There’s a high demand for quantitative analysts because there are only a few people crazy enough to even consider it a career. A quantitative analyst, also known as a quant, needs to be well-versed not just in stocks, finance, and mathematics, but also in computers, as well.
They engage in quant trading, which employs complex mathematical formulas and computations to spot opportunities and pitfalls. In coming up with mathematical models, the quants will input price and volume into its formula.
Quants are in high demand, particularly among hedge funds and financial institutions. They typically deal with high-profile transactions with very high stakes (read: the money involved is often significant). You are looking at trading on hundreds of thousands and even millions in securities or shares.
If you want to have a career in quant trading, you need to possess the educational background for it. You need to have a fundamental experience in finance. But you need to be passionate about numbers, as well. That’s because you will deal with numbers every day and you won’t have any chance at happiness if you are miserable at your job.
As a quant, you will employ such techniques as:
Algorithmic trading -- Although you can also be an algo trader, and it’s a different job compared to the quantitative trader. There’s an overlap in the methods when you become a quant.
High-frequency trading -- High-frequency trading, meanwhile, is merely trading cranked up on the highest level in terms of speed. This is possible with the use of modern technology and automated software.
Statistical arbitrage -- As the name suggests, you will deal with mathematical models while you are mainly trading securities. You will mine voluminous data and employ analytical methods, in addition to automated trading software, using this method.
In terms of educational background, companies would insist on a post-graduate degree in financial engineering or a master’s degree with experience in quantitative financial modeling, among others.
You can also become a quant if you climb up the ranks while starting as a data research analyst.
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Quants fall into three categories:
According to Investopedia, an entry-level position will be very lucrative compared to the entry-level positions in other industries. For instance, if you are newly hired, you can already earn a six-figure salary, excluding commissions, incentives, and bonuses.
If you’ve had enough experience under your built and you’ve developed enough skills, you are going to have a very comfortable life. Those who are employed in major trading firms and hedge funds tend to have the highest salaries. You will encounter quant analysts earning as much as $500,000 and nobody bats an eye. That’s because it’s not that uncommon in this industry.
If you want to shift careers to become a quant, you may contact Matthew Owens. At a young age of 29, Matthew is already a well-established expert in the field of algorithmic trading and quantitative analysis.
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