Why would anyone want to have a quant career instead of a trading one ?

Hi everyone,

This is my first post on these forums, so please be kind.

I potentially have an offer from a prop trading firm for a trainee trader position. With a physics, maths and compsci background (recently completed my PhD in artificial intelligence), a lot of people tell me that I should go for a quant job in the City being a "rocket scientist". However, from my understanding of what it takes to be a quant (ie sitting in front of a computer, programming algorithms 10 hours a day and doing financial maths the rest of the time), it simply does not appeal to me... it seems like a much hyped career to be quant analyst. The basic salaries can be around £60-70k plus bonus. This is reasonable money but for what is required of your skills/expertise (superb c++ programming skills, strong maths, stats, various other IT skills, databases, etc., etc., etc.) it seems like a lot of hassle for a much lesser return on your academic and time investments.

So I am asking this question rhetorically - if someone had the choice, why would anyone want to forge a quant-fin career when being a trader (where every minute and decision potentially makes you money) is so much more satisfying and seemingly rewarding ?

I assume most traders of some worth (whether at an IB or a prop firm) easily make more money than most quants ? Am I thinking along the right lines ? Your viewpoints would be much appreciated.

I'm not sure your impression of what a "quant" does is entirely accurate. (The same may be true for your impressions of the daily life of a trader.) This holds for most people here, who don't have any experience doing one, the other, or both. You should investigate further and gain some firsthand knowledge before committing.

jj

I think you may have your remuneration numbers a bit off. A quick eyeball through efinancialcareers.com and quantfinancejobs.com puts basic wages between £150-500k often plus bonus.

If you have a brain the size of a planet, like maths and computers, its probably one of the best jobs going for you.

Prop trading is obviously a completely different tack. Sure, you're your own boss, make your own decisions etc, but trading isnt always satisfying and rewarding. It can also be a grind, boring and incredibly furstrating if the market or the other participants dont quite do what you'd expect or want.

For some, bringing home £40k a month without having to punch any screens might be exceedingly attractive.

I think your question is a bit like "Why would anyone become a doctor when they could be a lawyer?" or "Why would anyone like strawberry ice-cream, when chocolate is clearly the superior flavour?"

Different people like different things, and while there are similarities between the skills required for traders and quants, they are two different jobs. Judging by your post, you're probably more suited to trading, even if you are capable of being a quant, just because trading is so much more appealing to you.

As Mathemagician said, you should look into it more to see what the two jobs are really like. Don't become a quant just because people tell you to though.

Thanks for all the replies - I suppose it does depend on one's temperament and motivations. For example, I had a call from a recruiter for a potential interview with one of the big European banks for a "quant" position. The recruiter came up with a list of all the "skills" that I should have for a fair chance of getting through a first interview - I swear, even a reasonably experienced professor of computing science would be hard-pressed to be as versatile as the candidate they were looking for. And I've been to a couple of such interviews - one was with a hedge fund. 5 hours of tests on financial mathematics, programming this and that, questions on financial mathematics, then brainteasers with stupid questions ("if an ant was walking along the edges of a cube, what would be the shortest route from A to B, blah, blah...") and finally, 45 minutes of me giving a presentation on my PhD work with video-conference links to various offices with the directors/managers. All that faff for a basic of £50k and a pat on the back, when again, as a talented trader, one can potentially make much more. (I didn't get the job....)

Arbitrageur said:

For some, bringing home £40k a month without having to punch any screens might be exceedingly attractive.

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I find punching my screens the most rewarding part of the day :cheesy:

Tree,

On a bended knee.

On the basis that a PhD can be completed by the age of 24-years, and to walk into a job with no experience that pays £70k+ (or £150k according to Arbitrageur), is it such “a lot of hassle for a much lesser return on your academic and time investments” and a bad deal given your “superb” skills? Have you applied to God – he may be looking for someone to replace Gabrielle.

“if someone had the choice, why would anyone want to” offer you a position? Luckily, “humility” and is not part of the criteria.

Grant.

You misunderstand the point I was trying to make. I've got some degrees, including a PhD - big deal. I worked hard for them. The point I was making is that to get into some of these quant positions (as per my hedge fund interview example) they really do squeeze you for every drop of knowledge you have. It is the IB's that think they're Gods when normally they expect so so much for an entry-level associate quant position that pays "only" £70k a year when you can have fun being a trader and make more and have the freedom. That's how I see it.

TreeTox, nothing any of us says means Jonathan Q. Squat to whether you'd enjoy trading or quanting more. You seem a smart chap so figure it out and do whatever you want. Just beware of committing based on outside appearances and first impressions. Not all that glitters is gold and not all that is gold glitters.

jj

P.S. Arb is correct about the compensation level for quants. Most quants I know (including the quant jobs I've been offered) trading a pretty substantial book with a mid-six figure base, bonus structure, and tremendous amount of freedom. The position you describe doesn't sound like a quant position at all.

JJ,

You must be really, really rich. Don't tell me you have an onyx bathroom with gold taps, a la Donald Trump.

Grant.

grantx said:

JJ,

You must be really, really rich. Don't tell me you have an onyx bathroom with gold taps, a la Donald Trump.

Grant.

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JJ is the upper end of the ladder of wealth. Good on him ! I suppose my imitation onyx Formica bathroom doesn't say that much about me...?

Zen And The Art Of Trading!

TreeTox said:

Your viewpoints would be much appreciated.

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Quants are the part of the Discretionary Trader that does not think.

TT,

You're moving in the right direction. But I think extreme ostentation is the perogative of Yanks and English footballers. When you start raking it in as a quant (or trader)maybe something a little understated.

I'm Sorry for my original reply - it was somewhat snotty and hasty.

Grant.

The hiring business - is a business on its own. They squeeze you hard and list of requirements looks huge. But in reality the job doesnt need more than 10% of what it looks like.

If you have a real brain (and not just papers from North Perthshire University of Koalas) I can assure you can do any job banks can offer you (otherwise they wont ask a graduate for an interview).

Also career has its own rules. If you get 70K now then you will grow up to 90 + bonus in just 2 years (including 3.5% inflation so conveniently arranged by Gord-Master-Of-All-Puppets). Then you jump to another job for 120 + bonus (or if you are proficient in socialising you can find connections and jump into freshly built hedge fund with your friend and double that figure).

If you are a real material - there are no limits in the City. (You can jump off roof though too).

Almost the same applies on trading.

However the difference is significant. Even if you are a complete dork but could manage to get a job - you will have some life (4 weeks holiday and food and a flat in Central London).

In trading - if you are a dork - you go and sell the Big Issue next month and that is one way street. No return. Sleep rough, drink raw spirit and jump off bridge eventually (this is not the same as jumping off roof - as jumping from bridge is inevitable in this case).

If you are a rocket scientist - go and get that 70K job and then leave it next day - just to show them how big you are.

And then go and trade... Why not?

GammaJammer said:

sensible point re relative career stability (especially right now - I have had a few friends 'let go' lately - including finding out about one just this afternoon).

GJ

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Where did I mentioned stability?

But I am sure - real quant will never be let go. Or am I being inflexible again? :innocent:

maxima said:

But I am sure - real quant will never be let go. Or am I being inflexible again? :innocent:

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I bet there are some structured credit quants either out of a job or sweating a lot at the moment...

fifty2aces said:

I bet there are some structured credit quants either out of a job or sweating a lot at the moment...

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but jobs in risk departments has jumped up. Not everything is that grim.

Most of people in IT departments who kicked was ballast - liabilty rather than assets. You know - every company has few guys who got their pay rise every year because of corporative rules but they provided poor services from beginning and become less and less useful with time. But you cant just kick them with no reason.

There are always some percent of usless people (or people to meet racial or discriminatory employment targets).

So proper HR consolidates them in some way and when the rainy days come they flush them in one go.

So far it doesnt seem that bad as it is in news. From my point of view however....

Anyway - thanks to everyone and their input - I've just today been offered a trainee trader position at one of the "more reasonable" trading houses. I'll give it a go. I think it's an interesting time to get into futures trading; I also know a few people who have been given the push from their positions at the IBs - one of them was quite a senior guy at Bear Stearns who'd been there for a long, long time.

TreeTox said:

Anyway - thanks to everyone and their input - I've just today been offered a trainee trader position at one of the "more reasonable" trading houses. I'll give it a go. I think it's an interesting time to get into futures trading; I also know a few people who have been given the push from their positions at the IBs - one of them was quite a senior guy at Bear Stearns who'd been there for a long, long time.

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Congrats on your new position, I hope it works out for you. There is a danger though that if this is the sort of trading house that I'm familiar with then they will set you off manually scalping the bond/stir futures, you will try it for a year or two, and then you will find out that you're not cut out for it or decide that you don't like doing it. I know guys who reached this point and then found it very difficult to get trading-related jobs elsewhere. My advice, for what it's worth, is that you should try to steer yourself if possible towards longer-term trading (with an understanding of fundamentals as well as technicals), or algorithmic trading, and build up and use your maths and programming skills. If you just spend two years chasing bids and offers up and down on TT with no particularly convincing degree of success it'll be a tragic waste of your PhD (and your brain will turn to mush).

fat chance said:

. . . If you just spend two years chasing bids and offers up and down on TT with no particularly convincing degree of success it'll be a tragic waste of your PhD (and your brain will turn to mush).

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My thoughts too...

And another - why wont you try to apply for F1 driver seat? Isnt it cool to drive fast car and be admired by every girl in a town and get sh#t loads of cash?

There are so many thing to do in the world...

The only thing I cant get - is that - why would one spend 6-7 yrs of his life to uni and phd and then U-turn into something he never been trained?

Rhetoric question