Everything you need to know to become a quant trader (top 5 books)

UPDATED VIDEO: Everything you need to know to become a quant trader (in 2024) + sample interview problem
• Everything you need to...
Ive finally done it. I've summarized the top five books you need to read if you want to become a quantitative trader. I've gone through dozens of books, and here's what you need to break into the space and crush the interview.
www.codingjesus.com
Links below are my affiliate links. Make sure to buy a copy of a book you're interested using the link to help support my channel.
Option Volatility and Pricing by Sheldon Natenberg: amzn.to/3hqRglr
Dynamic Hedging: amzn.to/2TVvgGr
Frequently Asked Questions in Quantitative Finance (Second Edition) by Paul Wilmott: amzn.to/36rvg3E
Python for Data Analysis: amzn.to/2T6F1Bm
Introduction to Linear Algebra: amzn.to/3qXc47m
Advances in Active Portfolio Management: amzn.to/3xwSfpX
Technical Analysis is Mostly Bullshit: amzn.to/2TU3M41
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In this video I go over everything you need to go from day trading to becoming a quant trader, I introduce 5 books (six books actually). algorithmic trading quant trading and portfolio management everything you need to know like GARCH jump-diffusion black Scholes option greeks closed form solutions arbitrage put call parity cointegration kelly criterion and others everything you need to know interview as quant quant trader quant developer. break into quant trading with these books top 5 books. Day traders trying to break into quant trading

[@CodingJesus]

So anon, will you be reading these books or will you give up on your dreams?

[@kyuss0x1]

These books suck you are not real trader lol

[@rahulprasad2318]

Bro what are your thoughts on taleb? He is blue pilled on iq question :(

[@CodingJesus]

@@rahulprasad2318 He’s blue pulled on Bitcoin. You just take the parts of him that you like.

[@optimizedpran1247]

@@kyuss0x1 He isn't a trader but these books are pretty widely read in the quant community.

[@pazdowg]

@@CodingJesus CJ, is it true that most firms only hire graduates? Is it possible for someone to transition after a year in another STEM based role?

[@lallmanish90]

five books mentioned in the video: 1. Option Volatility and Pricing by Sheldon Natenberg 2. Frequently Asked Questions in Quantitative Finance, Second Edition by Paul Wilmott 3. Python for Finance by Yves Hilpisch 4. Linear Algebra by Gilbert Strang 5. Advances in Portfolio Management by Grinold and Kahn

[@rickyliuna9376]

What about General Python (Not For Finance) book?

[@Larussiecestlavie]

ty bro

[@gregorybennings8718]

Which book do you start with? What level of math do you need? I tried reading the Wilmott book and was confused.

[@MK-yg7zf]

Not a good move. Not a good move at all. Respect the content creators and the effort they put in.

[@gregorybennings8718]

​@@MK-yg7zf Took me 5 seconds to read that comment as opposed to 17 minutes to watch the video. It's a very good move, and an efficient use of time.

[@rickneibauer1]

I wish i could speak like you. One thing i notice that you are EXCELLENT at is recapping/summarizing or even rephrasing a potentially overly complex idea. You make things very digestible. Thank you!

[@galvinng1997]

These books are top notch! Independently arrived at this conclusion from Coding Jesus. Thanks for sharing with the community!

[@ganeshshetty625]

Thank You for the recommendations Coding Jesus!

[@juan3551]

I love all the information you give us and the peace you emanate through your videos ❤

[@Jean-Berry]

So happy to see you recommend linear algebra by strang and linear algebra done right. They are very underrated

[@jongxina3595]

ladr is awesome!

[@chrstfer2452]

Read the linear book ages before i decided to be a quant, and watched all the lectures. *HIGHLY* recommended.

[@yochonon4728]

Just discovered your channel, will be buying all these books, hope you keep posting.

[@avgb2115]

The video and information i was searching for weeks...I just can't thank you enough...👌👌👌

[@avgb2115]

@@condingjesus1...me...written

[@omarespino964]

Thank you for your INSIGHTFUL advice!

[@teenspirit1]

Python for data analysis is so hardcore, it starts off with time zones. The first thing you need to know about programming if you are trading a global set of futures.

[@abuusayd1932]

I'm trying read these books and work on the skills they are trying to teach their readers before I get into college

[@gamingandgunpla]

You know what makes your channel attractive to me? The lack of sensationalism. You're very cut and dry with what you're conveying. Anytime a youtuber uses sensationalism I am automatically skeptical. Sometimes it may just be their personality but with all these "Day Traders" selling their courses it's hard to not be suspicious.

[@master1dead2]

Yeap 🫶🏼

[@WhatsNextFam]

Such a back handed compliment , you’re pretty much saying you like him cause he’s boring 🤣

[@sentralorigin]

my top 5 are: 1) Harris - Trading and Exchanges 2) Sinclair - Volatility Trading 3) Taleb - Dynamic Hedging 4) Hull - Options, Futures, and Other Derivatives 5) Natenberg - Option Volatility and Pricing

[@moal5673]

Hull is the bible in my firm

[@khoadoan8966]

Hull is so godlike, it's the first book I've read and a reference for me until now

[@CodingJesus]

Sinclair’s felt way too choppy. He jumps from idea to idea in the span of a paragraph. Hull is too dense. I prefer the intuition to the theory. Taleb and Natenburg are my go-to.

[@robertmazurowski5974]

@@CodingJesus "I prefer the intuition to the theory" That is the language of technical analysis, Please stop doing this. Did you listen to the guy in the videos? Just watch a couple of videos.

[@gwagon3268]

@@robertmazurowski5974 basically this guy is a complete hypocrite

[@BryWMac]

returned to school to study math after starting my CFA journey and mainly liking the quant section, feeling lost thank you for this

[@itooflemma]

Good choice, get the PhD in applied Maths and quant finance won't be as hard to dive into. Personally I just did a MFE to skip 2 years.

[@strategy_gal]

Thanks for the recommendations! These are good ones!

[@abhijitkulkarni2504]

Awesome CodingJesus.Thank you.

[@ssublexff3465]

Linear Algebra as a Software eng student is the best part and probably the most used part of math in most of the fields. That involve eng or econonmics. It is surely beautiful and if you take time to understand the concepts you will get to love it

[@ropirito]

Hey Coding Jesus, thank you for all of this info in a straight forward way! Are there any certifications you would recommend we should get that would help get interviews in the quant space?

[@thegreatbambino3358]

Gilbert Strang's linear algebra course on open course ware is a must

[@inconnuxtd]

bruh this channel is pure gold, i found it by chance

[@conorlynch6711]

You are awesome man, such good content for individuals looking to break into the field. Keep up the great work.

[@jsha129]

Love Linear algebra by Strang. Probably one of the best books on applied linear algebra..much better than linear algebra by Anton. Linear algebra done right is good but it focuses on too much pure mathematics instead of applications.

[@christopherlucas1475]

Strang also has (bit older) course on MIT OCW that uses his book. I love Gilbert Strangs' approach. Got me through my undergrad LA course

[@locallyringedspace3190]

Linear algrebra and learning from data is another more recent (2019) book by Strang that I think is incredible. It has a much more colloquial tone and is an excellent read for a 2nd or 3rd pass of the subject.

[@BreezeTalk]

This is awesome dude, thank you so much

[@carolbricker4434]

Thank you. Love your videos

[@duyou2276]

Hey, Thanks your the content. Can you please make the same kind of video for Quant researcher.

[@jgfunk]

I read that first book like it was one of the books of A Song of Ice and Fire. Plowed right through it. Loved it.

[@bruvhellnah]

What prerequisite one must have before reading that book? I'm a recent computer science graduate.

[@jgfunk]

@@bruvhellnah basic math and analytical skills.

[@richardwalcott6373]

Good vid. My favorite is dynamic hedging. I first got introduced to nassims work after follow from reading Mandelbrot’s work. Very good book man. I would also suggest Mathematical Modeling And Computation In Finance by Oosterlee and Grzelak. I recently finished that i its pretty comprehensive. And the math is more applied than theoretical. Keep up the good work !!

[@sidddddddddddddd]

And the best part about the second book is that he has two playlists of video lectures based on part 1 and part 2 of his book.

[@user-hj2ls6gz3j]

Awesome Vid, Colin Bennett - Trading Volatility is a life and time saver and deserves credit. thx

[@sonuga]

This should have a thousand likes...lol. Indeed a time saver. ✅✅

[@coleyoutubechannel]

Thank you thank you thank you!!!!!!! Your videos are super helpful I really appreciate it

[@MrGlujaN]

Thank you I was looking for that books for a while 🤠

[@riankashyap1996]

This is beautiful. Thanks for being the light amongst the darkness @CJ.

[@raywhyms8441]

He is the darkness.

[@jigmet70000]

THANKS! a lot for sharing 👍

[@jyotishkochatterjee6837]

00:00 Top five books to read if you want to break into quantitative trading 02:18 Learn the basics of finance and advanced concepts with this reference book 04:36 Frequently Asked Questions in Quantitative Finance is a useful interview prep and refresher book 06:55 A refresher book for financial concepts is pocket-sized and helpful for quantitative trading positions. 08:57 Learn the fundamentals of Python, including pandas and numpy, time-series analysis, and data aggregation. 11:02 Read these four books to break into quantitative trading 13:09 Advances in Portfolio Management is a collection of essays for those interested in quantitative finance and portfolio management. 15:14 Top 5 books for quantitative trading

[@optimizedpran1247]

Question for CJ: at quite a few firms, it's reported that junior Quant-Devs have a much higher base than junior quant traders. Could you talk about this? I've heard that depending on the firm culture and strategies, sometimes it's the devs who are valued more whereas the traders are simply sitting in a chair staring at risk charts on software built by the devs.

[@CodingJesus]

You are right. Traders have lower base but higher bonus since their employment is a lot more contingent on performance.

[@user-gy7cy7os7g]

@@CodingJesus How do quant firms make most of their money? Is it arbitrage or just capturing the bid ask spread?

[@gabrielrodriguez8187]

@@user-gy7cy7os7g depends on the firm and desk, I know that JS does some of this but that isn’t their main thing as they aren’t a HFT firm

[@user-gy7cy7os7g]

@@gabrielrodriguez8187 Interesting! I think what CJ does at Akuna will probably be vol arb the difference between implied and realised vol.

[@vaibhavsalokhe7603]

The market variables in quant trading just seem really intimidating

[@evanchua7614]

Hi CJ for option volatility & pricing , there is a new edition should i read the new one or the edition you recommend?

[@janjonelcoronado9578]

Thank you Coding Jesus! I'll recommend your vids to my friends.

[@ryanhuang6318]

If the whole purpose of studying and understanding quant trading is to enjoy an exponential growth of your wealth, then why not trade for yourself at home instead of looking for a job trading for a firm? Since jobs offer you salaries which is linear growth, wouldn't it defeat the whole purpose of learning about quant in the first place?

[@LukeStevens-cz3dr]

Hey Coding Jesus! Do you think that Hull' Options, Futures, and Other Derivatives could replace Natenberg's book? Or at least is it a book you'd suggest for a quant library?

[@kaushal.mp4]

*@**1:28** min, You Really Cleared Off My Biggest Doubt Man! It was Huge Thought Relief Jesus!*

[@Jubeininja1221]

hey coding jesus. What level math do you need to be a quant trader? thanks for the video!

[@kilocesar]

great content man!

[@pegion89]

I coded technical indicators to get into trades and its been good so far.. Been 6 months.. I am only taking swing trades .. Will read through these for sure

[@nikolaiknight3606]

What language did you code these indicators in?

[@pegion89]

@@nikolaiknight3606 python

[@pilotgfx]

​@@nikolaiknight3606 yes

[@zg7860]

thanks for the content, like really man thank you

[@yelp70]

Thank you kindly for sharing these books. Regards from Sydney Au.

[@wajdanali1354]

I noted these "Option Volatility and Pricing" by Sheldon Natenberg "Dynamic Hedging: Managing Vanilla and Exotic Options" by Nassim Nicholas Taleb "Frequently Asked Questions in Quantitative Finance" by Paul Wilmott "Python for Data Analysis" by Wes McKinney "Python for Finance" by Yves Hilpisch "Linear Algebra" by Gilbert Strang "Linear Algebra Done Right" by Sheldon Axler

[@Brain.00005]

Can you talk about the work life balance for a quant??

[@tylascraig9306]

I already had Natenberg's book on the hit list because I've loved options for 2 decades now. I went ahead and added all of them to my Amazon book wish list except for Technical Analysis is BS. I just discovered your page, and I have doubts about you buddy. I did like the vid though.

[@unclek7175]

Thank you, Coding Jesus!

[@adam4311]

thank you for this information

[@amolgupta8894]

Can you please point to some reading content regarding some HFT strategies? I am aware of some very basic arb strategies and content beyond that seems to be too math-heavy.

[@rajtanwar5650]

Please make a review on the book Kelly criterion and fortune's formula. These are also underrated concepts in trading.

[@mikeygifford]

Nice! I’ll look into pandas instead of using lists and dicts. Maybe I can calculate probabilities easier that way

[@cryptocarnivore1776]

Thank you so much!!

[@RuneCutter456]

What math prerequisites do I need to start reading option volatility and pricing strategies (currently in my final year of engineering)?

[@Qliphirot]

Arithmetics and Algebra

[@julianbeatty2909]

Calculus 3, intermediate statistics, some linear algebra.

[@pietroghsvf]

Even you read the books and know everything, how would you get them to actually read your CV or to consider you if you're not already in the field either academically at university or professionally?

[@fminc]

Euan Sinclair, the zenith of options trading. Positional trading is really good too.I read Natenberg a couple of decades ago, but I didn't revisit it, cause he spent a lot of time on interest rates, which obviously don't matter. Gonna read it again. after this video. Thanks for the work kid. (I don't mean any disrespect with using the word "kid"). I never got past the 5th page of Taleb's book (he is a fav of mine, watch his black paper on Btc), lol, gonna try and hack its again. Wait, wtf happened, I could have sworn I saw a Sinclair book at the beginning, glitch in the matrix ?

[@upstateNYfinest]

Hey coding Jesus, I'm about to complete the CFA. Do you have any hot takes on it?

[@ericpezone7478]

@CodingJesus what do you think of the book 'Machine Learning for Algorithmic Trading' by Stefan Jansen?

[@quriositysquared1028]

Thank you man

[@iroegbulevi87]

@codingJesus pls it's not clear to me. Is Quant trading same as high frequency trading?

[@preetijoshi1437]

Hi. Thanks for great info on books. Just a question.. Do we need to read these books if we are CFA.. I mean does CFA cover almost everything what's in those books?

[@crentistDaDentist]

+1

[@koduruharikrishna520]

What is the qualification background required to became a trader

[@spyrex3988]

wish someone made a video like this on graphics programming

[@travelallarici]

Thanks for sharing Mr Jesus

[@Pkmafffy]

TL;DR I have the correct back round but have been working as a data scientist for 3 years. Do you think I can become a quant still? I has a first class masters in mathematical modelling from a UK top 10 uni which focused on fluid mechanics with one quant finance course which I got 81% in. I finished this 3 years ago and have been working as a data scientist ever since. I am coming to the end of being 26 years old and have been learning c++, been working through 'Hands on Machine learning for Algo trading' by Stefan Jansen, and am going to start reading the first book you mentioned and the book by Paul Wilmott. Do you think I still have a chance to get a job as a quant analyst or trader in the next 18months? Also, you content has really helped me so good job!

[@anthonyhall7449]

Yes! Go for it!

[@seigemain]

Any updates ?

[@MLAlgoTrader]

Wilmott book is the best!

[@NutsAboutData]

With all your blessings I shall prosper on this!

[@lovepreetsingh8498]

whats the difference between quantitative trading and day trading? Coming from the video you talk about why not to be a day trader.

[@user-wr4yl7tx3w]

what is the best book in 2023 on algorithmic trading?

[@manueldecara1119]

Can't wait

[@andrelim2428]

Would it be possible to break into the space as a quantitative developer with a bachelor's degree in computer engineering? One perception I have is that many of these firms may have a credential filter that only accepts people with at least a masters in financial engineering. Bachelor degree holders are mainly the people who will be doing model integrations and data processing. Do let me know if my perception is flawed and if you know people who broke into the space without post-grad credentials. Thanks!

[@pilotgfx]

no absolutely not! anyone with a bachelor in computer engineering is by default... DISQUALIFIED!!!! also you need to be at least 1.80 meters high

[@PhrontDoor]

Strang just retired. Got to see his send-off in person. He rocks.

[@ericmotocross]

You go to MIT?

[@PhrontDoor]

@@ericmotocross Went.. long ago. Got an invite to Strang's send-off and couldn't bear to miss it.

[@taylor_o]

good video... it seems everyone recommends "one of" hull, natenberg, taleb, or mcmillan as the reference text on derivatives. i wonder if anyone can give a comparison between these?

[@CodingJesus]

I found Hull way too dense when I was first starting. Sinclair is another name brought up and he assumes to much about your own background as he speeds through (at least in his book Volatility Trading). Natenberg asks questions almost in anticipation of what you’re thinking.

[@Qliphirot]

Colin Bennet's book on volatility it's the best on this subject

[@AB608052]

I.e. black scholes. Setting prices with historical volatility makes some sense, but if the prices have a obvious trajectory would you still do it? So then the volatility is "implied".. ok? But then really a good strategy in options is to sell contracts and buy them back.

[@zubrenostumbi8887]

can i be a Quant trader after master's in Quantitative Finance?

[@rawsteel6443]

Hey coding jusus, is it possible to use the knowledge in these books for personal trades and become a full time trader, or do you have to get a job at a htf firm because it's a retail trader does not have the infrastructure to execute trades in nanoseconds?

[@randomdude79404]

Good question +1 !

[@raywhyms8441]

If you want to be a retail trader stay away from options. Start with equities then after you get experience move onto futures. Avoid scammers on KZbin, including Coding Jesus. Don't read books on Portfolio management if you want to be a trader. Books on linear alegbra, python and data science are useful for testing ideas, and algotrading. Don't bother reading those Options books. The book on TA being bullshit is not true. There are many chart patterns that are a waste of time (fibonacci etc..), but TA is not a waste of time. Read market wizard books for the legit verified traders that have used it.

[@richardwalcott6373]

@@raywhyms8441 the TA ur talking about that works is trend following, which isnt really considered Technical analysis. And trend following only works in periods of high Autocorrelation (you can test this yourself dicky fuller,acf etc) and that need external datasets to forecast (Investor composition, institutional strats, HF composition etc)

[@SantoshLLC]

@Lelouch the Douche don't trust him

[@mvl3379]

@Lelouch the Douche the (losing 99%) retail trading worshippers/shills get butthurt by his last video. They refuse to acknowledge facts and statistics as usual.

[@1220MrCool]

Is Option Volatility and Pricing by Sheldon Natenberg a good book to start to learn about trading?

[@gmmkeshav]

Can you please tell the names 1:30 please I like reading complicated stuff Thank you

[@gabrielrodriguez8187]

Hey coding Jesus would you happen to have a good recommendation for a probability and statistics book?

[@CodingJesus]

Books on probability and statistics beyond your first year statistics course are more suited for quantitative researchers. That’s why I didn’t feature one here. It’ll be the topic for another video.

[@SantoshLLC]

@@ishaananand4779 Ask an ACTUAL quant analyst

[@wifeybaby4001]

Is this to learn about the stock market? I’m new to trading & stocks?

[@melantheoszimurri9981]

Do these books apply for forex traders

[@pw6790]

thx for sharing

[@user-qd7eo7xf8s]

I used to study mathematics(i have bachelor/master) what to study in advance level for quant trading

[@umarahmed3113]

Where are the best places to learn about programming through videos?

[@eyerocmedia5253]

whats the success rate of a quantitative trader in the market ?

[@thelastcipher9135]

Would those hard-to-read books be for quant researchers? Can you recommend books for quant researchers?

[@SantoshLLC]

ask an ACTUAL quant researcher

[@edgarusg6239]

this is the video i was waiting for, thank you jesus!

[@AB608052]

I got it now, I've been managing a online account now, for maybe 6 months. High frequency trading, it already sounded like a cheaters way. In the book about ADT, yeah, the guy says he came up with high frequency trading when he was high.. or he felt he confirmed the idea when he was stoned.. so I said, this must not be the method of a confident man! Right, so, you can sit at the bottom of the order book, doing 1 share at a time.. the regular speed algorithms everyone else is using will keep the order book nice and neat, and you can acquire or unwind at the same price as a small time trader. I was going to buy a book about it, I probably still will

[@tradermini2911]

if one can trade-why write a book???????????????????

[@gyanprakash25]

If purpose of KZbin is to watch videos, why to comment ????????????????

[@DengueBurger]

To make money or advance society/share knowledge

[@paf715]

A book is a pretty good source of passive income.

[@andrjsjan4231]

I didn’t get?

[@SyedAli-oe8tu]

I personally think it’s a good way to share your knowledge and experience. Also trying to perfect a system. I’ve been trading for little over 5 years now and I still make minor mistakes and correct them. The only way I realize the mistakes is when I review or make trade review videos and actually explain it out loud teaching myself what to expect in the future. Anyone reading this that can relate will understand what Im saying. It’s a feel good method. Some people like perfecting a system and some people like to be isolated and just trade. I don’t share my trades online but I document my day trades and go back and see what potential trades I’ve missed and what the reasoning for those trades are and in the future I have a better way to identify trades. Best advice is just stick to one ticker and master it. Main ticker to trade is /es or mes futures or the spy.

[@schrodingerscat3912]

like that chibi sized humble trader plug

[@smitpatel1436]

can you make a separate video about top books to read for Quantitative research field

[@CodingJesus]

Yes, I’ll get to that.

[@SantoshLLC]

Ask an ACTUAL quant researcher

[@umarahmed27]

Fantastic video

[@Leo-xv8uq]

Any1 have some books for quant dev or are they much the same?

[@scamperooniespanker8736]

lol the pic at 10:28 looks like the optiver office in the prudential building

[@SuperReddevil23]

I read Monte Carlo Methods of Financial Engineering by Glasserman, for my quant interview

[@patrickdurdenman7221]

Ridiculous my Friend, need to obtain all of those since it's exactly my goal to break into this field :-)

[@ariston111]

Where'd you get that shirt?