Is QUANTITATIVE RESEARCH The Best Job In The World?
It's been a few months since I joined WSO and I still don't get why so many here seems to be in love with Quant-HF? I've been hearing more and more about "quants" and how some of them make 250k-400k straight out of undergrad and how it's so many people's "dream job."
So why are quant guys the smartest people in Finance? If I'm good at programming and good at math, then is this the career path I should be trying to go for? What are the downsides of being a quant?
All I would like are some opinions (even if you've never been a quant) and experiences.
seems pretty straightforward to me..
The only downside I see is needing to go for the PhD route.
I for one love math and abstraction, but there's no way I'm going back to school after finishing undergrad.
I'm somewhat of a sell side quant.
First of all, not all quants are the same. There are so many different types and their compensations while very good are all different.
Are i-bankers the same as S&T people? NO. Are M&A bankers the same as leveraged fin bankers? NO. Same in the Quant space
I have some friends in all these different types of quant fields so I can say the below with some confidence.
3 groups - Quant Traders: You mostly see them in prop shops and HFs. Quant trading does not require an advanced degree. Just really smart and mathematically gifted undergrads will do. Top shops like Citadel and Jane Street are willing to go up to 250-400K TC for kids fresh out of undergrads. But for the middle of the pack, it's more like 100-200K.
They're still traders. They eat what they kill. Can't hunt anymore? Well, you're gonna get fired... But that also depends on whether your shop's PnL depends on each trader or whether they're just using you for your expertise in trade execution (all the creds go to researchers)
A) Sell-Side quants. These guys are the least paid quants IMO (100~200K). Typical stochastic calculus stuff... If you consider AI and machine learning researchers as quants then that too... Very heavily involved in risk management.
B) Buy-Side Quants: Used to be just crazy smart mathematicians, physicists, computer scientists, OR PhDs getting making boat loads of $$$$$. Nowadays, the bar is getting lower to include decently smart FinEng Master students and some exceptional undergrads.
Your comp depends on your shop. Are you doing alpha generating work? Then expect high bonuses. Are you doing work that any decently smart person could do? Still good money but how will you advance your career?
Realistically, you need an advanced degree to advance in these positions. It's a research role. The best quant researchers are often published authors who have made significant advances in their fields before joining the dark side. Have you heard of RenTech?
Thanks for your response. Do you think Quant-Funds are still a good long-term-career? I've heard stories of people doing quant now when they won math Olympiads during high school, I thought my math skills were up there when I realized what some other kids have accomplished a lot more with math. How do I know of I have the math skills necessary to become a Buy-Side Quant(Researcher)?
I'm not a buy side quant so I can't speak much to the prospects. So let me give my opinions.
1 thing I did notice is that lots of funds are turning into quant funds and lots of new funds are showing up. The job market is definitely growing. Idk if the supply is increasing faster than the demand in the quant job market. But unfortunately, I do know that Quants are becoming commoditized. Competition is only going to increase.
With so many people straight out of FinEng masters from God knows where, Quants are becoming more replaceable. Think of software engineers. They get paid very well. But there are lots of them. Only the best ones advance in their careers. Unless you get better and better, no career gives you good long term prospects. Being a quant happens to pay very well even for the least talented ones.
Back in the days, people became Quants accidentally. 2 cases I could think of. 1) Handful number of non-finance PhDs one day realized, hey lots of these financial data looks like they have a pattern. I want to start analyzing these and see if I can make money. 2) Couple of finance PhDs realized on day that there are certain phenomenon in the financial markets and they started studying it with quantitative methods.
Now that people heard that Quants make money everyone wants to be one. How do you differentiate yourself then? Soft skills that STEM people don't have? Superior research skills? Being a creative genius?
Interested to hear where you'd put sell-side algo quants i.e. in systematic market making, or execution algos; sort of Hans Bueller type work, rather than less-hands on pricing /modelling (where most of the stochastic calculus seems to live). Won't always have a mandate but I've heard of some getting mandates.
I'm neither so I really don't know. (Again, I'm sort of a sell-side quant. Only because I work in finance and use do lots of advanced quantitative techniques). But I heard those algo Quants working at trading desks do very well in terms of compensation. I also heard that there aren't many.
Not enough demand? Not enough supply? I have no clue
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