5 ms·

what do you do now if you dont mind me asking? how can one as a developer get into that field? I dream of front office positions at those places but the realit

what do you do now if you dont mind me asking? how can one as a developer get into that field? I dream of front office positions at those places but the reality seems grim

short_sells_poo 7y ago
Find a developer job at a trading firm and gradually move from being a developer to being quant developer and finally to a researcher position. Specifically, aim for systematic trading firms as the sort of work you'll be doing is not that far from what the actual researchers are doing. In discretionary trading businesses, chances are you'll be stuck with some boring back office stuff that is far removed from the actual money making. Furthermore, it's at systematic trading firms that a CS background could add the most value to begin with. Ninja edit: the business is very much based on personal connections and trust. Unless you have a stellar CV, it's your personal network that will get you to places. People who have worked together and have come to trust each other will tend to run into each other. E.g. you work for a PM who then moves on to another place, chances are they'll ask you to join them. Out of all the industries, trading is the one where you rely most on others not to sink your career through ineptitude or malice. Hence the extreme emphasis on trust. If you are a PM, it doesn't matter if it's one of your traders and not you directly who fucks up, ultimately you are solely responsible for the PNL. Hence PM's are extremely picky who they let in their circle, but then if you are in good graces, the world is your oyster. If you are the researcher/trader, you want the PM to be good and support you, because they are the primary multiplier of your performance. The PM's job is to devise the overall strategy and get money for your team. The more money the PM can secure, the more you can play with. This results in tight knit teams who tend to stick together through jobs. In case someone in your inner circle is starting a new venture, they'll by far prefer to fill in the positions among the most trusted connections before even thinking of looking outside.
- minhaz23 7y ago
  Thanks for the in depth answer, i truly do appreciate it. What should I begin studying to put myself in that position in finance?
  - short_sells_poo 7y ago
    Contrary to how it is often painted, finance rarely goes above undergraduate level stats. If you have a reasonable handle on that, you are already well set on becoming a quantitative researcher. If not, doing a couple of courses will give you a good grasp on most of what you are likely to encounter. If you like math, that's 50% of the battle won, because learning about the various methodologies will be an exciting discovery and not a slog. The well kept secret of the industry is that complicated stuff rarely works, and if it does, people often don't exactly know why. Put differently, a good algorithm has obvious and intuitive failure cases. That is, it is (relatively) easy to reason under which market conditions will it work well and when it will not. Extremely complex blackboxes are tricky because it's not obvious when and why they stop working. They are also very easy to overfit. Every single additional parameter you add to a model is an additional degree that you are likely to overfit just because of survivorship bias. It is for this reason that the absolute vast majority of systematic trading relies more on intimate market knowledge than very secret sauce and super complex ML strategies. Sure, many funds run some token ML crap (which is often quite vanilla, like gaussian processes or decision trees) with very minor impact on PNL, but this is purely for marketing reasons. There is a small handful of companies who have the manpower, expertise and infrastructure to run more complicated models, but even there, the fundamental ideas tend to be relatively simple, and the complexity arises from the amount of data and market idiosyncrasies.
    - jlelonm 7y ago
      > It is for this reason that the absolute vast majority of systematic trading relies more on intimate market knowledge Aside from reading books about market segments and biographies of companies, what are some things you can do to gain "intimate market knowledge"?
      - short_sells_poo 7y ago
        Unfortunately the best (only?) true way is by doing. I suppose prospecting is the best analogy I found. You study geology and gain some theoretical foundations so you understand the relationships and can analyze the results, but you have to go out in the terrain and get your hands dirty so to speak to get true intuition and understanding. Also, doing it on your own is tricky. You have to constantly talk and mingle with others or you quickly lose insight into current developments. Having a group of people to bounce ideas off of is incredibly important. On your own, every single small topic is a potential rabbit hole that you can spend endless time researching. In a crowd, someone has already explored that rabbit hole most likely and can give you practical pointers. At risk of sounding like a marketing prospectus, there's real synergy in being part of a team. I dare say the age of lone wolf traders is gone. They've been arbitraged away. Successful people have teams behind them. So I'd say the best way to gain market knowledge is to join a systematic trading shop (in almost any technical capacity) and once inside, you just talk with the others. People in systematic firms tend to have a solid academic approach and are usually more than happy to teach and enlighten anyone interested.
evanpw 7y ago
(I'm a quant at a trading firm) On the quant side, the somewhat unfortunate answer is "get a STEM PhD". My firm is always looking to hire quants who are also good (Python / C++) developers, but you'll probably not get past the initial resume screen without a PhD or other serious research experience.
- chaosbutters 7y ago
  that's a pretty low bar (know python and have a STEM phd)
  - icedchai 7y ago
    Is this sarcasm? Getting a PhD takes many folks well into their 30's. It's not a "low bar" by any means.
- bovine3dom 7y ago
  In your experience, are quant firms bothered about whether the STEM PhD had anything to do with finance? I'm considering trying to get into the field when I finish my Comp Sci PhD in a few months. I'm a little worried that my sole explicit financial qualification is that I really enjoyed a course on Black-Scholes towards the end of my undergraduate in Physics, although I probably would word that slightly differently on a CV.
  - evanpw 7y ago
    Probably a preference for non-finance fields of study. Might be different at hedge funds doing longer-term trading, but at the short end, academic finance is very far from anything being done in practice.
    - bovine3dom 7y ago
      Ah, that's great to know. Thanks for taking the time to reply!

what do you do now if you dont mind me asking? how can one as a developer get into that field? I dream of front office positions at those places but the reality seems grim

short_sells_poo 7y ago

Find a developer job at a trading firm and gradually move from being a developer to being quant developer and finally to a researcher position. Specifically, aim for systematic trading firms as the sort of work you'll be doing is not that far from what the actual researchers are doing. In discretionary trading businesses, chances are you'll be stuck with some boring back office stuff that is far removed from the actual money making. Furthermore, it's at systematic trading firms that a CS background could add the most value to begin with. Ninja edit: the business is very much based on personal connections and trust. Unless you have a stellar CV, it's your personal network that will get you to places. People who have worked together and have come to trust each other will tend to run into each other. E.g. you work for a PM who then moves on to another place, chances are they'll ask you to join them. Out of all the industries, trading is the one where you rely most on others not to sink your career through ineptitude or malice. Hence the extreme emphasis on trust. If you are a PM, it doesn't matter if it's one of your traders and not you directly who fucks up, ultimately you are solely responsible for the PNL. Hence PM's are extremely picky who they let in their circle, but then if you are in good graces, the world is your oyster. If you are the researcher/trader, you want the PM to be good and support you, because they are the primary multiplier of your performance. The PM's job is to devise the overall strategy and get money for your team. The more money the PM can secure, the more you can play with. This results in tight knit teams who tend to stick together through jobs. In case someone in your inner circle is starting a new venture, they'll by far prefer to fill in the positions among the most trusted connections before even thinking of looking outside.

minhaz23 7y ago
Thanks for the in depth answer, i truly do appreciate it. What should I begin studying to put myself in that position in finance?
- short_sells_poo 7y ago
  Contrary to how it is often painted, finance rarely goes above undergraduate level stats. If you have a reasonable handle on that, you are already well set on becoming a quantitative researcher. If not, doing a couple of courses will give you a good grasp on most of what you are likely to encounter. If you like math, that's 50% of the battle won, because learning about the various methodologies will be an exciting discovery and not a slog. The well kept secret of the industry is that complicated stuff rarely works, and if it does, people often don't exactly know why. Put differently, a good algorithm has obvious and intuitive failure cases. That is, it is (relatively) easy to reason under which market conditions will it work well and when it will not. Extremely complex blackboxes are tricky because it's not obvious when and why they stop working. They are also very easy to overfit. Every single additional parameter you add to a model is an additional degree that you are likely to overfit just because of survivorship bias. It is for this reason that the absolute vast majority of systematic trading relies more on intimate market knowledge than very secret sauce and super complex ML strategies. Sure, many funds run some token ML crap (which is often quite vanilla, like gaussian processes or decision trees) with very minor impact on PNL, but this is purely for marketing reasons. There is a small handful of companies who have the manpower, expertise and infrastructure to run more complicated models, but even there, the fundamental ideas tend to be relatively simple, and the complexity arises from the amount of data and market idiosyncrasies.
  - jlelonm 7y ago
    > It is for this reason that the absolute vast majority of systematic trading relies more on intimate market knowledge Aside from reading books about market segments and biographies of companies, what are some things you can do to gain "intimate market knowledge"?
    - short_sells_poo 7y ago
      Unfortunately the best (only?) true way is by doing. I suppose prospecting is the best analogy I found. You study geology and gain some theoretical foundations so you understand the relationships and can analyze the results, but you have to go out in the terrain and get your hands dirty so to speak to get true intuition and understanding. Also, doing it on your own is tricky. You have to constantly talk and mingle with others or you quickly lose insight into current developments. Having a group of people to bounce ideas off of is incredibly important. On your own, every single small topic is a potential rabbit hole that you can spend endless time researching. In a crowd, someone has already explored that rabbit hole most likely and can give you practical pointers. At risk of sounding like a marketing prospectus, there's real synergy in being part of a team. I dare say the age of lone wolf traders is gone. They've been arbitraged away. Successful people have teams behind them. So I'd say the best way to gain market knowledge is to join a systematic trading shop (in almost any technical capacity) and once inside, you just talk with the others. People in systematic firms tend to have a solid academic approach and are usually more than happy to teach and enlighten anyone interested.

evanpw 7y ago

(I'm a quant at a trading firm) On the quant side, the somewhat unfortunate answer is "get a STEM PhD". My firm is always looking to hire quants who are also good (Python / C++) developers, but you'll probably not get past the initial resume screen without a PhD or other serious research experience.

chaosbutters 7y ago
that's a pretty low bar (know python and have a STEM phd)
- icedchai 7y ago
  Is this sarcasm? Getting a PhD takes many folks well into their 30's. It's not a "low bar" by any means.
bovine3dom 7y ago
In your experience, are quant firms bothered about whether the STEM PhD had anything to do with finance? I'm considering trying to get into the field when I finish my Comp Sci PhD in a few months. I'm a little worried that my sole explicit financial qualification is that I really enjoyed a course on Black-Scholes towards the end of my undergraduate in Physics, although I probably would word that slightly differently on a CV.
- evanpw 7y ago
  Probably a preference for non-finance fields of study. Might be different at hedge funds doing longer-term trading, but at the short end, academic finance is very far from anything being done in practice.
  - bovine3dom 7y ago
    Ah, that's great to know. Thanks for taking the time to reply!