Systematic Trading Firms, or “Quant Hedge Funds,” are becoming more and more popular. And with their success in the financial markets comes a surge in demand for professionals who understand complex mathematical models and ways to enhance them to generate profit and reduce risk. Today, thousands of Ph.D.’s employed by Quant funds are working at rapid speeds to create new algorithms that will help businesses across industries solve complex problems.
You may already know that the demand for Quants at Hedge Funds is trending up, and there are no signs of it slowing down. But what you may not know is that you already have many of the skills required to become a Quant. So, Quant are you waiting for?
QUANT TRADING STRATEGIES ARE HOT & COMPANIES ARE COUNTING ON YOU
The high demand for Quants is driven by several trends, including the growth of hedge funds, the increased complexity of the financial market, and most importantly, the popularity of quant trading strategies. Traditional discretionary trading methodologies take longer to materialize than high-frequency quant strategies. Here are three “hot” strategies that are trending in popularity:
1. Arbitrage: Arbitrage has economic benefits that are well understood and have been documented by academia. Companies that are still competitive in arbitrage reap the benefits of scale, speed, or queue position over other trading firms.
2. Market Taking: Market Taking is a strategy that places a marketable buy or sell order to profit from a predicted price change.
3. Market Making: Market Making is when you post passive non-marketable buy and sell orders with the goal of profiting from the spread.
As a Quant, PMs and Traders are counting on you to know these strategies inside out! Quant roles rely heavily on statistics and mathematics to analyze all of the available data to develop and implement statistical models. Then, using these quant trading strategies, you'll be equipped to solve business' problems surrounding their risk landscape, investment decisions, complex financial choices, and more.
WHAT DO QUANTS DO & WHAT ARE THE BENEFITS OF BECOMING ONE?
In a 'typical' established quantitative trading company, the departments are often broken into Strategy Research, Core Development, and Back Office / Operations functions.
While the group you begin your career within is generally where you'll stay, there are several titles to choose from. Typically, these firms will hire for a variety of job titles in the Quant space, including Analysts, Researchers, Developers, Traders, and Strategists. Keep in mind, though, Quant roles often entail a blend of skill sets and responsibilities, so job descriptions may show overlaps between titles.
Regardless of the Quant role you choose or the department that role falls into, this career path has many benefits.
It’s financially rewarding.
Quant roles tend to yield a high salary. Compensation for an entry-level Quant stands at an average of $175K plus bonus. Imagine what you’d be making with some experience under your belt! Hint, hint… a lot. Just like other career paths, the key to landing high-paying Quant jobs is a resume filled with transferable experience and well-known employers who can vouch for you in referrals.
It’s intellectually rewarding.
Quants have the intellectual ability and willingness to master complex and abstract mathematical domains. Paired with a fast-paced and sometimes intense work environment, this can make for a challenging yet rewarding job. You'll get to solve problems that most people can't and celebrate when you conquer the seemingly impossible!
There’s little bureaucracy.
Quants typically don't read annual reports, attend time-consuming meetings with management, prepare roadshows, or talk to shareholders. Put simply, there’s little to no bureaucracy within Quant funds. This leads to a faster turnaround and feedback loop for ideas being implemented - and less headache.
Potential for a Visa sponsorship.
Most Quant funds offer a Visa sponsorship to those who need one. The more value you bring to the firm, including skills, education, experience, certifications, etc. - the more likely the firm is to sponsor your Visa.
Potential to work remotely.
Like many jobs amid the COVID-19 pandemic, some Quant roles have gone fully remote. Now, Quants get to choose! Either go into an office or work from the comfort of your own home. As you search for opportunities and speak with Quant Recruiters, simply ask about the company's policy regarding work from home.
APPLYING MATH & PHYSICS SKILL SETS TO YOUR QUANT ROLE
Have your textbooks at the ready! Individuals with strong analytical, financial, and mathematical skills are valuable in many different areas of finance, and the Quant space is no exception. Bringing a background in Quantitative Physics or Mathematics could almost guarantee you a job at a Quant fund. Software skills are also critical to your job performance. In fact, C++ is regarded as the most important Quantitative Analytics tool. Additional programming languages utilized in Quant roles include Python, Java, SQL, .NET and C#.
To wrap things up, a Quant’s success is based mainly on knowledge, talent, and dedication instead of their ability to sell, network or play politics. If you’re an entry-level Quant or considering becoming one, I have one piece of advice for you. Try to master at least one object-oriented language because experience in just Python is not enough! Proficiency in an object-oriented language will help you stand out in a very competitive talent pool where landing a high-paying job boils down to skill and experience.
