Quantitative Research vs Trading
How does a career in quant research differ from that in quant trading? I had never considered quant research until recently and was wondering if anyone currently in the field could comment on lifestyle, compensation (vs trading), exit opps., etc. I'm particularly interested in hearing about working in the prop trading environment as opposed to a bank.
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Researcher -> trader is a promotion in a lot of quant firms. You start by making signals then you manage risk.
I think in the HFT arena, quant researchers spend at least half of their time doing data cleaning.
Look for a good trading firm that has their quantitative traders and researchers working together so that they're basically indistinguishable apart from their titles. What you don't want is to be at a place that gives all the glory (read bonus) to the traders even though the quant researchers did all the work
You should ask this question on quantnet.
Trading: Quants VS NonQuants (Originally Posted: 03/08/2011)
Ibankers/Researchers/ and Sales people defiantly need to be decent at math to some extent but no where as close to traders. If your even thinking about going down the trading route in the future is it more or less mandatory to have a degree in either mathematics or financial engineering in this day and age?
I know the majority of financial engineering graduate programs want you to come from a quantative background as there extremely math intensive but what are the odds of a liberal arts kid getting into such a program. Would banging out a high score on the quantative section of the gmat help in some cases?
tons of trading gigs where you dont need to be a math/compsci grad
although I think you do have to be able to think and reason with maths in an intuitive sense pretty well.
Jerome Marrow or Brady4MVP may be good people to talk to if you want to go into trading from a liberal arts background. Both of them are prop traders with English and Sociology degrees, respectively.
Trading is a tough job with lots of stress. Working on the trading floor, you can tell who was working as a trader back in September 2008. There are people in their late '20s going around with lots of gray hair looking like they're 40. Heck, even us friendly desk developers with relatively lower stress jobs age faster than our west coast counterparts.
Yes. However, the median score at most of the Top 10 programs is an 800, indicating that at least 50% of students got a perfect score on the quant GREs.A Math GRE II score might be a good substitute for a quantitative background- you'll want to be able to get a 700, though a 750 would look really strong. You'll still need to show programming ability, too, for most programs.
Bang out a 650V/800Q on the GREs, a 700 on the Math GRE Subject test (The Princeton Review has a good book), take a CS course, get three strong recs, including one from a prof in a quantitative discipline, and we'll talk some more.
There is little pure maths needed in trading. You think the theoretical crap you learn in a math degree is useful when you trade?
No. I think Ring Theory and Group Theory isn't very helpful for trading. However, you need to study it to get a 700 on the Math GRE Subject test to prove you can do probability and calculus to a grad school.
Theoretical math is useless in 80% of situations in trading. I would give a higher number, but I know somebody from some weird q group or CDO trading group is going to tell me about some time that they applied it and prove me wrong.
I work with structured products, the pricing models are very complex and require some very high level math. But the quants do this, the structures and traders just have to know how to use the models which normally requires plugging in numbers.
Lol, like Gaussian Copula which they used in structuring credit derivatives, now they realized they lost their job because of that... They made money before because they fooled people into believe the assumption they made, not because their model is so good...
K, let's clear this up. Researchers need more math than anybody. For traders, you don't need to know that much maths. To gain complete understanding in derivative pricing you need to know measure theory, real analysis, stochastic calculus, stochastic control, I can tell you those things won't help you trading at all. While knowledge about pricing a derivative is good to know, but it won't help you trading. Say you can price most nasty exotic derivatives that no one understand, it won't help you, cuz you won't find liquidity for such thing. So it won't help you trading, not in the normal sense of trading. So called "quantitative traders", are just computer programmers with some knowledge about the market. You will be coding all day. Most strategies they use are statistical arb, market neutral etc. which in my opinion are not interesting. So think again if you want to be a quant.
this
Whats wrong with statistical arbitrage in your opinion?
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Higher level math is not needed (or even beneficial in most cases) for trading.
You hit "the green button" to BUY, the "red button" to SELL. Thats it.
Don't need an engineering degree for that. OP this question has been asked 20 times before and covered on here.
To OP
What are you trading and what type of trading are you doing? It seems to me that you're lumping all products and strategies together, which is fucking retarded. I have a friend who's a military jock, prop trades equities all day by following charts, and barely knows calculus. On the other hand, I take classes with MSFE indian and chinese nerds, many of whom go into algo trading/electronic market making, using advanced statistical methods. Traders spans the whole spectrum...
Trader vs Quant in HFT (Originally Posted: 11/13/2010)
I recently got an offer from a HFT firm, which allows me to choose between a quant trader vs a quant analysis.
I wonder in HFT, what is a more dominant factor in decision making? Forgive my ignorance, all I know about HFT is that there is a machine that automatically runs to trade. If so, looks traders are just monitoring the execution of trading strategies. I am afraid that as a trader won't learn much about the strategies, if all strategies are written by quants.
But I also heard that quants can just be people who run errands for traders, like analyze some data traders want them to analyze. Is that true?
I am particularly concerned of how much I can learn, in trader or quant positions, as well as the exit options.
Ask them? Maybe ask to do a shadow for a day and spend some time with each and figure out what you like more.
I would also add that I would find out who gets to make commission and who gets straight salary (I would bet that the quant would probably get straight salary and the trader commission but I don't know). Depending on your risk preference that could definitely affect your decision.
Hi guys, Thanks for your reply. In terms of exit options, which one is better? I am particularly concerned of how much I can learn, in trader or quant positions.
Chances are if you applied for and were accepted at both positions (assuming you aren't inept) and don't really know, we don't either. From those descriptions its hard to tell, this is honestly something you should talk to the company/people who work there about, albeit in a more subtle manner.
Can you give a brief on your background?
Just wondering what it takes to get into these crazy firms today, one of my friends an EE grad is trying to.
I'm also trying to break into S&T right now, so any tips from somebody who got offers would be great.
Quantitative research positions (Originally Posted: 06/07/2014)
I saw some of these positions posted for trading firms. They stated that they prefer master's and phd candidates, but will take exceptional bachelor's degree candidates. How would a position in quantitative research differ from trading, and what should you do to stand out with a bachelors?
"Quant Research" is essentially very advanced statistics and occasionally model derivation/tweaking. For example if you were in an options trading firm as a quant, you may have to verify and calibrate parameters in existing pricing models as well as experiment with better models.
Bachelor's recruiting for these positions usually requires a top 5 CS/Math education and even some extra stuff like strong Putnam performances. A quick stalking trip on linkedin will show you that a lot of these guys at Two Sigma, Tower Research, DE Shaw, etc are from Harvard and MIT with top 400 Putnam placements.
Whats wrong with completing your Masters first?
Quantitative Research (Originally Posted: 09/29/2011)
I have an opportunity to join an equity quant research/strategy group at a BB. The role would involve building multifactor models across all stocks using investment styles / various metrics and writing research reports. Does anyone know anything about where this career path leads? What are the exit ops?
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