Quote: "However, a financial crisis in the Western hemisphere coupled with other macro/socioeconomic factors has lead to a reduction in scientific and engineering budgets and later-stage investment in such technologies."<p>Translation: The recent worldwide economic meltdown was caused in part by quants' inability to accurately assess investment risks, or to influence decision-making, or both. The fallout was public distrust (justifed or not) of quants and what they do for a living.<p>The bottom line is that reliable quantitative analysis hinges on the degree to which economics is a science. Economics isn't a science. Any questions?
"A great way to get into such a fund is to apply as a software developer, with aspirations of becoming a portfolio manager"<p>That's not a path well traveled, especially at banks. At good hedge funds roles are well delineated, and chances are that you'll be working hard enough at your day job that you'll have little chance to explore on your own. Policy may prevent you access to the interesting data sets (execution data and historical P&L is sensitive to reverse engineering, and market data is often subject to expensive licensing). For banks the issue is far more bureaucratic - different teams with different hiring budgets and lines of business yada yada. There are relatively few managers high enough to wall cross between back office (technology) and front office (trading) so there's a stochastic component to your success at moving internally based on what group you end up in and how well connected your MD is. It doesn't help that coders are usually the limiting reagent (and paid less than traders) so the firm's interests aren't necessarily aligned with your own.<p>If you're passionate about trading and coding, HFT is a great way to go. Money makers come from all backgrounds (grad/undergrad/super technical/creative coder) and you'll likely have better control over your coding/research ratio.
Two Sigma (where I work) is hiring for a variety of positions, not just Math/Physics types but security, systems, UI, networking, etc. anyone with a serious love of and talent for technology should consider it. i left google for two sigma and am loving it, especially the people and culture. feel free to ask me about it either in this forum or by email.<p><a href="http://www.twosigma.com/careers.html" rel="nofollow">http://www.twosigma.com/careers.html</a>
The article makes a good point about MFE degrees. They're a dime a dozen these days and most of them can't answer simple interview questions about linear regression. Its pretty shameful, not so much on the student's part, but on the universities that graduate these kids fully unprepared for the jobs that they think they can get...
Another solution is to write the algorithm but avoid the hedge fund - lots of suits, and they take most of the money. You're better off if you trade it yourself.<p>People work for hedge funds because hedge funds provide mentorship and really powerful tools and lots of data to sift through. We're trying to provide all of those things, for free, at Quantopian. <a href="https://www.quantopian.com/" rel="nofollow">https://www.quantopian.com/</a> Check out our community (for mentorship), our backtester (very powerful, and open source), and our 11-years of minute-bar data - all for free.
Sometimes I think of the HFT and quant trading industries are like the Formula 1 of tech. A way for extremely talented people to apply their skills and compete with each other, with lots of money involved, but ultimately the technologies developed for the 'race track' make their way onto 'main street' in some shape or form.<p>I'm sure all this research into ultra low latency infrastructure and live data mining is bound to come in useful somewhere else. Maybe this is off base but why be cynical.
Quantitative trading seems interesting because I would hazard that you need strong math background along with solid hacking skills.<p>There are other problem domains with similar requirements, but I'm quite curious to hear stories from other HN'ers who have tackled quantitative trading either for themselves and in the day job. Specifically, if you can share a bit on your technical work in such a role, that would be cool to hear about.
Hi, I worked in both roles. I did an undergrad in theoretical Math and MFE. Its particularly easy to get a risk management job. My first job was for 100k + bonus out of school for BNPP. It is a highly quantitative risk department and was one of the best (if not THE best) institutional risk management gigs on the street. I did not know this at them time but I started in 2007 and after 2008-2009 I came to this conclusion.<p>Anyway back to main subject. Risk jobs are easy to land and you can learn TONS or nothing interesting. Every shop has Risk integrated at different levels. Some shops its a backoffice type job where the risk guys are in the back seat (and this is the dominant case actually 8/10 I'd say). And rarely in places like BNP will you sit on the trading floor and have more power than traders. Yes traders will actually fear you... Rather than vice versa where Traders that are making money are big swinging dicks doing whatever they want (this is still the case at most shops).<p>I started quant trading by chance when some guys running an arb blackbox were started constantly loosing money and were working late hours. I gave them a hand fixed a few bugs and word quickly spread. Next opening they offered me a position and I did an internal transfer...<p>After I went to managing a portfolio (2 years after). And successfully did that for 4 more years.<p>The summary is this. Quant Trading roles actually come in tones of flavors.<p>Banks have option desks and in the recruiters will call these "quant trading roles". Hell, for all they know there is complex math involved and 'quant' sounds sophisticated. Truth is all option traders are proficient and calculus and derivatives to the point good traders are able to calculate pretty accurate 2nd orders in their head. And the tools available are also vast.<p>But this is not a 'quant trading role'.<p>A true 'quant' role is what some institutions have in house 'quant' teams that manage all the pricing models and libs.<p>A 'true' quant trading role is stat-arb or some other arb strategy desk or similar type of strategy. Most banks do not have them anymore so its hedgefunds only. But even these vary vastly in quality. I know desks that would make 2-3 million a day net with very shitty hardware and patchwork system with lowlevel to mediocore guys working on it. And brilliant guys whom struggled (talking tier 1 guys, PHd MIT, princeton).<p>So its a strange game and I would recommend going into a trading role into a medium level shop. Whats important is a good team and having a good vibe with the people you will work with.<p>Trading is high stress and high emotion business so for your sanity in the long term its more important to work with good people rather than a top tier shop in the beginning.
<p><pre><code> Despite the intense competition, it is still possible to
shine as a candidate, but you must be very well aware of
what the funds are after, and then make sure you are
providing it to them.
</code></pre>
I think this is a truism for any role in any capacity in any organization. Just replace "funds" with the organization/manager/client/whatever name.
RenTech assembled some of the brightest technical minds in the world to trade purely quantitively. They did pretty well for themselves.<p>Jim Simons, famous mathematician, former MIT professor and DIA code cracker, earned the following amounts according to Forbes:
2011: $2.1 Billion
2010: $2.5 billion
2009: $2.8 billion
2008: $1.3 billion
2007: $1.5 billion
Dear HN: Stop casually discussing working for a bunch of disgustingly greedy, full-of-shit, and downright <i>evil</i> sociopaths as if you hadn't noticed.