Quantitative analyst or commonly known as ‘Quant’ in the financial world is a person who specializes in the application of mathematical and statistical methods – such as numerical or quantitative techniques – to financial and risk management problems, says Wikipedia .
Quants are often called as ‘Rocket Scientists of Wall Street’ and there is a reason for it. Modern financial instruments are so complex that it takes a genius to understand them fully and as a result people who do understand them, get paid well. In US, an entry-level quant can earn $127,000 per annum according to Indeed, and I’d say that’s a pretty good start. As the experience grows the salaries grow as well, some quants earn as high as $500,000 per annum, and that’s not counting the bonuses which can outnumber the salary itself (However, the bonus depends on the overall performance of the firm).
So what do quants exactly do?
Here is a typical job description  –
- Research and analyze market trends and statistics to make modeling decisions
- Develop and implement complex quantitative models (e.g. models for trading equities) and analytical software/tools
- Perform daily statistical analyses (e.g. risk analytics, loan pricing, default risk modeling, etc.) and coding tasks (e.g. pattern recognition or machine learning)
- Prepare detailed model specifications and methods of data collection
- Test new models, products and analytics programs
- Maintain and modify analytical models while in use
- Apply or invent independent tools to verify results
- Collaborate with teams of mathematicians, computer engineers and physicists to develop optimal strategies
- Consult with financial industry personnel on algorithmic trading strategies, market dynamics, trading system performance, etc.
- Generate requirement documentation for software developers
- Present and interpret data results to senior management and clients
Basically everything related mathematics and statistics, but lately programming skill has also become a mandatory requirement for quants especially the ones who deal with Algorithmic Trading. Programming languages like C++, R & Python are most in demand.
Where is the most demand for quants?
We’ve prepared a table for you, this is a list of all open positions for quants in these countries, clearly US requires all of them.
And here is the median salary for each country mentioned in above chart.
Average Annual Salary
|Hong kong||222||HKD 429k|
So what does it take to be a quant?
So there are multiple things that you need to get right before you can apply for a Quant’s position. But, if you ask us one thing that’s most important is your ‘love’, the love for mathematics. This job will test your math skills to the core, even an above average student in maths might not be enough. You have to be exceptional.
A degree in applied mathematics or statistics from a reputed institute, programming skills, and prior experience (not mandatory but helpful) should get you started.
In case you are not looking out for a career based opportunity in algorithmic trading domain but want to venture as an entrepreneur in this field we have the perfect success story to inspire you. This case study talks about Derek and Maxime, finance experts from two different nationalities who were connected during QuantInsti’s Executive Programme in Algorithmic Trading and started their own firm in algorithmic trading domain. Click here to read the story.