A quant job: the easiest job that pays $100,000 out of college?

[Phil]

Hello QuantNetwork,

For the past month, I have been interning at a small-size (under a billion) hedge fund in Hong Kong. It's mostly front end office work - doing calculations and automating orders once live prices come in. Indeed I am an intern. Nonetheless, I have been observing my fellow colleagues in particularly this one guy (ex-JPM) in charge of three strategies trading in local stocks.

To be clear, he's a quant purely in charge of algorithmic trading. He doesn't trade live and he doesn't meet clients. And seeing what he does, I sometimes feel that quants may have the most stress free and high paying job in the world. At times I do get a sense of injustice that we are paid that much. He comes to office, have a chat of some trading strategy, call up some of the network guys to check the internet connection, do some programming on NetBeans and then leave. I tell myself, THIS IS THE BEST JOB IN THE WORLD. Am I blinded by what reality really is?

Some quick calculations does add validity in what he actually earns. As estimates (and these ain't far from the truth), say the hedge fund manages $500 million. From what I read before, there's always a 2% administrative fee. That's $10 million a year in guaranteed profits. With 10 people on the team (roughly the correct size for a small hedge fund), that averages to $1 million a person a year making $100,000 pale in comparison.

So do quants really have it easy? Best thing, he only works office hours, that is 9 hours a day. If I get such a job, it'll be the best thing that has happened to me.

Thank you,​

Phil​

 

[alain]

That's $10 million a year in guaranteed profits.

Guaranteed revenue, not profits. A piece of the 10 million goes to pay all the operations stuff: electricity, data feeds, rent, whatever. Think about it this way, if you are good enough to raise 500 million (raising money is harder than you might think), you probably deserve that 10 million up front.

 

[Phil]

Yup, agreed it is $10 million of guaranteed revenue. However, I would also like to mentioned that this is the guaranteed sum. Should the firm make a 10% profit from trading, that's 8% more to distribute around. Maybe 6% goes to the investors, left with another 2% for the staff.

A more interesting point though. I never took the time to read up about raising revenue. Raising $500 million in Asia from a 10 man team sounds respectable?

 

[Ken Abbott]

For every story like this there are fifty untold stories of smart people slaving away for wages that, on a per-hour basis, are far from spectacular.

 

[Abdel]

For every story like this there are fifty untold stories of smart people slaving away for wages that, on a per-hour basis, are far from spectacular.

Exactly.

A friend of mine is a quant who works for an IB in Bahrein/Qatar and he works his a** off.

Sure, he makes +100k/year but at what 'price'.

 

[Alexander Krosky]

Starting salary isn't everything. It's much more about how much you'll learn and the routes that will be opened...

 

[Phil]

Exactly.

A friend of mine is a quant who works for an IB in Bahrein/Qatar and he works his a** off.

.

Hey Abdel, this 'working ones a** off' is what I wanted to check. Base on what I hear so far, quants have it much easier than the other people in M&A and still get paid the same amount, like you said 100k/year. The reason why I say this is that my image of a quant is create models, program, repeat and no interaction with clients. It seems that you are in total control and provided that you are a top 10% programmer / math person, there isn't a variable work factor coming to you that may cause you to stress out.

Viz-a-viz M&A or to a larger extend, sell-side job. You need to hunt clients, change things to their request, coordinate with people for presentations, etc. There is a lot of unknown factors that could add to your work. The question here is that being a quant is the EASIEST way to $100k relative to other jobs that pays the same amount.

Starting salary isn't everything. It's much more about how much you'll learn and the routes that will be opened...

Thanks Alex for this comment. It is reassuring to know that while I may not earn what the IBankers earn as their starting pay, I really hope my training at a hedge fund, and the contacts I make, pan out in the future.

 

[Ohad]

Hey Abdel, this 'working ones a** off' is what I wanted to check. Base on what I hear so far, quants have it much easier than the other people in M&A and still get paid the same amount, like you said 100k/year. The reason why I say this is that my image of a quant is create models, program, repeat and no interaction with clients. It seems that you are in total control and provided that you are a top 10% programmer / math person, there isn't a variable work factor coming to you that may cause you to stress out.

Viz-a-viz M&A or to a larger extend, sell-side job. You need to hunt clients, change things to their request, coordinate with people for presentations, etc. There is a lot of unknown factors that could add to your work. The question here is that being a quant is the EASIEST way to $100k relative to other jobs that pays the same amount.

Thanks Alex for this comment. It is reassuring to know that while I may not earn what the IBankers earn as their starting pay, I really hope my training at a hedge fund, and the contacts I make, pan out in the future.

To be honest Phil...it seems you're talking out of ignorance or jealousy , what exactly is stress-free in creating a model that will determine if you're company will go bankrupt or not? Since when the financial markets are completely deterministic and all the variables are known to all as you describe them?

You make it sound as if a Quant comes into to work, open the magic chart with all the variables in the world with an already ready program that gives the perfect solution for profit and just press run.

Many times it's much easier to outsmart/convince/etc a client than to do the same to the financial markets...they are less obedient

 

[Phil]

You make it sound as if a Quant comes into to work, open the magic chart with all the variables in the world with an already ready program that gives the perfect solution for profit and just press run.

Many times it's much easier to outsmart/convince/etc a client than to do the same to the financial markets...they are less obedient

Hello Ohad. Perhaps, I would like to be a little clearer. I am for the job of a quant over that of a M&A Banker. In no way am I jealous of them, more accurate to say I really want to figure what they do.

Then I guess it's a matter of what one prefers to do. Totally in agreement with you in saying that financial markets are less obedient. Nonetheless, I would consider sitting in front of Visual Studio and tweaking a model much less stress than running around putting a deal together, granted that I absolutely don't know any details of the latter. Indeed, it is not merely a magic chart. There is some real s*** calculating derivatives with a slew of stochastic calculus, dynamic programming and C++. Yet, if I would rather deal in the world of math and deal with other people. And if this world of math gives me $100k a year, then great!

I still stay by the fact that, and you can correct me if I'm wrong, quants work office hours ~9 hours a day, and iBankers can, well you know, work 16 hours a day.

 

[Andy Nguyen]

Some reading would give you better idea of what quants do and where do you think you can fit in. The list is in my signature.

 

[Ohad]

Hello Ohad. Perhaps, I would like to be a little clearer. I am for the job of a quant over that of a M&A Banker. In no way am I jealous of them, more accurate to say I really want to figure what they do.

Then I guess it's a matter of what one prefers to do. Totally in agreement with you in saying that financial markets are less obedient. Nonetheless, I would consider sitting in front of Visual Studio and tweaking a model much less stress than running around putting a deal together, granted that I absolutely don't know any details of the latter. Indeed, it is not merely a magic chart. There is some real s*** calculating derivatives with a slew of stochastic calculus, dynamic programming and C++. Yet, if I would rather deal in the world of math and deal with other people. And if this world of math gives me $100k a year, then great!

I still stay by the fact that, and you can correct me if I'm wrong, quants work office hours ~9 hours a day, and iBankers can, well you know, work 16 hours a day.

By your logic anyone who does computer related work has no stress....you seem to forget that the objective isn't for them to sit and program but to make money. This means that they have a huge stress in terms of timetables and money making.

If it takes you months to come up with something that makes little money than you're out of the door.
Regarding the hours, it all depends on the company/person/situation -> small companies usually require more from their employees due to the lack of manpower / if you have ambitions than you will work more than you officially need / if there is a turmoil in the financial markets, if the end of the project is close , if your algorithm doesn't give out good enough results, all these and other situations can make you bust your ass and be under serious pressure.

 

[Yike Lu]

Yet, if I would rather deal in the world of math and deal with other people. And if this world of math gives me $100k a year, then great!

Some people find it much easier and less stressful to deal with other people than to deal with math. That probably stands in stark contrast to most on this forum.

 

[Andy Nguyen]

Most people on this forum will mostly deal with computer, exponentially more than with people or math.
I'm somehow uncomfortable with reading "easiest job that pay $100K". I don't know there is such a thing. If the job is easy, you don't make $100K. If you make $100K, it's not easy or you hate it.

 

[JulianT]

In my limited experience in the finance world, quants tend to be in the back or middle office in investment banks much more than front office, which is why they work 8-5. Structurers tend to work iBanker hours. And if your on the IT side developing software, well you're a cost center. I cant speak for the buy side, since my only exposure to buy side is with conventional stock picking hedge funds. Finance, even quant finance, is a relationship driven industry. Client relationships, whether you are buy side or sell side is what will give you job security.

 

[CrazyRussian]

I second Andy's statement. If it's easy, anyone that wanted to make $100k would do it. Plus, as we all know, in economics, there is no free lunch.

I'm sure most quant jobs are pretty stressful. Traders are worried about their portfolio positions. Developers are constantly trying to meet deadlines and debug code. I believe that any job that envolves huge sums of money are stressful, even more so when you are trying to program a machine to move that money around.

 

[Phil]

Most people on this forum will mostly deal with computer, exponentially more than with people or math.
I'm somehow uncomfortable with reading "easiest job that pay $100K". I don't know there is such a thing. If the job is easy, you don't make $100K. If you make $100K, it's not easy or you hate it.

Hello Andy, Phil here. Yup, after reading all these post, perhaps I should have started off with a different title. After this, I might actually read some books from that reading list you mentioned.

Some people find it much easier and less stressful to deal with other people than to deal with math. That probably stands in stark contrast to most on this forum.

Developers are constantly trying to meet deadlines and debug code. I believe that any job that envolves huge sums of money are stressful, even more so when you are trying to program a machine to move that money around.

Thanks everyone for their contributions. I am getting a clearer picture of the job of quants, developers and that of bankers at IB specifically with respect to the level of stress. There seems to be no $100k stress free job. Yet, I hope its correct in saying that how difficult the stress, or to a large extent the nature of the job, is dependent on the person. Take this extreme example, restricted to the quant developer.

Debugging countless of lines (recalling my experience of finding the maximum profit by going through all the parameters of four moving averages), programming a multithread a user interface and thinking of a customized data structure to decrease runtime can be a drudgery for the average programmer in me. But put a Putnam Honorable Mention, Google Code Jam finalist and BattleCode winner guy there and I would hope he'll find that stress free.

I respect the top 1% of these people out there; I'm about in the top ~45% percentile. My argument is that when it comes to the computer programming, and just the computer programming, these people got it easy.

 

[Alexander Krosky]

As others have stated, it is rare that you can make 100k+ base fresh out of school and not have to sacrifice something for it (time, sanity, intellectual stimulation). That being said, I still think it is possible (if we are talking about masters students here). I know there are research roles where you work 8 hours a day and get paid this amount. Research roles tend to amplify the variance in abilities among prospective workers, so the barrier to entry is actually in mental dexterity. One person might be extremely creative and have impeccable foresight, so his 8 hours are worth 40 hours of less-direct production from someone else. This discrepancy isn't possible in a lot of other positions due to the nature of the work.