After having a good look at what the PhD guys get paid in US for doing quant finance job, I think there is arbitrage between US & other countries such as Russia, India where PhDs get paid 1/20th of US salaries. Given the fast spread of high speed super-low cost internet connectivity, I have a feeling that major US corporates would start looking a outsourcing the CF needs from these kind of countries. I want to know the opinion of other members on this forum

I wouldn't worry about that.First of all, there are too few CF jobs around to worry about outsourcing. It'd make a lot more sense to outsource good half of the IT department instead. Also, CF jobs require a lot of live interaction with the traders, risk managers, etc. who are not likely to be outsourced or moved abroad.

Even having the quants sit on different floors than the traders introduces all sorts of informations disconnects

Even if you can virtualize the interaction through the use of different sorts of video conferencing systems, there is a difference in time zone that will require a delay. For example, If a quant comes up with an idea for a program, at 7am in the morning before market opens, if the CF is outsourced, the quant will have to wait til the next trading day before he even see a program. Basically, when you are awake and trading the rest of the world is sleeping. Due the delay and time zone difference, this won't happen any time soon. This shouldn't be keeping you up late at nights.

I think outsourcing of the IT requirements of quant outfits is possible. In fact, D E Shaw has its own software devp. centre in Hyderabad (India). Besides this co. I havent heard of any other big names from the quant world who are actually doing s/w devp. from India.Talking about India, exchange based derivatives trading was introduced about a year ago. I cant comment on the state of development & maturity of the Indian deriv. market but I do hope quant finance picks up in a big way here My perception is that the entire Asian derivatives market (except for Japan) is not very developed or active. So far I have only heard of 'hot' quant action in the US,UK & Euro zone markets. Any other thoughts on this ?MaziYyavasayaKalpana are you based in India ? If so, could you please send me a pvt. message. You seem to have disabled your pvt. messaging.Vikram.

Vikram is right...there's very little activity in the derivatives market in Asia. And most of the people I've spoken to in the industry don't have a clue what CF is...and these are senior people I'm talking about. Hope things will change...

People who are more buyside-oriented are more comfortable with buying software packages off the shelf and then fixing up the results as it suits them later... I would not be that comfortable doing this but a friend of mine gets quant support from India - he's hedging not-too-complicated IR risks this way, much cheaper than it would cost to pay someone like me. You have to realize that there is a whole lot of unsophisticated trading that needs to take place and requires nothing more than the back of an envelope. Big-firm traders, on the other hand, are making money by getting ahead of the models, and it would be pretty tough to do that real-time without the immediate availability of quant and IT support.

I am not sure how well trained and even aware of the subject people living in these countries are.Mathematical/Computational finance is a field of Applied Maths introduced during the last twodecades.

About the quality & training of people, I can say one or two words about India. The head of derivatives of one European Bank had came for (local) derivatives recruitment two years ago, when derivatives first started trading here. After having a few interviews, he was amazed at the knowledge of candidates from this country which had no derivatives trading till then.Also, when I last checked in 2000, FRM had the highest pass ratio of 100% from India(33% all over world). Many of you might say that FRM is not exactly a high quant platform. Fully agreed. Given that it is a first step towards quant, I think it is a good enough indicator, that in 3-4 years Indians can do to (low-level) FE what they have done to Software Development.

Couldn't disagree more about FRM... A friend of mine (recent immigrant from China) who did consulting in Korea said that he witnessed whole flotillas of FRM students whose only method of study was pure rote learning. They had no functioning knowledge. It is tough enough to get the right qualitative answer from a quant finance math student.

kr, shaileshdhuri & others,Could you please give me some names of firms in India who are doing derivatives related work. I am actually looking for an entry level position in derivatives (in India) & your advice in this regard would definitely be very helpful.Thanks,Vikram.PS - shaileshdhuri can I send you a pvt msg regarding this ?

Yes Vikram,Send me private message

There's also a clear arbitrage for the gifted quants in Russia and India. All it takes is for one of them to get a job in London of Wall Street...Oh wait... Never mind.

I totally agree with Slow Joe, there surely is. That explains so many recent hires from IIMs by banks in London despite the bad job market otherwise.

sahilesh..you mention the 1st step being FRM...whats the next. am keen to know since I have just appeared for the FRM in Nov. Am not too hot in Math..so what do you/other form mrmbers suggest..thanks