Phd or Internship to become a Quant

[hari_seldon]

Good morning, I am a former student who just graduated in computational science and engineering at a Swiss university and my dream is to become a quantitative researcher. Although it is often not required to have a background in finance, I don't think my background allows me to enter easily a hedge fund. Could a PhD related to machine learning and deep learning help increase the chances of being hired in the future, or does it make more sense to look for an internship in a less renowned company?
Thank you

 

[Chuanzhen Wang]

Hello! I am also an undergrad and just shared a post on the quantnet forum that I thought might be helpful for you! Bachelor's Degree to Quant Finance: Is a PhD the Only Path?

 

[hari_seldon]

Thank you very much, the problem is that I got a master degree in a field that is like applied mathematics (I have also good programming skills and experience in machine learning/deep learning projects, since my thesis is about deep learning), but I don’t know finance and I don’t know stochastic calculus. Can this be an issue to enter as new grad?

 

[Itachi]

Thank you very much, the problem is that I got a master degree in a field that is like applied mathematics (I have also good programming skills and experience in machine learning/deep learning projects, since my thesis is about deep learning), but I don’t know finance and I don’t know stochastic calculus. Can this be an issue to enter as new grad?

Imo for a new grad role finance knowledge shouldn't be a deal breaker. Most of the employers anticipate this from the candidate. But I think stochastic calculus is very important for most of the roles out there, both to clear interviews and in the job.

 

[hari_seldon]

Imo for a new grad role finance knowledge shouldn't be a deal breaker. Most of the employers anticipate this from the candidate. But I think stochastic calculus is very important for most of the roles out there, both to clear interviews and in the job.

Thank you, I have seen on the internet form previous interviews that they typically ask questions about basic probability/statistics, do these also include stochastic calculus/Ito calculus?

 

[Itachi]

Thank you, I have seen on the internet form previous interviews that they typically ask questions about basic probability/statistics, do these also include stochastic calculus/Ito calculus?

Depends on the role, but If you're comfortable with probability with calculus, then Ito calculus/ martingale shouldn't take too long to prepare. So better to prepare these concepts as well.

 

[hari_seldon]

Depends on the role, but If you're comfortable with probability with calculus, then Ito calculus/ martingale shouldn't take too long to prepare. So better to prepare these concepts as well.

Ok, thank you very much for the advice

 

[Chuanzhen Wang]

Honestly, I don't think not knowing finance is that big of a deal. Finance is a huge and broad field, after all. In my experience, if you want to work on tasks like designing quantitative trading strategies, you do need some finance knowledge. But the amount you need for quant finance, compared to finance as a whole, isn't that much. Generally, an intern can pick up the essential finance knowledge in the first week, maybe two at most. And during the rest of your internship, you'll naturally deepen your understanding.

This is why most companies don't treat finance knowledge as a major filter when hiring quant finance interns. What they're really looking for is someone like you—someone with a background in math, statistics, and computer science. So, my suggestion would be: just start looking for a relevant internship. By the end of it, you'll probably have all your questions about the quant finance industry and your own career path figured out.

Thank you very much, the problem is that I got a master degree in a field that is like applied mathematics (I have also good programming skills and experience in machine learning/deep learning projects, since my thesis is about deep learning), but I don’t know finance and I don’t know stochastic calculus. Can this be an issue to enter as new grad?

 

[Chuanzhen Wang]

Oh, almost forgot to mention, I also don't think missing a course in stochastic calculus will be a deal-breaker for getting into quant finance. I have some friends who work on option trading strategies on the buy side or option pricing on the sell side, and they need to be particularly familiar with stochastic calculus, PDEs, and other advanced math tools. But for most people, it's not a must-have. I think as long as you keep an eye on job descriptions when looking for opportunities, and avoid ones that specifically ask for 'proficiency in stochastic calculus,' you should be good.

 

[hari_seldon]

Honestly, I don't think not knowing finance is that big of a deal. Finance is a huge and broad field, after all. In my experience, if you want to work on tasks like designing quantitative trading strategies, you do need some finance knowledge. But the amount you need for quant finance, compared to finance as a whole, isn't that much. Generally, an intern can pick up the essential finance knowledge in the first week, maybe two at most. And during the rest of your internship, you'll naturally deepen your understanding.

This is why most companies don't treat finance knowledge as a major filter when hiring quant finance interns. What they're really looking for is someone like you—someone with a background in math, statistics, and computer science. So, my suggestion would be: just start looking for a relevant internship. By the end of it, you'll probably have all your questions about the quant finance industry and your own career path figured out.

Thank you very much, I graduated a few days ago, am I eligible for an internship or should I only apply for new grad positions?

 

[hari_seldon]

Oh, almost forgot to mention, I also don't think missing a course in stochastic calculus will be a deal-breaker for getting into quant finance. I have some friends who work on option trading strategies on the buy side or option pricing on the sell side, and they need to be particularly familiar with stochastic calculus, PDEs, and other advanced math tools. But for most people, it's not a must-have. I think as long as you keep an eye on job descriptions when looking for opportunities, and avoid ones that specifically ask for 'proficiency in stochastic calculus,' you should be good.

Thank you, I have a good knowledge about PDEs, both theoretical and numerical, but not about stochastic differential equations.
I don't think I saw knowledge of stochastic calculus as a requirement in the job descriptions

 

[Chuanzhen Wang]

Yes, that means you won't be rejected for lack of work on stochastic calculus.
In addition, I have to say that your math level is really enough, because this semester I am studying partial differential equations, which I believe is not an easy course for most people.

Thank you, I have a good knowledge about PDEs, both theoretical and numerical, but not about stochastic differential equations.
I don't think I saw knowledge of stochastic calculus as a requirement in the job descriptions

 

[Chuanzhen Wang]

I am now studying and working in Shanghai. In China, it is possible for recent graduates to find internships or full-time jobs in quantitative finance. But I'm not sure about the situation there. Maybe you need to talk to the person who created the position about this. Good luck to you! I wish you success!

Thank you very much, I graduated a few days ago, am I eligible for an internship or should I only apply for new grad positions?

 

[hari_seldon]

Yes, that means you won't be rejected for lack of work on stochastic calculus.
In addition, I have to say that your math level is really enough, because this semester I am studying partial differential equations, which I believe is not an easy course for most people.

the theoretical part of PDEs can be a bit heavy, but it is interesting, while the numerical part (like FEM) I found quite fun.

 

[hari_seldon]

I am now studying and working in Shanghai. In China, it is possible for recent graduates to find internships or full-time jobs in quantitative finance. But I'm not sure about the situation there. Maybe you need to talk to the person who created the position about this. Good luck to you! I wish you success!

I live in Europe so probably the job situation is not as good as in Shanghai or USA, but there are some good opportunities here too.
Good luck with your degree, I wish you a bright future

 

[Itachi]

I couldn't tell if you've taken a probability course( with calculus). If you haven't already, you would definitely benifit from learning this, either from some course or by self-study. You might not need to deep until Ito calculus, but you should be comfortable to some level i.e, continuous pdfs, Poisson process..
A good way to asses how deep would be to pick the green book and ensure that you're comfortable with the concepts required to solve the probability problems in it.

 

[hari_seldon]

Thank you, I know these basic probability topics, I just need to review them a little. Do you know any useful book to prepare for interviews, or are the exercises included in textbooks enough?

I couldn't tell if you've taken a probability course( with calculus). If you haven't already, you would definitely benifit from learning this, either from some course or by self-study. You might not need to deep until Ito calculus, but you should be comfortable to some level i.e, continuous pdfs, Poisson process..
A good way to asses how deep would be to pick the green book and ensure that you're comfortable with the concepts required to solve the probability problems in it.

 

[Itachi]

Thank you, I know these basic probability topics, I just need to review them a little. Do you know any useful book to prepare for interviews, or are the exercises included in textbooks enough?

This is a great book - A Practical Guide To Quantitative Finance Interviews (by Xinfeng Zhou), also called "the green book".

 

[achirikhin]

One needs to separate two questions: how to get the job and how to prepare to what you will be doing at the job.

In most (large) orgs the entry level interview process is industrialised to a degree. You will first be asked to do a math test (a problem set), programing test and you may have to do a psychological evaluation. Test may be done in person, evaluation can be done online. Then you have a face to face round. If test is not done in person, you may get more technical question during the face to face.

Math, algorithmics and problem solving skills will be most useful for the test and the interview, but not necessarily for the job. This is where your grad level of math, including probability and some stochastic calculus will be verified. Hence to prepare for that you need to practice math problem sets, including probability and stoch calculus and do programming puzzles on www.geeksforgeeks.org. It will probably suffice to do well in math, and not in financial math; the former is the proxy for your ability to learn the latter if necessary.

Once you do get the job, you will be learning it for around 3 years. There will be a lot to learn. The key goal of the job interviews is to gauge that you don't obviously fail after the first year. The goal (of a good interviewer, especially if it is somewhat a senior person) not to bring you down and to show you what you don't know.

The latter does happen sometimes for various reasons if more junior persons run the interviews. You have to adapt a bit, depending on who you are talking to, senior or junior. In a nutshell, it may be advisable not to come across as "too smart" with somebody more junior, as they are looking, in a way, for someone to replace them in their current job. (This is 100% the case for the MBA interviews). So you must be likeable, relatable to and you should obviously fit in with the juniors. You should absolutely shine and smash it if you have a chance to interview with a more senior colleague.

One way to better prepare yourself for the first years and, actually, to stand out during the face to face interviews with more senior people is to take my course, Quantitative Analyst, Developer, Strat: The Profession. Just doing it does not tick any checkboxes, but you will learn something special. It will both help preparing for all kind of business-related interviews, but will also help you manage expectations, and come up with Plans B and C. You will also learn that your Ito Lemma and PDE skills and the likes will be somewhat important in the real job, but not in the way you may think.

 

[hari_seldon]

This is a great book - A Practical Guide To Quantitative Finance Interviews (by Xinfeng Zhou), also called "the green book".

Thank you very much