Skillset for a London quant trader
Are programming/computer language skills essential? What other specific skillset is needed as a bare minimum for recruitment (asides knowledge of markets)? How much weight does experience from a non-markets / non–asset management/research role carry (say 2 previous IB internships) How much expertise in statistics is the bare minimum (is basic knowledge of correlation & Sharpe ratio-ish stuff enough)? What are the chances of getting an interview for someone of a non-numerical (say MBBS) background stand from an obscure university name?
Based on the most helpful WSO content, here's a comprehensive breakdown addressing each of your queries regarding the skillset for a London quant trader:
Programming/Computer Language Skills: Yes, programming skills are essential for a quant trader. Python is the most commonly used language in this field, but knowledge of other programming languages such as R or C++ can also be beneficial. This is because quant trading involves developing complex mathematical models and algorithms, which require strong programming skills to implement.
Other Specific Skillsets:
Experience from Non-Markets/Non-Asset Management/Research Roles: Experience from roles outside of markets or asset management, such as investment banking internships, can still be valuable. It demonstrates your ability to work in a high-pressure financial environment and can provide relevant skills such as financial modeling and analysis. However, the weight of this experience may vary depending on the firm and the specific role you're applying for.
Expertise in Statistics: A basic understanding of statistics is not sufficient. Quant trading roles typically require a more advanced level of statistical knowledge, including but not limited to, time-series analysis, machine learning, pattern recognition, and the ability to apply these concepts in financial modeling. Understanding concepts like correlation is a start, but you'll need to delve deeper into statistical theories and applications.
Chances for Non-Numerical Background Candidates: Candidates from non-numerical backgrounds, such as MBBS, face a more challenging path to becoming a quant trader, especially if coming from an obscure university. However, it's not impossible. Demonstrating a strong aptitude for mathematics and programming through additional coursework, certifications (such as CFA or FRM), or self-taught programming projects can help bridge the gap. Additionally, showcasing analytical skills and the ability to learn complex quantitative concepts quickly can improve your chances.
In summary, becoming a quant trader in London requires a blend of advanced programming skills, deep statistical knowledge, and a solid understanding of financial markets. While non-traditional backgrounds face more hurdles, demonstrating a commitment to acquiring the necessary quantitative skills can help overcome these challenges.
Sources: RE: Prop/Quant Trading - Why is it not as big a target as Investment Banking?, How do you become a Quant Trader?, Q&A - Quant with 2 yrs exp in Europe both buy/sell side, Skills needed for a quantitative trader?, Most sought-after skills for Quantitative research position
I would say it depends on the tier & type (HFT/option market making/etc.) of shop you are going for. Most of these firms won't care much about IB internships or markets knowledge, but they have a high bar for first rounds. The top firms in LDN are: JS/CitSec/5R/HRT. These firms are looking for candidates with strong quantitative backgrounds, so I think the issue you face is the resume screen which may be quite tough given your situation. If you get a first round/call, then it is up to you from there to perform and background won't matter at all. In terms of the level of probability & stats, you should be proficient in those topics up to an A-level/1st year university/math olympiad competition standard.
Re: coding, you should work on becoming proficient with python. Even the top firms that don't require it as pre-requisite knowledge for traders (maybe CitSec will test it if you are applying for QT internship and going for systematic trading desk) will be teaching you the basics there/expecting traders to use programming to conduct analysis. Clearly with no coding skills, high frequency trading firms such as HRT and the systematic desks at CitSec are not going to be attainable right now.
If you are open to just (quant) trading in general, you could apply to other shops which may be more open to someone with a non-quant background. Otherwise, you could look to apply to sell-side trading businesses (e.g. banks) which have a significantly lower/no bar in terms of quant ability and use that to get a trading seat.
Summary: will be tough to get spot at top quant trading firm from info you provided (that being said, don't let that stop you from up-skilling & applying) so I would recommend casting a wider net if you are interested in trading.
What is the feasible/realistic UPSIDE potential of compensation for a career in High Frequency Trading or systematic desks in London (I'm curious about the numbers)? And how frequently do people attain such kinds of career peaks in London? Are there very large disparities in comp upside potential between the top 5 (proprietary Systematic / High Frequency trading firms and the others that're like in the top 40 in London? How about disparities in entry-level salaries across such trading firms (non–sell-side)?
In general, IF you perform well you will be very well compensated. In terms of numbers, definitely over 7 figures and maybe over 8 if you are senior enough (and maybe 9 figures if you are really a one in a million outcome). Trading is not like IB in the sense that people can roughly map out pay trajectories; trading compensation is mainly in the form of bonus which has a very wide range (hence high variance compared with IB/etc paths) - some people get nothing and others get the keys to the kingdom. Honestly, from someone who has asked these same questions, I would worry less about exactly which firm is going to pay the most because if you are good at what you do (i.e. make money), then someone will offer you lots of money to move around. Salary differences matter when you have competing offers.
I would instead focus on landing a job in a firm/team where there are plentiful learning opportunities; trading is the type of role where mentorship/eduction really matters (you need people invested in you and your career). As a junior trader, the education from a seasoned trader is worth much more (in my opinion) than salary discrepancies for the first few years (because a bad trader may not even have a long career). Whether that job is at a bank or at a trading firm just comes down to where someone can land a job. There are a few desks on the sell-side where good risk takers are still around, but on the whole it isn't surprising that most top students are picking trading firms over banks as those desks are few and far between and it is almost a lottery if you can get into those teams.
Sorry can't provide hard numbers, but I think you have to think about what you really want to do and then pursue it (within reason). I would make use of any networks (school, sports team, clubs, etc.) networks you have to speak to people who are in different trading/markets seats and see what they actually do on a daily basis. If you are still eligible for internships, then I would apply to those - wherever that may be - as those are the best ways to see what a firm is like and get a FT role. Best of luck!
Another question: is there an age barrier at which it's too late to attain certain SENIOR positions in a LONDON quant career? Is age meaningless in recruiting in London/Europe at entry level? Is up-skilling & getting a quantitative master's at close to 35 in order to break in a feasible option, or something that would impede quant career progression/recruiting?
I often hear that in America, one can't make quant PM if older than a certain age – that's why I'm curious about this
Sorry to chime in, but from your experience could you comment on how much tougher it generally is for candidates to get called up if not studying at COWI or not studying a favourable STEM course if at COWI i.e. a student doing STEM at a semi-target for banking (Durham, Notts, Bristol etc), or perhaps a student doing Data Science (as opposed to the more favourable MORSE) at Warwick?
I know the recruiting has been notoriously tough recently so wasn't sure on how good a sample that was.
I'm asking as I want to be realistic, and to try understand what other things we can do to stand out as a candidate if not initially seen as having the 'ideal' background. I know Hackathons are pretty good to boost your CV, as I hear personal coding projects are also (just not sure what sort of thing they look for here), but if you could share some info from your perspective that'd be super helpful.
I haven't been involved in the recruiting side so I cannot say for certain, but I would imagine that is definitely harder. It isn't a coincidence that lots of these traders come from math/phys/cs/etc. at top schools in the US & UK. As said before, if you can get to the interview then pedigree doesn't matter if you perform.
"Would getting some quant masters at 35 help in recruiting?" Maybe... I am not really sure but I do think age would be an issue. Being a junior trader anywhere is going to be long hours (i.e. 12+ hour days) and some of these firms (not naming names) are notorious for bad work-life balance. I think recruiters are going to find it hard to believe that a 35 y.o with more life experience is going to tolerate sitting in the office for potentially long hours in a junior role when they could just hire a college grad who has nothing to really compare it to. Then again, some of these firms have been known to recruit talent from people in different careers if they have real potential. In terms of CV, yes datathons/etc are good to bolster the CV for some firms. By all means, you should apply to these firms and go through the interview processes - you never know if you don't try.
If you are really set on these firms, have you ever considered doing SWE instead? People can move around between these firms as a SWE and people go into that career at different ages and make very good money. I am not saying that is easy - they have a very high technical bar to pass, but at least I think age is less of a factor than it is for a trader. If you are instead dead set on trading/investment roles, maybe you want to look into asset management firms as well for some work experience. I think sell-side gigs are potentially going be harder to land at 30+ years old because of the work-life balance (which is often worse than the quant trading firms).
Be tech. Know something about statistics and data science. Curious about market and ambition to solve real trading problems by quantitative skills is also important.
Get a first in Maths/Physics/CS at Oxford/Cambridge/Imperial. Know some python. Be good at mental maths/quick estimation. Ideally know some poker or chess (not necessary but never hurts).
For pure QT/QR positions the chances of getting an interview with an MBBS is near 0. The positions explicitly list doing a quantitative discipline at uni.
The other comments are good. Reading between the lines though, whats your real question? You’re wondering if you should try to pivot because you’ve gotten interested in quant subjects, get a masters to break in to a top 5 shop and have a shot at making millions?
Absolutely : )
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