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Future prospects of various quant roles

Posted: April 5th, 2013, 4:14 pm
by arbitraryname
What do people think about future prospects of HFT? Of pricing quants? Risk quants? Quant traders? Quant researchers? Quant investment strategists? Quant portfolio managers?Not asking everyone to pitch in on every role, but just wanted to start a thread on this.Just to get "controversial", I'll pitch in my 2 cents, but I really don't know anything about anything:HFT -- Increasing competition, regulatory/political risk -> not so goodPricing quants -- Maybe most of the exciting stuff is already kind of "done"? Don't all the leading banks already have extensive platforms of pricing models? Is there much exciting and rewarding work left here?Risk quants -- Probably good prospects in light of all the regulatory pressure; not sure about the excitement and compensation levels thoughRest -- Don't know, but not sure how investors view quant strategies/funds after all their performance during the crisis, the flash crash, lack of transparency, etc.

Future prospects of various quant roles

Posted: April 9th, 2013, 5:12 pm
by DominicConnor
Be clear the trading is becoming more electronic and automated and the regulators are pushing in that direction, albeit indirectly by mandating use of clearing, etc.Automated execution to avoid moving the market against you when dealing with larger size is commonplace and there are a whole pile of rules around "best execution" that require dealers in effect to execute trades automatically.Also there is a more a "control culture" where the reasons behind a trade are required to be more documented and automation is a good way of doing that.The generates work in market impact modelling and there is a steady growth of quants in what are effectively compliance roles, but whether you see that as good news is a free variable.Scenarios, risk modelling and stress tests mean that many analytics that were "fast enough" for use in the market are too slow when they have to be executed many many times, so there is a lot of re-implementation of exiting models.That is sometimes "risk" other times quant group and sometimes the reading units, varies by bank and business unit.Risk is indeed a growth area in headcount, but I do not yet perceive the money going up to match.

Future prospects of various quant roles

Posted: April 9th, 2013, 11:32 pm
by ArthurDent
I can only comment on pricing -10 years back, implementing a term structure model and pricing bespoke exotics was cutting edge.Today, pricing portfolios of vanillas with FVA and CVA is cutting edge - whether CVA/FVA is handled by risk, by the desk or by the CIO's office is open to interpretation!

Future prospects of various quant roles

Posted: April 17th, 2013, 10:50 pm
by alphaalpha
I got some insight recently when interviewing across some of these roles, including risk modeling. The group I talked to does mostly large-scale MC simulations which can actually be quite interesting if you're computationally inclined. As Dominic points out, risk quants spend a fair amount of time these days trying to figure out how to scale up pricing models that worked well for a single desk but are not feasible if you want to price the entire bank's portfolio overnight. The offer I got in risk was actually quite hefty too. High base plus signing bonus but my guess was that performance bonus is likely limited in that role. They seem to realize that it's not the most exciting/attractive area so they're willing to pay up to get good people. This was with a certain BB that lost a big chunk last year in European credit trades and are therefore hiring massively into their risk modeling group right now. Personally, taking quant portfolio manager over risk was a no brainer in the end though since the upside is essentially unlimited while in risk at a BB you'll make MD in 7 - 10 years but you'll still just be a cog with limited bonus potential. Just my 2 cents.

Future prospects of various quant roles

Posted: April 18th, 2013, 12:58 am
by tu160
QuoteOriginally posted by: alphaalphaPersonally, taking quant portfolio manager over risk was a no brainer in the end though since the upside is essentially unlimited while in risk at a BB you'll make MD in 7 - 10 years but you'll still just be a cog with limited bonus potential. Just my 2 cents.Curios, was the PM role with BB as well or smaller firm? The first position implies heavy C++, how does this fit into PM role?

Future prospects of various quant roles

Posted: April 18th, 2013, 7:14 am
by DevonFangs
QuoteOriginally posted by: tu160QuoteOriginally posted by: alphaalphaPersonally, taking quant portfolio manager over risk was a no brainer in the end though since the upside is essentially unlimited while in risk at a BB you'll make MD in 7 - 10 years but you'll still just be a cog with limited bonus potential. Just my 2 cents.Curios, was the PM role with BB as well or smaller firm? The first position implies heavy C++, how does this fit into PM role?Might actually not imply heavy C++, just design and leaving the coding to risk IT.

Future prospects of various quant roles

Posted: April 18th, 2013, 7:39 am
by Gamal
QuoteOriginally posted by: DevonFangsMight actually not imply heavy C++, just design and leaving the coding to risk IT.Exactly. One thing in risk is definitely better than in FO - team working. In FO I had to implement all the models myself, as a senior guy I had at most two developers to code in C++ or C# my VBA or criple C++ prototypes. It can't be done this way with massive MC in risk - you have to share and organize the work of many people. And in a bigger team it is easier to find a slot you fit to.

Future prospects of various quant roles

Posted: April 18th, 2013, 11:58 am
by alphaalpha
QuoteOriginally posted by: tu160QuoteOriginally posted by: alphaalphaPersonally, taking quant portfolio manager over risk was a no brainer in the end though since the upside is essentially unlimited while in risk at a BB you'll make MD in 7 - 10 years but you'll still just be a cog with limited bonus potential. Just my 2 cents.Curios, was the PM role with BB as well or smaller firm? The first position implies heavy C++, how does this fit into PM role?PM role was with smaller hedge fund, on the high frequency side of things, so pretty heavy on C++ as well.

Future prospects of various quant roles

Posted: April 18th, 2013, 2:53 pm
by tu160
QuoteOriginally posted by: alphaalphaPM role was with smaller hedge fund, on the high frequency side of things, so pretty heavy on C++ as well.Oh, they start calling it PM now. I guess it sounds better than prop trader

Future prospects of various quant roles

Posted: April 18th, 2013, 7:18 pm
by spice
Quant investment strategists -- it is a small market. I would lump it all with strategists, economists, researchers.

Future prospects of various quant roles

Posted: April 18th, 2013, 7:18 pm
by spice
Quant investment strategists -- it is a small market. I would lump it all with strategists, economists, researchers.

Future prospects of various quant roles

Posted: April 19th, 2013, 3:02 am
by alphaalpha
QuoteOriginally posted by: tu160QuoteOriginally posted by: alphaalphaPM role was with smaller hedge fund, on the high frequency side of things, so pretty heavy on C++ as well.Oh, they start calling it PM now. I guess it sounds better than prop trader Haha, agreed. My impression is that quant strategist, algorithmic trader, PM, portfolio analyst, researcher, etc. is all pretty much the same, especially at smaller firms. If you develop trading strategies, then you also implement them at least to some extent, which means you're trading, except that it's automated so no one's actually a trader in the traditional sense, etc. The specializations might have more meaning at bigger places.

Future prospects of various quant roles

Posted: April 19th, 2013, 10:18 pm
by slacker
the term has really always been PM's in hedge funds. Prop trader really is a term for banks.

Future prospects of various quant roles

Posted: April 20th, 2013, 3:21 pm
by tu160
QuoteOriginally posted by: slackerthe term has really always been PM's in hedge funds. Prop trader really is a term for banks.Interesting... I was working in HF industry for a while, but we had a clear separation between PMs and traders.Could this PM title devaluation be high-frequency specific?

Future prospects of various quant roles

Posted: April 20th, 2013, 11:05 pm
by slacker
QuoteOriginally posted by: tu160QuoteOriginally posted by: slackerthe term has really always been PM's in hedge funds. Prop trader really is a term for banks.Interesting... I was working in HF industry for a while, but we had a clear separation between PMs and traders.Could this PM title devaluation be high-frequency specific?Good point. I agree. Trader in Funds usually just meant the execution trader. However, in hi-freq type environment its one and same by my reckoning.