Monday, September 10, 2012

How to Become a Quant (Quantitative Analyst) in Investment Banking

Quantitative analyst more commonly called "Quant" are working mostly in financial institutions such as investment banks and hedge funds. The main role of a quant is to use mathematical knowledge to design research, modelling derivatives products, risk management or the creation of trading strategies.
Quants are very demanded on Wall street with the increase of financial products and especially derivatives securities, they are considered as core employees of investment banks, and firms are fighting against each other to get the best quants.

What Degree to choose?
In the past era, it was required to have a Phd to land a job as a quant, most of them were at that time Phd graduates in mathematics, physics majors, but this is changing with the increaing demand for graduate from master of financial engineering or computation finance. The best universities for Master of financial engineering (MFE) are Carnegie Mellon located in the centre of Wall street, whose graduates are very appreciated from recruiters, Columbia and Cornell University also propose similar programs that are amongst the most selective and complete ones. MFE are very quantitative programs and require you to have some solid mathematical and programing background.

What should I learn for becoming a Quant?
The answer is not precise, the more you learn the best you will be in any domain, but the depth of a quant's knowledge will be different across companies, for example a quant working in front office will need a good understanding of markets to implement his/her mathematical skills. On the other hand, a quant working as a developper will need solid programming knowledges such as C++, VBA, etc. as she/he will have to code in a very fast-pace environment with a lot of pressure. The last type of quant is the arbitrageur who will have to get a good understanding of derivatives products, econometrics models and statistics.

More generally, the ideal candidate for a quant position will be the one with the deepest knowledge of mathematics, statistics and programming related to finance, that's is why Financial engineering graduates are very appreciated as they have both mathematical and financial understanding.


investingskills said...

nice guidelines for investors on
investment banks , great post!

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