Courses for trading and risk management

[gradaplicant]

Hello everyone.

I am aiming towards a graduate degree in finance or financial engineering next fall and have a few questions. This thread is not about my applications or my intentions. I wish to take the degree as a technical training and to advance my knowledge before entering the workforce, since I have no previous training in the financial industry (tough having traded on my own I still feel the lack of training).

Recently I have been looking at the MFE program at NYU, which I find interesting because it is very flexible. As of now I am most interested in getting into trading, or something in that area (forgive me since I find it a little confusing to tell apart the jungle of job titles there are within an investment bank). I think I would consider a career in risk management as an alternative, as I have heard that having experience in the front office makes for a good risk analyst. It could also be a safe net if the career in trading does not work out (which by reading the forums here seems to be the case for most people that want to be traders).

What I wanted to here from the people here is what type of courses you would consider to be essential for this type of career focus? I know this might not relate directly to the quant role this site is designed around, but I think it might be in the same ballpark.

As to all of thous that are going to ask me to google it or read about the courses, I already have, I am just looking for a second opinion from someone who might actually have experienced this first hand. How much focus should be put on mathematics and programming for these careers (I know that knowledge in both fields helps but how deep should I go)? What other courses would you consider to be a must or you think would help the most?

 

[Ken Abbott]

Learn SQL.

 

[ExSan]

Learn SQL.

how can this help ?

 

[Andy Nguyen]

how can this help ?

http://www.quantnet.com/forum/threads/learn-sql.7554/

 

[Ken Abbott]

how can this help ?

My Firm's risk function gets billions of records per week. Whether you're developing methodologies or running reports, you're sifting through data first. Lots of data. Databases skills are the meat and potatoes. Quant skills are dessert.

 

[gradaplicant]

My Firm's risk function gets billions of records per week. Whether you're developing methodologies or running reports, you're sifting through data first. Lots of data. Databases skills are the meat and potatoes. Quant skills are dessert.

So you would say that knowledge in SQL is important for both a role in risk and trading?

I am taking a course in my undergrad study in SQL so this is good to know! Thank you

 

[Ken Abbott]

Key for risk. Not so much for trading. I tell my students that most of them won't end up trading anyway, so they may as well learn something useful.

 

[gradaplicant]

Key for risk. Not so much for trading. I tell my students that most of them won't end up trading anyway, so they may as well learn something useful.

I see what you are saying. But even though the chances are slim, there must be some courses or actions that you would recommend to increase my chances for a career in trading (be it algo trading, quant trading or just good old)?

Or is the only sensible thing to do to focus on trading on my own account at Scottrade and try to do well, while focusing my education on my backup plan in risk?

 

[roni]

First, I'm a current masters student so make sure you don't consider my opinion as the only or the best opinion... you have people here with far deeper knowledge than I do.

I don't think you can find any courses to teach you how to trade.
Perhaps game theory or some kind of probability course to work on your decision making skills. You can take general finance or econ courses to give you the background...
You will be applying for trading analyst and assistant trader positions.
Both types won't require you to have extensive knowledge.
I would say, read the WSJ, work on your mental math, decision making, communication skills.
Some more quant oriented companies like it when their assistant traders can program, so make sure you can program... don't know at what level though

Btw, I don't know if you know it but many analyst S&T programs target undergrads... it doesn't mean you can't apply, it just means that masters students are not their target.

Also, the fact that you go into trading doesn't mean you will be a trader right away or ever.

Visit the websites of a few companies, they have this section "Our People" or even "Our Culture", read through... there are interesting stories and opinions.

EDIT: if you were talking about quant/algo trading, please disregard my inputs... I'm less familiar with this area

 

[Swayum]

Key for risk. Not so much for trading. I tell my students that most of them won't end up trading anyway, so they may as well learn something useful.

Why do most of your students not end up in trading?

 

[Ken Abbott]

Because there aren't that many trading jobs and most of the trading jobs that do exist don't rely all that heavily on quants. That's not to say that there aren't other front office positions out there - marketing, structuring, sales, advisory, consulting to name but a few - but the ones where you're actually pulling the trigger and managing the risk yourself - those are few and getting fewer.

 

[gradaplicant]

Because there aren't that many trading jobs and most of the trading jobs that do exist don't rely all that heavily on quants. That's not to say that there aren't other front office positions out there - marketing, structuring, sales, advisory, consulting to name but a few - but the ones where you're actually pulling the trigger and managing the risk yourself - those are few and getting fewer.

What about a broker, would you put that in the same category as the trading job? Please excuse me if my questions seem naive, I am trying to figure out the lay of the land here.

 

[amanda.jayne]

What about a broker, would you put that in the same category as the trading job? Please excuse me if my questions seem naive, I am trying to figure out the lay of the land here.

No. A broker is, for all intensive purposes, a salesman. Sales traders are all but near extinct.

How much focus should be put on mathematics and programming for these careers (I know that knowledge in both fields helps but how deep should I go)?

None.

 

[Alexander Krosky]

None.

Depending on the position/desk, either of these could be very relevant.

If you want to go into quant/algo, develop your own systematic trading strategies. Spend as much time as you can working on them. Try to get some profitable (legitimate) backtests. Become an expert at the following: Q/Kdb+, Matlab, Python, Bash, Linux.

Personally, all of this substantially helped me to obtain my position. It's a discretionary trading desk but they were actively seeking someone who had programming skills. I think on the buy-side there is a trend to bring in more quant-oriented people.

 

[dillshau]

Alex Krause, Where did you learn kdb? Not many people learn kdb until they are actually in a bank/hedge fund due to the cost of actually using it (other than the play licence). I am currently working as a kdb+ developer in a hdge fund in NY. It's probably the main reason they wanted me.

I only have an undergrad right now so I am applying to a few MFE's (Baruch my top choice of course) , in the hope of moving from a "developer on a quant team" position to a "quant/trader on a quant team" position.

But I would definately echo your point, coding (and coding well) is SO important. It's the common reason so many people (in my firm anyway) get turned away.

 

[amanda.jayne]

Depending on the position/desk, either of these could be very relevant.

gradaplicant asked whether a broker would be put that in the same category.

If this is a route he is is considering pursuing (whether Institutional, or Retail/FA) quantitative skills are not directly (and often not even indirectly) relevant and can be perceived to be a hinderance in a relationship-based business.

 

[gradaplicant]

gradaplicant asked whether a broker would be put that in the same category.

If this is a route he is is considering pursuing (whether Institutional, or Retail/FA) quantitative skills are not directly (and often not even indirectly) relevant and can be perceived to be a hinderance in a relationship-based business.

Thank you for you answers. What sort of jobs are there in the front office where mathematical/analytical skills are considered to be an upside?