Decent firm for quant trading

[macrotrader98]

Hi,

I have several years experience with investing and trading (asset management firm with billion$+ AUM, quantitative foundation, trading strategies, ...) and am looking for a hedge fund / trading shop in London. Pay is not so important, but the possibility for development (i.e. becoming a quant trader eventually). I don't have a PhD, so the best fit would be a smaller decent shop. Any ideas?

 

[tommog]

To get onto an established quant desk you are going to need outstanding academics. The purely algo driven trading desks have one of two people that are market experts but most of the workers that do the day to day monitoring of the systems etc are super-brains that have highly advanced programming knowledge and often come from physics/engineering/statistician background.

If you dont fit the above criteria then i suggest you approach firms that are not currently engaged in a large scale quant project and say that you would be interested in setting one up/learning about it. The firms that would be most responsive to this i imagine are the prop firms. They take a very entrepreneurial approach to the business and if you can sell yourself and the idea will usually be open to giving you some time to explore this, although dont expect to be paid much, unless of course you are successful in which case you will get to keep the majority of the money yourself.

It is my experience that prop firms are now realising that they have to have some quant elements to their strategies to compete and most have at least one small team exploring this avenue. I suggest you start with Schneider's. I believe they have some in house programmers.

There are a few small companies that bridge the gap between prop firm and employed fund style trading. Tibra would be one of these.

 

[zaq1]

Wilmott | Serving The Quantitative Finance Community | Home is a quants forum where you could possibly get some useful insight, too.

 

[macrotrader98]

Schneiders, hmm.

Seems to me there are two types of shops. The first tier. Making vast amounts of money, such as Winton, MAN, GS and whatnot. The second tier. Making almost no money. I don't have a chance to work for the first, and I don't want to work for the second. Is there a tier between one and two? I'm thinking working on something else and building my own shop on the side.

 

[tommog]

Depends what you mean by "no money". I know about 7 people at Schneiders, 2 of them make no money, the rest of the them make 5/6 figures a month. Have similar stats of people at other companies too. Thats prop trading for you, no guarantee you will make anything, but if you can crack it you can earn infinitely more than at the larger more coorporate style houses that take bigger percentage splits.

Reason i suggested the prop house route is they tend to be more open about entry level positions and also give you a lot more rope if you go to them with an idea of how they can develop their business in a new direction (such as an algo/quant team). Nothing stopping you building a team in this environment and then market yourself to a bank/hedgefund after building a track record if thats the direction you want to go. You wouldnt be the first.

I have traded prop (still do), and worked in a coorporate environment. there is certainly more support and a bigger safety net in "the first tier" as you put it. But you have more autonomy and a bigger slice of the profits in the second tier.

 

[macrotrader98]

Thanks a lot for the input.

My space is equities, short to medium term (i.e. 1-5days). I would be interested how this can work. Do some shops lever the capital? I suppose they work with extremely tight limits in the beginning.

From the shops, which are the most respected, and would be most open to quant? I'm still developing a style, so I'm not really sure. I'm mostly interested in niche markets, not trading futures.

 

[tommog]

Well there is no doubt most trading houses are predominantly futures trading. I have known some equities teams day trading LSE but all struggled to compete with the futures traders due to it generally being more expensive to trade stocks than futures contracts. But longer term would probably work better.

Id advise you to contact all of them and see which one you connect best with. Schneiders have the most traders id say and therefore bigger infrastructure, probably get you lower costs etc. Kyte Group work with some algo teams i believe. Then there is Marex. Id say theyre probably the biggest places, then there are the slightly smaller places such as Futex. And then smaller more niche houses. The bigger places tend to give you the best deals, but the smaller places tend to work more closely with indiviuals. But they are all very entrepreneurial in nature and are open to new trading styles.. well the ones worth talking to are anyway. But definitely talk to as many as you can