Hi all. I’m a rising senior, majoring in electrical engineering. I always thought I just wanted to do engineering because it looks good on the resume and it teaches you a lot of valuable skills, not necessarily because I wanted to become an engineer. I did an IB summer internship and I really hated it. After a bit of research, quant/quant trading roles seem more appealing to me. Is it possible to make this transition given my background and experience? Recruiting for new grad jobs right now.
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It’s definitely possible, you just need to prepare a lot and reach out to people (alumni, recruiters etc.). There’s a distinction between quant researcher, quant developer and quant trader. The first is a lot more stats heavy so even though you may get responses for interviews, it takes a lot of time to study all the possible statistics and math concepts they could test you on. Quant developer is less stats heavy, more software so requires a stronger coding background. And the final one is likely slightly less quantitative than the other two but still on a similar level. It also depends if you want to go into a quant role at a bank or a fund. @quantGuru will definitely have more tips for you!
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I think our @financeGuru did an excellent job explaining the different quant roles that you can aspire for in the financial industry. Let me follow up with some personal experience, hoping to provide more insights. I would like to start by the distinction between sell side and buy side quants. Sell side quants usually are mostly (although you can do algo market making in banks) derivatives quants (or Q Quants, where the Q stands for the risk neutral probability measure), as such these roles are interested in providing stochastic models to sell side traders. These stochastic models are used to price sophisticated payoffs for clients (think big corporates with huge transnational notionals) usually over the counter. Depending on what role you will be doing in such set up, you can be asked to develop complicated models, maintain and enhance the infrastructure or trade and hedge these payoffs (an exotic trader is one of the most quant jobs one can do in a bank imo). That being said, let us come back to your premise, buy side can be decomposed into two different things:
- market making: Jane Street, IMC, Optiver, Citadel Securities and so on. Banks also do this FYI, but not at the same scale and coverage you can imagine.
- hedge funds/asset managers: these are market takers, they have alpha strategies and they act upon them. Think of Bridgewater, Citadel, Point72, Renaissance and the list goes on.
Quants (sometimes designed as P Quants, where the P stands for the physical probability measure) here are responsible for designing statistical models for volumes, prices prediction, coming up with signals identifying trends and dislocations in markets that can be made profitable in a systematic fashion. Hence, as well phrased by @financeGuru, the roles tend to require a decent statistical knowledge, especially for the Quant Researchers. Quant Developer are actually more of Software Engineers in a big tech company, but with an important emphasis on infrastructure and so on, if you like coding this is the definitely a good place to be as the pay can be huge for outstanding talents. And finally, a Quant Trader is actually more involved in trading those signals, scans the market for bigger dislocations and regime changes, manually intervene if necessary if he/she thinks the algo is missing something. The Trader is actually the one making risk decisions and this can be, depending on your personality, either very stressful or very rewarding if you are into that.
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