BAML Front-office quant vs Prop Shop Trading
Hey guys,
I have two standing offers: BAML Hong Kong front-office quantitative development work. They are paying the usual 100k with no bonus and as you know the taxes in HK are very minimal. The job is not a structured graduate program but there is a learning curve and they said I will learn on the job.
The second offer I have is from a London based prop shop. It is not Jane Street/Citadel but maybe a tier or two down. They are paying 40k pounds as base. The bonus is open ended. The information on glassdoor says that the prop shop pays around 250k pound total compensation but I guess this number goes up and down depending to the trader's profits. They have a structured graduate program and seem to really take care of their new employee. They apparently have this graduate program for 20 years now.
To be honest, I don't really have a preference for either trading or quant work. Trading seems to be stressful and, from what I have read in WSO, it seems that they fire anyone who doesn't perform well enough in a couple of months. On the other hand, the trading job is in London and I would be looking forward to move to Europe. As I have done quant work before, I know that it might get boring sometimes and it doesn't have the thrill of trading.
I really don't know what to do. Some people I spoke to told me that you can always go back to quant work from trading but the other way around is very difficult. On the other hand, BAML is an established company and my chances of getting fired is pretty slim compared to the prop shop.
Note: I also have a standing offer from Imperial Msc Financial Technology which I deferred.
Any idea on what I should do?
I am not in your position, but as an MFE student, I’d go for the quant work in HK.
BAML rarely fires it's employees. So you're I'm pretty safe rounds. You need to consider the age factor. You can go back to BAML later too if you're years under your belt. As the London based prop shop is offering a graduate program which definitely helps your learning curve, I think it is better as you can risk in the early stages.
I'm a risk taking person so this is my POV. So all the best on what you're choice is. Btw can you provide insights on the quant work - what did you do earlier and what are the skills needed for the same, your career/learning path on quant. I'm looking at quants but pretty confused between quant trading quant research etc.
Thank you for your reply. To be honest, I was leaning towards the same. I feel like I can take this risk as I am very early in my career (or I guess no career in case of a prop shop trader).
I am coming from a STEM degree and found it easier to switch to trading by first interning in quantitative analysis positions. I also feel like the line between programmer/trader is blurring. Both the senior and junior guys in my current firm know Python and Statistical Analysis on advanced level even though 95% of their time is trading and fine tuning algorithms. I don't know where you are at your career but I think, as a fresh graduate, interviewers really care about how much you know Python/R and if you can throw out one or two time series prediction models (GARCH, ARIMA), you will sound like you know what you are doing. Most of the undergrads only talk about their math/stats courses and trading experience that they don't have, so it's actually not difficult to be differentiated if you are really interested in the field.
Since my major was not even CS or Math, I had to distinguish myself by working on personal projects. I took one or two online algo trading courses, studied some quant fin and learned all those formulas (it's easier than it sounds!). All these little things helped me in my interviews (I probably had around 100 of them but all it took was one offer to save my ass).
About quant research vs quant trading, I am not the most experienced person to ask but they are very different in terms of work, stress and compensation. As a quant trader, you are a trader at the end of the day. You eat what you kill and your comp is based on your profits. You will make use of algorithms (statistical arbitrage, etc) to trade and fine tune your algos. If something goes wrong you gotta be smart enough to figure out what's wrong and fix the algo/inform the algo dev group. On the other hand, quant research is more similar to academic work. Basically, you spend most of your day reading research papers, books and try to implement the solid ideas in Python/R. If any of these strategies are promising, you focus on improving them (as nearly none of the public strategies will make you rich). Once you complete the algo, the dev team takes up the work to switch the Python code to C++/Java or whatever low latency language they use. Your comp is usually fixed.
One thing that definitely helped me was interview experience. Just go to any quant/trader interview you can, even if you don't want the job. They always ask the same things. My interview experience with Jane Street definitely made me more calm for the following interviews as I kind of knew what was coming. I solved bunch of interview questions (check glassdoor) and genuinely showed interest.
This is my humble opinion as I am talking only with only a couple of internship experience.
On a more personal note, the internship I had was very low pay and no future however it was relevant work. If you focus on working hard and have ambitions to catch the opportunities that come up to you (they always do), you will land any of these jobs people talk about in this forum. Good luck.
Can you suggest some good algorithmic trading courses as you're already familiar with good ones.
CFA will definitely help you. All my friends in BB talk about how important it is to get CFA, even if you've already broken into the finance world. Especially, it will be pretty handy to talk about in the interviews.
I took this course. I think the instructor is very clear on what he is teaching. Also working in a hedgefund as a quant intern, I found the course material very correlated to what I do in here. This will be a good introduction to the various technical indicators, strategies and performance measurements for you.
I would also recommend the books by famous quants such as Ernie Chan and Marcos Lopez. You shouldn't read the whole thing (I mean if you have the time and commitment, this shouldn't stop you), but just skim through some of the analysis methods these guys use. You can do some online research and find applied versions of these theories. If I were to be you, I would definitely do a project on volatility trading with GARCH on VIX. This will look sophisticated on your CV and interviews, contrast to what everyone else does.
Lastly, you should take a look at some Python backtesting frameworks such as pyalgotrade or backtrader. These frameworks will help you create realistic market environments to test your algorithms. Again, something that will add value to your job applications and interviews.
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