A Master Quant here ... Ask me anything
What are some good resources to learn things that are need to know and good to know if you want to work in this area?
In Battle to Recruit New Quants, Hedge Funds Outpay Banks
21–30 of 57 posts
Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#22Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#23A Master Quant here ... Ask me anything
Do you leverage Deep Learning / AI? How successful if yes?
Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#24What does a quant do? Machine learning, linear regression, moving averages? Lots of statistics on time series data?
It's a very wide category, but all those things could apply. I used to be a partner in a couple of funds, and at the time the major distinction was between people who priced complex derivatives and people who thought about how to use data to guess what the market would do. You'd be more likely to find deriv quants at a bank selling such things to people, whereas the strategy quants would be what you'd find in the fun…
> It's a very wide category
The term is historical, not functional.
Before option-pricing theory, securities pricing was an art. Yes, there were capital asset pricing theories for fundamental analysts. But at banks, a phone and hustle were the tools of the trade.
With Black-Scholes (and put-call parity) came the ability to (a) manufacture options out of other securities and (b) print objectively-wrong quotes. The former gave banks an incentive to build the business. The latter gave them the incentive to automate. The people they hired to do that were quants.
The first generations of quants automated option-pricing models. Through the 80s, they found themselves involved in more products, e.g. securitised loans and mortgages. By the 90s, they were launching funds. Today, almost everyone on a modern trading desk is a quant to some degree.
Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#25Earlier quoted context omitted.
Furthermore, what is a good way to become a quant?
The type of quants talked about in this article probably has a PhD in math, stats, CS (with a focus on machine learning), or something similar.
This particular article is about MFE students from one school, but hedge funds love PhDs too.
Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#26Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#27Is Financial Engineering still relevant these days? I thought it is all Data Science now.
Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#28> recent graduates working at hedge funds made significantly more than their peers working at banks This has always been true, for the entirety of my career. Buy side pays more than sell side for alpha-generating activities. (Sell side pays more for flow and scaling advantages.) This article strikes me as a submarine [1] for Baruch’s program. [1] http://paulgraham.com/submarine.html
Is "submarine" just "Trojan horse"?
Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#29Quant here. I used to be a seismologist but switched to finance one year ago. This year I earned well below 100k€.
Re: In Battle to Recruit New Quants, Hedge Funds Outpay Banks
#30Not going to fight the paywall to read the article, but as a developer consultant (not a quant), hedge fund clients pay better across the board than both commercial and investment banks. They tend to be small shops, so it's not really a fair comparison. I've worked for boutique hedge funds, market makers, wealth management funds, pension funds, and two huge investment banks. The small hedge funds pay a lot more and the work is more interesting and less bureaucratic. Just my anecdotal take.