1.01.2005

Q&A: What exactly does a Quant do in real life?

A quant designs and implements financial models and systems for pricing, hedging and trading of instruments, such as stocks, bonds and options. Some common roles within I-Banks that require Quant skillsets are

  • Desk Quant: interact with traders (Front Office) directly, and give (trading) books an edge through different methods such as time-series analysis, and discovery of predictors/indicators. Stressful but rewarding. It's not uncommon to work 12 hours. It's also not uncommon to get a big fat 6-figure bonus. Some might even call it "Golden Handcuff".
  • Model Validating Quant: The equivalent of Quality Assurance (QA) in the software industry. Re-implements models to assure Front Office ones are correct. Works in the Middle Office - further away from the desks ( =smaller bonus).
  • Research Quant: the objective is to break new grounds. ie. research new approaches. Can be hard to justify their existence.
  • Quant Developer: a programmer who understands Quants' vocabulary / speaks their language. Usually works with a Quant to turn a model into working code. The pay (6+ figures) is incredible compared to what a programmer makes in other industries.

The biggest question is whether you want to join a group of other hard-core PhDs doing the tougher math problems, or join a more financial group where you will be talking business and providing them with your math edge. The latter involves far more selling, keeping up to date on financial trends, and describing quant results in the traders' vacabulary. ie. 'chained' to the trading desks.

Category: C++ Quant

2 comments:

  1. GoogleMail3:53 AM

    Great piece! Now I got the differences.

    ReplyDelete
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