Six branches of Quant uncovered

Six branches of Quant uncovered

• 1 What does Quant do?

  Quant's job is to design and implement mathematical models of finance (mostly using computer programming), including derivative pricing, risk assessment or predicting market behavior, etc. So Quant can be seen more as an engineer, according to China's usual classification method is tech talent, not liberal arts talent, which is a certain difference from finance (of course finance also has a lot of tech content).

• 2, what are the quantities?

  • 1. Desk Quant is Desk Quant develops price models that are used directly by traders. The advantages are close to the Money and Opportunity encountered in the transaction. The disadvantages are high pressure.
  • 2. Model validating quant Model Validating Quant The price model is developed independently, but to determine the correctness of the model developed by Desk Quant. The advantages are that it is easier and less stressful. The disadvantages are that this group will be less active and away from Money.
  • 3. Research quant Research Quant attempts to invent new price formulas and models, sometimes even performing Blue-Sky Research (not quite clear what it is). The advantages are that it's more fun (for people like this) and you learn a lot. The disadvantages are that sometimes it's harder to prove that you exist (like scientists, no big results get you noticed).
  • 4. Quant Developer It's a very varied job. It could be writing code or debugging other people's large systems.
  • 5. Statistical Arbitrage Quant Statistical Arbitrage Quant looks for patterns in the data for automated trading systems (i.e. leverage systems). This technique is very different from the derivative pricing technique, which is mainly used in hedge funds.
  • 6. Capital Quant Capital Quant builds a credit and capital model for banks. It's not as attractive as derivatives pricing-related work, but it's becoming more important with the arrival of the Basel II banking agreement.

    People invest in the financial industry to make money, and if you want to get more income, you have to get closer to where the money is "produced". This creates a phenomenon of being close to money regardless of those who are farther away.

• 3.Quant's field of work

  • 1. FX FX is short for foreign exchange trading. Contracts tend to be short-term, large in amount and with simple stipulations.
  • 2. Equities Equities means options on stocks and indices. The technology is biased towards partial differential equations (PDE). It is not a particularly large market.
  • 3. Fixed Income Fixed Income means interest-based derivatives. This is probably the largest market in terms of market capitalization. The mathematics he uses will be more complicated because he is fundamentally multidimensional.
  • 4. Credit derivatives Credit derivatives are derivatives that are built on the repayment of corporate debt. He is growing very fast and there is a lot of demand, so there is also a high income.
  • 5. Commodities Commodities have also become a fast-growing sector due to the widespread rise in prices of household goods in recent years.
  • 6. Hybrids Hybrids are derivative markets with more than one market, typically interest rates plus something else. Its main advantage is that knowledge can be learned in multiple areas.

• 3 Quant generally works for which companies

  • 1. Commercial banks Commercial banks ask less of you and give less.
  • 2. Banking The bank requires a lot of hours, but the pay is high. Overall, American banks earn more than European banks, but they work longer hours.
  • 3. Hedge funds Hedge funds require a lot of work and content, and they are also in a fast-growing and volatile situation. You may get a lot of returns, or you may be fired after a few months.
  • 4. Accounting firm The main disadvantage is that you are away from specific actions and decisions, and strong people prefer to go to the bank, so you have a harder time finding people to ask.
  • 5. Software company So you go to a software company as well. The disadvantages are similar to accounting companies.

• Four, what books do you need to read to become a Quant?

  现在有非常多的关于Quant的书.基础书籍包括

  • Hull wrote Options Future and Other Derivatives. The book is known as the Bible. The disadvantage is that the content of the book is aimed primarily at MBAs rather than Quantitative experts - Hull Baxter and Rennie Hull.

  • The Concepts and Practice of Mathematical Finance. The aim of this book is to cover an area of knowledge that an excellent quant should know. It includes a strong list of some programming projects that you should check out before applying for a job.

  • This book is intended to show you how to use C++ to do Quant's work.

    Randomization, while not important at first glance, is very useful. I suggest you read some basic theory books first, like Chung's books. Some books I recommend in this regard:

  • Williams is the author of Probability with Martingales, an easy-to-understand account of discrete time martingale theory.

  • Rogers and Williams are playing Particularly Volume 1.

• Five, to become a Quant, what do I need to know?

  Depending on where you want to work, the knowledge you need to learn varies greatly. At the time of writing this article (1996), I would recommend learning all my books. Many people mistakenly think that learning these knowledge is just reading books.

  It is also important to show your interest in the field. You need to read the Economist, FT, and Wall Street Journal regularly. The interviewer will ask some basic arithmetic or analysis questions, such as what is the Logx score.

  Interviews are also an opportunity for you to choose a company. What kind of people they like and what kind of answers they care about can be derived from their questions. If you get asked a lot of questions about C++ grammar, then choose carefully unless that's the job you want to do.

  Having a Master's degree in Financial Mathematics allows you to work in banking risk or transaction support but not directly in Quant. Banking is becoming more and more mathematical, so those things are useful in many areas of banking.

  In the United States, it is becoming increasingly common to pursue a Master's degree after completing a PhD. In the UK, this is still relatively rare.

• 6, what are the general professional counterparts of Quant?

  It has been observed that Quant generally specializes in mathematics, physics, financial engineering (financial mathematics). Although not particularly many, there are still some applicants for Master's degrees in metallurgy at Quant, and generally a few good FE majors are going to do Master's degrees at Quant.

• Programming 7

  All types of Quant spend a lot of time (more than half) on programming. Nevertheless, developing new models is also a fun thing in itself, and the standard implementation is in C++. A person who wants to become a quant needs to learn C++, some other places use Matlab so it is also a useful skill, but not as important as C++.

Translated from Private Factory