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finallytrading
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Joined: September 28th, 2014, 11:57 pm

Tier 2 Model Validation - Good place to start?

September 29th, 2014, 7:39 am

Hi,I'm new to this forum and am looking for advice if anyone could help me.I am a PhD in (in an unrelated, but very quantitative field) with pretty much no coding and little finance experience, trying to become a quant in the city of London, preferably in the Front Office, with hope to move to in algo trading in a few years' time.I have been applying for quant jobs for a couple of months now, had 20+ interviews so far, and have been preparing for those interviews via readinga variety of books (Baxter/Rennie, Wilmott, Hull, certain C++ materials).I have mostly been rejected very early on, because they all mentioned "I don't know enough", "I have too little experience" and/or often couldn't answer questions,all of which of course is fair enough, tbh. I have made good progress in my studies though, and am now able to pass several rounds and have been doing much better.However, I am at the very last (non-technical) stage with a tier 2 bank in model validation, which I was not really hoping to start with, especially considering thatthis role only covers one asset class.My question is this: Should I continue studying and keep trying, considering that I easily get 2 interviews per week? Or should I just take the role if they make mean offer without much time to decide?I was thinking: Model Val is a more relaxed place to start where I could learn the skills I completely lack and change later on. On the other hand, would it impairmy future career, considering I will be paid less, would have to work my up to not just FO, but also to a tier 1 bank, and then maybe algo trading? Also, would I havetime to learn the necessary statistical methods required for algo trading, or will you be a specialist in derivatives pricing?Friends of mine got great FO jobs in Goldman and JP Morgan even though they knew very, very little, but told me they just got lucky.Any information is much appreciated, thank you in advance!
 
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ashkar
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Joined: October 17th, 2011, 9:25 am

Tier 2 Model Validation - Good place to start?

September 29th, 2014, 12:22 pm

QuoteOn the other hand, would it impair my future career, considering I will be paid less, would have to work my up to not just FO, but also to a tier 1 bank, and then maybe algo trading? Dont bank on this career plan mv->fo derivs->algo. Its extremely unlikely to happen, and it will become more unlikely the longer you wait. You already consider MV a career killer - so why start your career on a back foot. Forget about T1/T2 etc. just get a job that you'll be happy spending 12 hours a day learning about. On the practical side of things, 20+ rejections is not great. Equivalent candidates for quant jobs (fresh phd, applied maths, programming, internships) have much higher 'hit rate'. You say you have quantitative background with no programming experience. Not even matlab/R etc?
 
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DominicConnor
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Tier 2 Model Validation - Good place to start?

September 29th, 2014, 12:32 pm

Your friends are not wrong that luck has a part to play, but I'm always keen to ensure people use their quant skills on their own lives.So how do we model your life at this stage ?We have:A cost of carry, you must live, eat, etc.There is some probability P that you "get lucky, which is going up.P will not go up forever, you have personal boundaries on what you can learn and after a while you look like 2nd class foodP will hit some maximum then declineEvaluating the job:U(MV)>0However the area under the curve is truly huge, so the difference in Utility between an MV centred career and FO is also large.People can and do make the transition, but careers are largely MartingalesHow long have you been trying ?This allows us to guess at various coefficients in any model.Aside from the pseudoquantitative stuff:Some of the better employers actively prefer people who've had the gumption to plug through a bunch of books without any help and get themselves to a good point.Some don't.There are other factors here, the market is still a bit soft, so many firms HR filter on their own view of "top" universities, you might be surprised which are and are not on their lists and they vary from HR to HR and day to day.
 
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Marco72
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Tier 2 Model Validation - Good place to start?

September 30th, 2014, 4:51 am

It's extremely difficult these days to get a quant job (or even an interview) with no previous experience, no postgraduate qualification in quantitative finance and no programming knowledge. It seems to me that you were very lucky to get to the last stage of a model validation interview.
Last edited by Marco72 on September 29th, 2014, 10:00 pm, edited 1 time in total.
 
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finallytrading
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Joined: September 28th, 2014, 11:57 pm

Tier 2 Model Validation - Good place to start?

September 30th, 2014, 9:33 am

Ashkar:Thanks, I understand re career path, so I guess that's definitely a negative.Yes, I have been doing badly, but I am a Pure Mathematician, meaning all my work has been theoretical - pen and paper work,unrelated to anything in Finance.No real programming experience, although I have an internship at a tier 1 IB in Risk.I have tried to assist with some teaching in my university's finance courses, to get some exposure.I am studying full time for these interviews now, but it's tough to cover enough material to compete with more experienced candidates and those with PhDs in Quantitative Finance.Dominic:thanks for the model! I have been trying for 2 months, but realised quickly how little I knew and how much was actuallyrequired, so have been trying harder. I have not encountered a single employer that seemed to prefer people who go through books themselves. They all don't care, and whether I get through or not just depends on how many questions I can answer,which I thought was fine, but others with Quant PhDs know way more. They are not at all lenient towards the fact that I don'thave the same background, which I can understand of course.For some reason, I never have problems getting interviews, on average I get interviews with 75% of the places I apply to, butI only ever use headhunters, so HR doesn't seem to come into play in my case.Macro72:I know, that's true, like I mentioned, I get many, many interviews, but rarely make it past round 2...My impression so far is:-> The problem is, I can answer the questions on areas I know, but the field is just too huge, there seems to be an infinite amount to study!-> I am always thinking, I should take anything I get, but like I said, I can't understand how my friends, who basically didn't prepare, have almostno finance experience, got those jobs. They mentioned they weren't asked any option theory or stochastic calculus! just brainteasers...
 
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ChicagoGuy
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Tier 2 Model Validation - Good place to start?

September 30th, 2014, 10:54 am

I sense that it is has something to do with your soft interviewing skills. Ask one of your friends who has landed a good position to give you a mock interview. And think hard about whether you are giving off some kind of negative vibe in the interviews.
 
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punkfanatic3000
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Tier 2 Model Validation - Good place to start?

September 30th, 2014, 11:54 am

Do your friends applied/are working in similar jobs that you are applying??In my opinion, employers are looking for people that are ready to work in most of the basic tasks of the jobs with some potential in learning and do the more complex ones. Soft skills and use of common sense are very important if you do not have practical experience.
 
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finallytrading
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Joined: September 28th, 2014, 11:57 pm

Tier 2 Model Validation - Good place to start?

September 30th, 2014, 2:33 pm

ChicagoGuy:Thanks for the reply. Unfortunately, soft skills is the one area I always get really good feedback on, literally every single time.It's the technical skills that are lacking, again mentioned by most, other candidates are just more experienced/stronger.In about 40% of the cases, they found someone before my next round, even if I was invited to it.punkfanatic3000:yes, they work on FO desks. I'm not sure of course, but in my experience, they simply do not care about anything other than how manyquestions you can answer how well. Whenever I get feedback, they just tell me which questions I needed too much help with, and which areas I lack knowledge of. Some told me, that the interviews in the traditional sense only start after you've passed 5-10 technical ones.How long do people usually have to prepare for, if they come from an unrelated field with little experience?
 
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finallytrading
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Tier 2 Model Validation - Good place to start?

October 1st, 2014, 7:50 am

Does anyone else have any opinions regarding the thread topic?
 
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CommodityQuant
Posts: 218
Joined: July 5th, 2007, 6:16 am

Tier 2 Model Validation - Good place to start?

October 1st, 2014, 8:29 am

QuoteOriginally posted by: finallytradingDoes anyone else have any opinions regarding the thread topic?I was going to leave this to those who know much more than me, but since you're canvassing everyone on this forum, I'll mention a few random things that occur to me. Please note that very few people are totally honest so there is a _huge_ difference in meaning between the reality that your friends "mentioned they weren't asked any option theory or stochastic calculus! just brainteasers..." and the assumption you seem to make that your friends "weren't asked any option theory...just brainteasers". If, for any reason (and there could be many), they would rather not discuss the technical content with you, the normal social thing is to avoid that discussion by pretending that there wasn't any technical content.Another point is that you leave out the crucial information of exactly what the problem questions were. If you included this information, we could help you better.CommodityQuant
 
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finallytrading
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Joined: September 28th, 2014, 11:57 pm

Tier 2 Model Validation - Good place to start?

October 1st, 2014, 9:13 am

Thanks, CommodityQuant.I mostly meant advice regarding model val vs continuing to interview.
 
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CommodityQuant
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Joined: July 5th, 2007, 6:16 am

Tier 2 Model Validation - Good place to start?

October 1st, 2014, 10:04 am

QuoteOriginally posted by: finallytradingThanks, CommodityQuant.I mostly meant advice regarding model val vs continuing to interview.Obviously, it's not close to being your desired job, or you would accept it without hesitation. Since you've had so much success at securing interviews, and you say you are failing to answer the questions correctly, my advice is simply to learn how to give better answers. I'm sure we can help you with that if you give us more of a clue as to what the problematic questions actually were.To reiterate, my advice is: Instead of taking the job you don't want, learn to interview better. CommodityQuant
 
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ashkar
Posts: 274
Joined: October 17th, 2011, 9:25 am

Tier 2 Model Validation - Good place to start?

October 1st, 2014, 1:08 pm

Its not a nice thing to do but you could sign the mv contract and continue looking. If you do find a much better job, you can effectively cancel the contract...I know of one example who did this at grad stage and managed to pull it off with just a minor reprimand from hr. I dont know legal stuff around it. Dominic will know better.Its not nice but its your career at the end of the day.
 
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GaleMartin
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Joined: March 20th, 2011, 4:09 pm

Tier 2 Model Validation - Good place to start?

October 1st, 2014, 7:38 pm

If you are in no hurry, don't take this offer. Though, paradoxically, model val could be more aligned to your current skill set (more advanced math and potentially less programming), it doesn't seem you would enjoy it long term, and it would certainly affect your career path. You were right saying that it's hard to prepare for every possible job in finance (moreover, once you get more specialized, you will even stop getting interviews in different fields). So, I suggest you pick a general direction you want to pursue (based on your interests and previous interview experience) and work on perfecting your interview skills in that area. Also, don't underestimate programming - it will be a big part of any quant job in one or another way. At least, you should be comfortable now with main OOP concepts and understand algorithms.
 
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Marco72
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Joined: March 14th, 2006, 11:09 am

Tier 2 Model Validation - Good place to start?

October 2nd, 2014, 7:29 pm

QuoteOriginally posted by: finallytradingThanks, CommodityQuant.I mostly meant advice regarding model val vs continuing to interview.Take it. In the current market, with little useful knowledge and no experience, it's very unlikely that you'll find something else at this stage. And in 1-2 years, you'll be in a much better position to apply for a more interesting role.
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