How Important Is Math and Mental Arithmetic

Hey Girls and Guys,

I am a Finance Major at a non-target to semi-target.
This summer, I will be an S&T summer Analyst at one of the BBs.
My Problem is that I am not very fast at mental arithmetic questions. I can do them in an average time frame, but, not super fast enough. I am very comfortable with mid-level math (Calc I-III, Differentials Equations, Proofs) as I have gotten As thus far in all my math courses and hope to continue doing so.

(1) How can I improve the speed of my mental calculations to speeds necessary for traders?

(eg 84x27 takes me roughly 30secs and probably a bit more if caught off-guard)
Easier questions like some I have gotten before in interviews 5^4 and 16x14 took 2-8 seconds

Comments (17)

May 6, 2019

bump

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    • 1
May 6, 2019

Unless you work at a prop shop/market making firm, not important

Most Helpful
May 7, 2019

It is most important in interviews, and only when the interviewer is one of those types who asks mental math questions.

    • 3
May 7, 2019

suggest you go learn VBA right now...practice building spreadsheets that do something. move data around...use loops to implement some logic problem...build a word scanner and implement a diffusion index to characterize an FOMC statement or Philly Fed vs previous versions. These might not actually be useful, but you'll learn VBA skills that are useful

just google it...you're welcome

    • 1
May 8, 2019

how long does it take to learn VBA from scratch?

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May 27, 2019

Depends also on your Excel skills, and if you are at least a bit used on programming (general conditions eg IF and so on)
I would say that overall though, is not that long to learn most important things
There is a nice YouTube channel called WiseOwl that teaches you the basics, is quite good and for free. Check it out

    • 1
May 7, 2019

the competency you described is easily adequate. agree with the poster that said learn VBA and data manipulation. don't stress yourself out about the math. you're fine. get some experience with programming and database R, SQL etc

    • 1
May 7, 2019

i'd recommend "The Secret of Mental Math"

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    • 1
May 27, 2019

Very good book indeed

May 17, 2019

there are few prop shops that are antiquated and ruthless for filtering based on mental math. beyond those few, even if you get some mental math qs wrong, it isn't a dealbreaker anymore if you have a compelling background and relevant skills. def helps if you nail their trick questions about stats, programming and markets - all of which are arguably far more relevant.

this may be surprising to some prop shops, but we don't trade in the pits anymore. knowing hand signals and being able to add up fractions quickly doesn't provide any advantage to a trader.

    • 1
May 28, 2019

Thanks, everyone for the advice!

I have some programming experience as I was introduced to it in high school and understand programming logic I guess. I tried VBA, however, I could not find anything useful to do that I could not otherwise by using core excel. Any help in generating imaginative cases for which VBA will be an asset?

May 28, 2019

It is useful for manually hedging options trades.

Aug 2, 2019

There is no way to actually know whether someone is smart once you get the job, so people learn to flex as a means of displaying competence. A lot of flexes are weird flexes, but an accepted flex is useless displays of mental math ability. There then becomes a culture of uselessly displaying mental math ability, regardless of whether it improves investment performance. Interestingly, my own finding is that stocks do not tend to go up depending on your ability to calculate numbers in your head; that said, many seem to firmly believe this is the case.

As a result of this phenomenon, people start to believe mental math ability is somehow important as part of the job and so it is used as a filtering mechanism. It is stupid and useless, but it will not be removed from the culture of certain firms.

    • 1
Aug 2, 2019
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