Quant Skills in S&T vs. IBD?
I want to know the level of quantitative skills needed for a career in Investment Banking vs. S&T. I've only taken introductory finance and accounting classes, and I haven't focused much on quant skills, with my Economics (mostly qualitative) and Rhetoric degrees. In that vein, what classes/ books would you all recommend to hone these skills?
Actual examples of quantitative work on the job would be appreciated.
Also, are sales and trading bundled together? Or are there people who work specifically in Sales, and others in Trading -- if so, what is the level of mathematical skills needed for the positions?
So some searches on this website for what is done in sales and trading. Basically, there is quantitative work for sales and trading in the more complex products like derivatives (especially if you are structuring those products). In general, S&T requires you to be good with mental math. The more complex instruments require a greater level of detail.
IBD is basic finance and accounting principles with the four statements and calculating enterprise value with excel. Simple math (some structuring if you do capital markets, but not overly quantitative)
In terms of math, investment banking requires not much more than arithmetic. S&T ranges from fast mental math on a cash equities desk, to multivariate calculus, finite math and stochastics on one of the many fixed income derivatives desks, to PhD level math including proofs on exotics desks (especially commodities and FX). Derivatives and exotics desks employ significant numbers of quantitative PhDs (math, physics, economics, engineering) from top institutions as trading desk heads and as traders, not just researchers in the back. Whereas the number of quantitative PhDs in IBD is far lower (I reckon hardly any).
If you want examples of the math used on derivatives and exotics desks go to the library and look at Hull (Options Futures and Other Derivatives) and Taleb (Dynamic Hedging).
Sales generally requires less math than trading, but even in sales you need to at a minimum be able to understand and roughly price the products that you are selling or you're kind of useless.
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Junior Level - IBD more Quant
IBD - You make pitch books and models.
S&T - You book trades and pay attention.
MD Level
IBD - These guys are deal makers, almost all sales. Really not quants, just ballers.
S&T - Quant traders exist. They are math and finance Phds. Regular traders also prob look at a distribution or two. Also consider buyside. Very quant driven with portfolio creation and individual firm analysis.
Haha IBD is not more "quant" at the junior level. If you are on any type of derivatives desk, and in particular options/swaptions, you deal with many times more complex quantitative concepts and analysis than IBD.
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