Quant Roles

Most trading firms have 3 major roles - Software Engineering, Research, and Trading. The most common misconception I've noticed is the misunderstanding of the word quant. Put simply, quant translates to quantitative. Typically you'll see the word quant thrown in front of trading and research position names if it involves quantitative analysis (ex: quant researcher, quant trader). When people say they are a "quant," they are typically saying that they have a quantitative role at a trading firm, but many people think "quant" is a job. It is not. The main three roles, as mentioned before, are software engineering, research, and trading. These three different pipelines entail different essential functions to trading businesses.

A typical trading firm is split into desks based on what you're trading. Some examples of desks could include options market making, macros/index options, and specific sectors within the equities market. Each desk is typically comprised of researchers and traders who work together. Software engineering is typically seperate, because their work does not intersect as heavily with research and trading, however, certain software engineers may be working on projects catered towards a specific desk. Software engineering is typically split up by core function, such as execution services, low latency engines, and overall system development.

Let's talk a little bit more about what each role is like.

Software Engineering

Software engineers at a trading firm design the entire trading system, build low latency engines, provide execution services, and more based on the company. They build an infrastructure for the company to use to carry out it's day to day operations, whether that be executing massive amounts of orders, or providing low latency engines to make sure traders and researchers are getting data as fast as possible. Essentially, everything system based is handled by the software engineers. Software engineering positions at trading firms typically seek computer science majors, with the recruiting cycle consisting of online assesments starting from March - October, Phone Screens in September and October, and Final Superdays in Fall as well. Based on availability of roles, some firms also come to the Winter Career Fair and recruit well into the next semester.

Depending on the firm, software engineers are broken up into different teams, focusing on specific products or strategies. For example, a firm might have a group of Windows Desktop developers (C# and WPF) that develops a app that traders use to make large orders, and another team that writes strategies in C++ to run on Linux boxes closely located to the exchanges.

As an general software engineering intern, you will likely be completing general infrastructure work or contributing to small portions of ongoing projects. Example projects include web portals that hook into backend services, exploratory data analysis using pandas, and porting old code to new tech stacks. Due to confidentiality of data, larger and more impactful projects have to wait until you take on a full-time role.

Research

Research is essential to a trading firm, because its how companies keep their edge, outside of hardware. Researchers are given the challenge of solving complicated problems that are preveltant in the public markets in order to generate alpha and/or reduce beta. Researchers must have strong quantitative skills, because they model different things for pretty much every project they complete. Research projects can really go into any aspect of financial markets, so it's essential to have a broad skillset, becuase you will be presented with a variety of different problems. Research positions typically seek computer science, math, and pyhsics majors.

Quant Researchers for the most part use Python and the associated ML libraries. Also required is an understanding of college math at around a sophomore/junior level, so you should definitely brush up on linear algebra, multivariable and differential equations if you see QR in your future.

Most firms recruit QRs out of PhD programs in Math, Statistics, Physics, Data Science, and to a lesser extent, Computer Science. This is becuase QRs develop the strategies to trade with, which generally requires more math than a typical computer scientist would have. That being said, some firms (JS, Akuna, some others) do recruit QRs out of undergrad. They look for strong math background and probability skills.

Trading

Trading involves the core function of the business: trading. Traders days look a little bit different than researchers and software engineers, because there are more tasks involved with actively trading. Traders are typically split into 2 categories: quant/automated/systematic traders(what most people think when they hear "quant"/sometimes also called quant developer), and traditional traders. Quantitative traders work on implementing automated strateiges that run throughout the trading day, and automatically submit orders. Traditional traders are actively trading through market hours (9:30-4 EST / 8:30-3 CST), and are typically prepping for market open prior to maket open and are trading post market for about 30-60 minutes, to reduce overnight risk positions. Traders are also given smaller quantitative tasks, and build tools for their day to day trading. Trading positions typically seek any STEM major, but prefer computer science, math, or physics.

What's Right For Me?

All three potential roles, software engineering, research, and trading, involve strong quantitative skills, however, as you can tell, the day to day responsibilites for each are very different. In my opinion, it all comes down to personal preference. Do what you want to do. No function of the business is less or more important than another; you should be doing something you enjoy for your career! Additionally, there's no one else that can tell you where your interests lie, however, through MIG, we will help you understand where your interests lie.