![]() While desk quants tend to gain the attention in investment banks, they're an increasingly small proportion of banks' quant universe. "When trading is largely automated and there are fewer traders, quants are better able to demonstrate their worth." Even so, he says it's still hard for individual quants to point to their personal P&L: "The electronic book is often group-managed, and in any case electronification eats dramatically away at trading margin." Not all quants can be desk quants "The best banking quant roles are in highly electronic product areas," says the director. Those who stay behind are advised to position themselves carefully. Most desk quants would jump at the opportunity to move to a fund, but few are given the opportunity. A PhD who's had the edges knocked off." They tend to want juniors who've spent a few years working in something like front office strats at Goldman Sachs. "Some of the highest paid people I've ever seen are "quants" running systematic trading strategies in hedge funds," says one headhunter. And systematic macro funds are willing to pay big money. After all, they're not the only ones chasing financially-literate quant talent: systematic macro hedge funds want it too. If they want to keep hold of the best desk quants, banks may need to up their game. As one quant puts it, this isn't bad for, "writing several lines of code," but it's also a frustrating when the traders using the tools you create are being paid a lot more. This means that while successful traders in banks can still earn £500k+ ($625k+), successful quants tend to find their pay bounded at around £250k, or less. As for quants? They are viewed by most people (traders, sales, senior management) as coders who are not completely useless." "Quants build the pricing models and algorithms that price derivatives, so they are revenue generating - but not as much as traders." The director-level quant puts it more bluntly: "A trader can claim that he/she "made" X amount a year, and shall be compensated as such. "Even though quants are crucial to a bank's profitability, they're considered to be more of a support function," says Max Soslove, a senior headhunter at GQR Global Markets. ![]() ![]() ![]() And because of this, they're not as well paid. But desk quants in banks aren't actually traders. They also create models that create strategies to direct trading decisions and that make traders more efficient. The desk quants create pricing models for these derivatives. Desk quants work with banks' traders to create statistical models to analyze trading book risks and identify opportunities to create complex derivatives to help clients. When people refer to quants in investment banks, desk quants are usually what they have in mind. Being a quant in a bank is a good as a job, but not as a career." Or you can move into management, where it's all about politics. "You can do the same job, and become better in your niche - but then you'll get pigeon-holed and your work becomes repetitive and you get seriously bored. "If you're a desk quant in a bank, you have one of two career paths," says a director-level quant at a U.S. We spoke to a selection of quants in a selection of functions and the sentiment was often the same: What about the career path? - What about the pay? Somehow, the quant love isn't getting through. If quants are banks' new most special employees, they don't feel it. Barclays CEO Jes Staley typified the mood yesterday when he said Barclays is building a, "new strategic data architecture," and, "looking at using data in new and innovative ways." Barclays needs quants. Banks are alert to the value of data, and quants are the alchemists who are supposed to turn their data into gold. While sales jobs in banks disappear and trading jobs are automated into mundanity, quants are the new thing.
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