Theoretical Physics PhD going into Quant. Finance

[Dr. Ricky]

Hello All,

I'm a recent PhD in theoretical physics (in fact, got it last year) and now I'm working as a post-doc researcher. As the title suggests I'm planning to break into the finance world. I just want to know what the odds are for me and that's why I'm posting here. This is my first post as you can see but I wish I had discovered this forum earlier. Without further ado let me briefly describe what pertinent skills and knowledge I have:

- Seven years of quantitative research experience (undergrad + grad school and postdoc).
- Intuitive understanding of stochastic calculus and its application to finance.
- Numerical calculation and simulations with C++
- Probability theory, pricing and hedging withing the Black-Scholes framework.

So, I told my boss the idea of leaving physics recently, and he gave me a project that has implications to finance (I have a lot of respect for him since). Part of the project involves writing a Markov Chain Monte Carlo algorithm to estimate the distribution of the return of an asset with arbitrage modeled as quantum fluctuations. This has been shown to produce the "fat tail" distribution produced in real markets. I have already written most of the code in two weeks using C++ giving expected results.

So my question is, how do I maximize my chances from here?

 

[Andy Nguyen]

Hey Ricky,
Welcome to QN. The trickiest part is to find direction as finance is a changing field. Whatever you read 2 years ago may no longer apply. You will always facing the question, why finance and what you want to do in finance. Until then, it's hard to know the next steps.
Take a look at this
QuantNet Guide
https://www.quantnet.com/threads/how-to-get-a-quant-job-advice-from-wall-street-executives.4537/

 

[Dr. Ricky]

Ah! Thanks for the reply. I guess I left out what I wanted to to do in Finance. I have my eyes on risk management, quantitative research in a hedge fund, algorithmic trading and FX. This answers the 'What finance' question.

From what I understand so far these areas involve a fair amount of number crunching and programming, which I love. And this answers the 'why finance'. Given this, how should I proceed?

I'm working through "Stochastic Processes" by Ross right now. I would recommend it to everyone. A lot of challenging problems!

 

[Andy Nguyen]

For risk management, read everything that Ken Abbott posts on here.
https://www.quantnet.com/tags/risk+management/

 

[Dr. Ricky]

Thank you, you have been very helpful

 

[zxsilver]

Apply - Hoping to get interview in current market - Beating other Ivy league or Oxbridge folks to get offer
There are two books I feel useful
1. Quant Job Interview Questions & Answers
2. Heard on the Street
I have been applying Quant jobs for 3 months now, what I found is in the current situation, it is even difficult to get interviews in the first place; So be well prepared for the 'Quants questions' & be sure you can answer them well in those interviews; cos those 2 or 3 interviews are possibly all the interviews you could get this year.

 

[Dr. Ricky]

zxilver:

Thank you sir. I just ordered 'Heard on the Street', it was recommended by another person as well.

 

[albo]

Hello All,

I'm a recent PhD in theoretical physics (in fact, got it last year) and now I'm working as a post-doc researcher. As the title suggests I'm planning to break into the finance world. I just want to know what the odds are for me and that's why I'm posting here. This is my first post as you can see but I wish I had discovered this forum earlier. Without further ado let me briefly describe what pertinent skills and knowledge I have:

- Seven years of quantitative research experience (undergrad + grad school and postdoc).
- Intuitive understanding of stochastic calculus and its application to finance.
- Numerical calculation and simulations with C++
- Probability theory, pricing and hedging withing the Black-Scholes framework.

So, I told my boss the idea of leaving physics recently, and he gave me a project that has implications to finance (I have a lot of respect for him since). Part of the project involves writing a Markov Chain Monte Carlo algorithm to estimate the distribution of the return of an asset with arbitrage modeled as quantum fluctuations. This has been shown to produce the "fat tail" distribution produced in real markets. I have already written most of the code in two weeks using C++ giving expected results.

So my question is, how do I maximize my chances from here?

The market for scientists right now is a lot better than the market for "quants" in Finance. If you're smart enough (and you better be, since you hold a very respected degree) you must have already noticed that changes in modern Finance occur exponentially slower than changes in modern Science, which implies that a career as a scientist, assuming you are well-qualified and have a list of successful publications behind, will be more financially rewarding for you than a career as a quant in Finance. However, that doesn't mean things won't change anytime soon.
Also, it might be a good thing to look at the resumes of Math or Physics PhDs that are currently working in Quantitative Finance. You will notice a very interesting trend.

 

[Dr. Ricky]

Thanks albo!

I'd definitely look at the resumes of PhD quants. But what is the trend if I may ask?

And the future in my field of theoretical physics isn't looking too good. Funding is being cut already everywhere.

 

[Daniel Duffy]

Ah! Thanks for the reply. I guess I left out what I wanted to to do in Finance. I have my eyes on risk management, quantitative research in a hedge fund, algorithmic trading and FX. This answers the 'What finance' question.

From what I understand so far these areas involve a fair amount of number crunching and programming, which I love. And this answers the 'why finance'. Given this, how should I proceed?

I'm working through "Stochastic Processes" by Ross right now. I would recommend it to everyone. A lot of challenging problems!

I would say you need to be very good in C++ for this kind of job (Algo). So, if you like crunching it should be good for you.

 

[Ari]

nudge. Any followup on how Dr. Ricky turned out?? I'm in a very similar situation as him (phd theoretical astrophysics -> risk)