoughts. Hard for me to get a good constant ear to the ground since I'm geographically far so this thread is very informative

Jan 24, 2019

How do firms like Optiver, Akuna, IMC, DRW, and Belvedere compare in terms of compensation? It seems like these firms are insanely high

Jan 24, 2019

Belvedere isn't in the same galaxy of compensation.

I've seen DRW and IMC match offers in this pay tier but it's rare. Optiver compensation may be close in a good year. Unclear about Akuna.

Jan 24, 2019

I have seen IMC and DRW negotiate up to 250-300k though they started around 150-200k. Optiver is generally a bit lower. Akuna and Belvedere are the lowest from what I've seen.

Jan 28, 2019

IMC's all-in offer this year was 230K-280K. Akuna's is actually quite high and competitive with the top shops out there, due to the massive bonus you can earn first year if you perform well. The range is 280K-390K

Jan 25, 2019

Congrats for the offer mate! What an achievement!

You think that could be a good path starting in commodities trading to general HF? Or one of those magic funds?
As far as I've seen, all of them have commodities trading (especially Citadel is quite strong on nat gas)

Thanks

Jan 28, 2019

Calling BS on OP

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Jan 28, 2019

Care to elaborate?

Feb 1, 2019

Nah, he's absolutely right on these numbers. My friends 2 years below me got similar numbers.

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Jan 28, 2019

no market experience, right out of undergrad...400k guaranteed? Seems too good to be true, kid must be an outlier genius. if it is, congrats

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Jan 28, 2019

I know for a fact that this is correct for Citadel so I assume that the others are correct too. Not every new grad gets this offer, but it's not a crazy outlier offer either. Yes I also know of experienced people in the same role at Citadel who don't make this much.

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Jan 29, 2019

Yup, 400k guaranteed at Citadel. Though not everyone gets this offer, I have seen the same offer for a few others this year.

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Feb 1, 2019

Correct for Citadel and TwoSigma.

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Feb 1, 2019

Thank you for confirming.

Feb 3, 2019

I mean, it's pretty disingenuous because they're including signing bonuses as "total comp". Actual total comp is like $175-250 then you have signing bonus that range from $50 to $150 (Citadel),

Feb 3, 2019

The recurring total comp ranged from $200k to $300k a year

Feb 3, 2019

Why would you copy and paste what I wrote?

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Feb 1, 2019

Hey quantfin, what were the criteria for making your decision? What job ladder did you end up joining? I was in a similar position 2 years ago.

Feb 3, 2019

I heavily valued the culture of the firm. My picture was built from general things I've heard people say online/in passing, first hand experience from trusted friends, and meeting the employees themselves. I also placed emphasis on growth opportunities at each firm. I looked at where people where leaving to go to on LinkedIn to see the various exit opportunities. Everything else equal, it came down to compensation.

The firm I ended up choosing treats their employees extremely well and has a very collaborative culture. To me, it's not worth getting paid more if your entire life is work and you dislike it. Would be happy to go into more details over PM. Curious to hear which decision you ended up making too!

Feb 3, 2019

What did you study in college? I'm a senior in HS and am mostly likely going to a non-target, and then transferring to a target second or third year. Looking at options I have an whatnot. Sounds like you did a lot of great networking in college.

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Feb 3, 2019

I'm finishing up my degree in CS right now. I didn't do too much networking in school, most of the people I met were during internships over the summer. At least for quant finance, your network doesn't matter too much. Firms will hire you if you are up to their technical bar. A lot of the firms I interviewed with I simply applied online. Once you've had one or two good internships, most places will want to interview you. Though, opportunities does come much easier to those are target schools. They will have a lot of on campus recruiting and sometimes very small firms will only hire from target schools.

Feb 7, 2019

How do HRT and Old Mission compare to Jane Street?

Feb 9, 2019

They are all high quality firms. I actually think Old Mission's founder came from Jane Street. Can't go wrong with any one of those though they are quite different. Jane Street is the largest with ~1k employees now while HRT has ~200 and Old Mission has fewer than 100. HRT focuses on HFT while Jane Street is big in market making.

Feb 9, 2019

could you list out, in practical terms, what knowledge is needed to grab one of these quant dev roles?

i'm self-teaching myself machine learning (mostly neural nets) in Python from a variety of online resources (which are surprisingly good). I took a few CS classes in college (C++, object oriented design, databases, operating systems, basic hardware design) but was an econ major (so, no CS degree). College was ~20 years ago, so i don't remember all of it, but enough to be basically literate (and i worked as an Excel VBA programmer for the first few years of my career).

Coming from a semi-technical background, if i wanted to learn the skills to grab one of these 300k-400k quant roles, what exactly would i need to learn?
Which math/programming/algorithm concepts are really necessary?

just google it...you're welcome

Feb 12, 2019

Jesus fuck dude $400K? Why would anyone pay a recent grad that?

Feb 15, 2019

Definitely feel like I shouldn't be paid this much but I'm not exactly complaining.

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Feb 15, 2019

Yeah dude facts. Congrats on getting these offers, that is a mindblowing amount of money. Have fun with it :)

Mar 6, 2019

Do you know what recruiting looks like for people who are out of school? I'll be going to a top tech company as a dev, but my ultimate goal is to get into a quant firm. The thing is that it looks like most get hired either as new grads or new PhDs.

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