Do I Fit in Quant Finance?

A subscriber recently asked the question, "given my personality and interests, do you think I would fit in quantitative finance?"
This is a challenging question that each individual must answer themselves however it is important to understand what quantitative finance is really like. First off the misconception that finance is full of alpha male frat bros is mostly incorrect. Yes you might find a few but most people in finance are not like that. Second of all, quantitative finance is not really finance. It is statistics and mathematics applied to finance using programming. In my opinion quant finance is about 5% finance whereas the rest is math, statistics, and programming.
Investing vs banking is another interesting aspect. Many of the jobs in quant finance are similar in both areas however the speed of the work environment is much different. Investing is fast paced and more focused on developing new methods whereas banking is more stable however it slower to adapt new methods.
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[@anuragreddy2905]

Absolutely on Point! very useful to people who are deciding to pursue a career in quantitative finance.

[@anthonynohra3955]

Good video! Not enough info out there, so thank you

[@dnaluis]

thx for the video, coz i just had an derivatives interview with private bank....

[@anuragreddy2905]

Content request: please make a video highlighting the difference in the programs below: 1. Quantitative Finance 2. Financial Engineering 3. Computational Finance 4. Mathematical Finance 5. Financial Mathematics There a lot of programs with the different names and it will help if a person can understand the subtle difference between these.

[@Isaiah_McIntosh]

I think you need to look at the specific program. For a lot of programs these words can literally be interchangeable. Some of them could also mean crappy business degree with some maths classes. Focus on the content of the courses offered not the name of the course. To that end all of dimitri's why aren't you a quant or what makes up a quant program will guide one to choose a suitable program.

[@connorjones915]

@@Isaiah_McIntosh I second this. Most of these programs can be the exact same thing. Computational finance is slightly different from my experience though

[@DimitriBianco]

As my great subscribers have already pointed out, there really isn't a difference. In the past they may have indicated more of a specialty in math, computer science, or statistics however these days they are just marketing terms to attract students and employers. Good programs will be more rigorous and cover quantitative finance in greater depth than weaker programs.

[@anuragreddy2905]

Thank you everyone for the clarification!

[@andresrossi9]

It's the same stuff for all of them, except financial mathematics. That is a subject which includes a specific syllabus.

[@JurassicJolts]

You remind me a lot of my accounting professor. He was a pretty sharp dude.

[@DimitriBianco]

I used to work in accounting and corporate finance. Maybe there is some sort of connection. Accountants tend to be able to see how the parts work behind larger concepts like businesses.

[@MrWolfgangWeiss]

I work as a quant myself in finance but I honestly think the problems are a bit boring unless you are doing research. I am moving into tech at this point...pays better as well.

[@user-mg8yq4xp1v]

Can you please elaborate on that? Because quant interview is a hell of a lot difficult, so what the real tasks are?

[@revenantpneuma3636]

It pays better? How long have you worked as a quant?

[@MrWolfgangWeiss]

@@revenantpneuma3636 2 years, moved to tech a year ago

[@TheKhooger]

instant click to watch

[@domeniks1802]

Thank you for answering my questions. I think i will pursue a career as a quant researcher. That suits me more than traditional banking. Am I right?

[@DimitriBianco]

I would agree.

[@mihainicolae9020]

Hi, Dimitri! What is the final step in the quantitative finance work? Does the work output get integrated into an API/software that runs in production? Or do quants make recommendations to stakeholders? If it's both, what areas (types of quant finance) involve "software that runs continuously", and what areas are for "recommendations to stakeholders"?

[@DimitriBianco]

Quants build models and tools to do a lot in finance. Some examples include pricing assets (if miss priced someone uses this to trade), how large of a position should you take in a specific asset, portfolio allocation, pricing loans, loan origination, extension models, repossession models, credit limits, credit card approvals, predicting operational losses, and modeling all kinds of components in models such as PD, LGD, EAD, interest rates (and rate curves), volatility, growth rates, and cash flows. Quants don't make recommendations to clients. This is the job of business/finance people. Quants build models and strategies which are converted into tools and programs by CS people and then the final product is used by the end user which is usually by a business person.

[@mihainicolae9020]

Thank you for the explanation! It improved my understanding.

[@piyushchandak2384]

Hi Dimitri, I've been watching your videos for a few months now and thanks a lot for the amazing content you've consistently put up over the years. I can't thank you enough for the many insights I got from your videos. I have a personal question: I'm an Electronics and Communication Engineering Undergrad in India looking to pursue a Master's program in Finance (more specifically in Quantitative Finance and Risk Management). I will be applying to colleges this year, however, looking at the various aspects of prerequisites required, coursework, actual work in Quant Finance I feel a little intimidated and I don't know how to understand if I will enjoy working in this field. I love the new things I am learning right now, and a lot of the new stuff about Probability, Random Variable, Statistics really excites me. This change in the domain from engineering to finance is a bit scary and I don't know how to get know for sure if my decision is right. Is there a way I can write a detailed email to you?

[@DimitriBianco]

You can email me through the website or linkedin. www.fancyquantnation.com/ www.linkedin.com/in/dimitri-bianco/

[@small.j2184]

Hi Dimitri, Thank you for the insightful view. I'm current an accountant and just start to do corporate finance now with accounting as my undergraduate. maybe a little bit similar to your background. Right now, I'm planning to transfer my career to quantitative finance. Do you have any suggestion for me to switch career? Thank you

[@DimitriBianco]

My advice would be to take as much math and statistics as possible. I also recommend taking a least one computer science class as knowing how to program is very useful.

[@small.j2184]

@@DimitriBianco Thank you so much Dimitri. I'm starting to take online course from now to enhance computer programming skills and would apply a quantitative modeling related master degree next year in spring. Thanks for your advice! I'm really appreciate.

[@tlotlisomafereka3306]

Hi Dimitri. Would you recommend the Certificate in Quantitative Finance (CQF) as a good certification to help secure a job in the quant finance?

[@DimitriBianco]

It depends on the country. In the US, no most people won't consider an online certificate as the same as a grad degree. Now if you live and work in a country where there aren't many quant masters programs, the CQF could teach you a good amount of material to make a career for yourself. It really depends on where you are located and how competitive your market is.

[@RonaldoEuSi]

Hi! Love your videos. Currently, I am studying maths, physics and computer science. I have a huge interest for the math-banking jobs in NY but so also for the top-tech companies (FANG), (like most things connected to maths/physics/CS). Coming as an outsider, I feel like the most stable carrier would be Silicon valley, but I am not sure what to aim at since I know so little aboute the "finance"(math-banking) world. Compensation is a huge factor for me, as I feel like I in the future I want to be able to compensate people who helped me. Looking at it seems like Silicon Valley is a safer and better choose for some reasons: 1) You don't need a PhD, master degree is fine, and you can reach as far compensationwise as PhD's depending on your performance, many people in leading positions don't have PhDs (european defintion), for example, google CEO. 2) This goes hand in hand with 1), but, you are judged in virtue of what you perform, (interviews to get in, etc). It seems to me that in NY it isn't that clear, its hard to step your foot into the market, basically, as a non-american, a PhD to get a quantjob in NY seems like a must. 3) You work more hours in NY and worse whether 4) All together, as an outsider, it seems as if FANG companies are easier to get into than a top math-banking job with equivalent compensation (www.levels.fyi/), it is more stable, less hours, more sunny in CA, less years needed to study (important because I would like to be able to give back to my parents and others as soon as possible, before they get too old, 4-5 years phd takes time..) HOWEVER: I am willing to WORK to DEATH for a good compensation, IF it was the case, which it doesn't seem to be for me, that the salary for top-math-banking jobs are substanially HIGHER than Fang Salaries, I would seriously reconsider! It would mean the world the get a reply from somebody who's already within that world to give me some insight and general comments

[@DimitriBianco]

Both are fairly similar as careers go. Long hours and sacrifice are needed to be successful in anything in life. Tech has just done a better job at marketing their industry. Tech might be better for you though if you aren't wanting to get an advanced degree. Those in quant finance who do well enjoy school and are more than happy to get 1 if not more advanced degrees.

[@albertd7658]

Hi Jeger, I’m a junior applied math student transferring to UCLA or UCB(not sure which to choose yet), and I’m finding myself having the same exact problem as you right now. As you asked this question a year ago, did you find any solutions to your concerns? Cuz I’m really confused with either changing my major to CS or CE, and doing what in Silicon Valley. Thanks in advance!

[@kaancaylan1444]

Hi Dimitri, I am currently an undergrad finance student, what kind of masters degree, or additional undergraduate degree would you recommend for me to get into quantitative finance? Thanks

[@jmccullough975]

Just my opinion from doing research on the same subject myself as I currently am a political science major who was wanting to be a lawyer now switching to actuarial science and quant finance..... I believe that most of the data I looked up had a lot of mathematics and statistics as undergrad degrees. I believe that dmitri made a video on such as well. And STEM majors like engineering and physics work well too! Best of luck to both of us trying to get into quant finance. I just graduated from undergrad and going back to school to knock out a bunch of math and stuff

[@kaancaylan1444]

@@jmccullough975 Thanks for the reply! My bachelors degree is a bsc degree so it actually has lots of maths and statistics in it as well, I am thinking maybe studying maths by counting some previously obtained credits would be an efficient way for me. Could you also share the link to the video Dmitri made about this subject? Best of luck to you!

[@Youthinklehh]

Hi Dimitri First of all, thanks for your content, it is very insightful to hear from someone currently in the industry. Was hoping I could seek your opinion regarding a situation I'm facing. I'm a student studying in Singapore, and I'm on this course where it is a direct masters program. After the first 3 years, I will be graduating with a bachelor in business, and if my GPA is above 4.0, I will be eligible to continue on to take a masters in financial engineering, fully sponsored. My question is this: during the 2nd year in the course of my study, I have to specialise, and the options I am considering are Banking and Finance, Actuarial Science, Business Analytics, Risk management and insurance. 1) Banking and Finance will give me the prerequisite finance knowledge, but based on your video, it seems that the relevance is not as high for a financial engineer. 2) Actuarial Science is what I am most interested in, it has elements of statistics, math, and some programming which will be a good foundation for financial engineering. But im not sure how relevant it is after watching your video on "quant VS actuary" 3) Business analytics seems like a good alternative as well, with a greater focus on programming, which will be useful as well. 4) RMI is a relatively new course, to tackle insurance and financial risk management problems Which of the above do you think is the most relevant for a quant, and which would give the best foundation/basics/knowledge to allow me to transition into the MFE with greater ease? Would really appreciate any/all comments, thanks!

[@DimitriBianco]

Thanks for being a part of the channel! You are thinking about it correctly. I would do the Actuarial Science track. The basic education of statistics, math, and programming will be the same between financial engineering and actuarial sciences. As I pointed out in the video of "actuary vs quant" actuaries will not cover quantitative finance in enough depth however this won't matter for your undergrad as you are already planning on doing a masters in financial engineering. The masters is where you will learn the specialization in quantitative finance.

[@Youthinklehh]

​@@DimitriBianco Thank you for your prompt response!(-: I'll definitely take what you said into account while choosing my specialisation!

[@zhentongnoobx]

Hi, may I ask for the name of the institute you mentioned? I'm a student from Singapore as well!

[@deependrachaddha7137]

Hi, i have a master's in physics and am good at math and programming. Would it be necessary for me to get a phd or can I start trying to get a job as a quant? Do I have a good chance to make it as a quant or will I need a phd?

[@DimitriBianco]

There are a few factors to consider. A masters should be fine as long as you can show on a resume to employers that you have the skills they need. There is also the consideration on what city/country you are applying to for work. Most countries only hire people physically located there. Quant jobs are easier to find in well developed financial hubs like NYC, Chicago, Singapore, Hong Kong, Frankfurt, London, and etc.

[@jamesshkrelivanhoogstraten8040]

Have you ever thought about working in a hedge fund as a quant? What is your opinion on that

[@DimitriBianco]

I made a video response for you. I'll post it within the next few weeks.

[@jamesshkrelivanhoogstraten8040]

fantastic, much appreciated

[@nk_goyal]

Hey Dimitri, I am pursuing undergrad in Applied Maths in India and interested in taking up quant finance. Should I apply for Higher education or lookup for job opportunities right after graduation?

[@Isaiah_McIntosh]

Go to the states for your masters if you intend to work in the states, which is where most quant finance jobs are located. A masters tends to be the basic education required to compete in the quant marketplace. The industry is shrinking somewhat so you should try to be as competitive as possible. That's what I would garner from watching dimitri's videos.

[@DimitriBianco]

Isaiah is correct. If you goal is to stay in India and work in quantitative finance you might not need a masters however there aren't many quant jobs in India. If you want to make good money and have a variety of potential employers, it's best to come to the US to work. To get a job in a US firm doing quant finance you'll need at minimum a US masters in a quantitative study. Best case you'll get a PhD however getting a masters from one of the better programs will go a long ways in finding a job.

[@castan21]

I had an unconditional offer for MSc in Quantitative Risk Management With Machine Learning, this video blew me up, I am moving to MSc in Management and Finance, or just MSc in Finance. I am an Alpha Male.

[@jqn8361]

Birkbeck?

[@castan21]

@@jqn8361 yes but i cancelled it this year due to covid situation. Do you know something about it?

[@annajones9701]

Never thought about private equity?

[@DimitriBianco]

I thought about it. I didn't have the pedigree to get into a big firm and enjoyed doing quant finance more.

[@annajones9701]

@@DimitriBianco From my observation those with backgrounds in say Masters financial mathematics and quant etc related work tend to be far more smarter / deeper thinkers / more academic than say someone with a Master's in Finance and private equity from LSE who seem to more networkers/wheeler and dealers/rely more on connections/ less interested in academic part and sole interest on the money.

[@tonyyoon7860]

Hi Dimitri! I’m currently studying my second year for Financial Mathematics BSc in Canada and I was wondering how I would be able to break into the “quantitative” side of the industry as someone who has yet to finish their undergrad. A lot of the “Summer Internship” or co-op programs for firms in Toronto for quantitative analysis and risk/data modelling have minimum requirements of being enrolled in a Master’s program or higher. I’m against working entry level finance positions through the duration of my undergrad but I may be forced into that as I’m finding it REALLY difficult to go to the quant side. Any advice would be appreciated. Thanks! Also, a lot of my colleagues at school are working summers in capital markets and investment banking but I’d personally not like to enter the sell side of the market.

[@DimitriBianco]

I will post a video response.

[@francescomatera3022]

Beyond finance degree, frm or CFA can help?

[@DimitriBianco]

For quant finance, no. There isn't a designation for quant finance as a whole. That and designations are add-ons not solid foundations for education. To do quant finance you need at minimum an undergrad and masters in engineering, math, statistics, or computer science. A large portion of the industry have PhDs in quantitative fields.

[@Libero17A]

@@DimitriBianco What about the Certificate In Quantitative Finance(CQF) by Fitch Learning, is that any good?

[@DimitriBianco]

The CQF is good for those who already have industry experience. As a stand alone competitor to a masters or PhD, I don't think it's comparable, at least not in the US.