I've heard quants are not as popular as before, due to regulations etc, there's less things to do in terms of maths and algorithms. I wonder if it's true?


closed as off-topic by skoestlmeier, Bob Jansen Dec 22 '18 at 11:35

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    $\begingroup$ Yeah there aren't any problems to solve any more. Everything is closed-form and self-writing software means everyone can go to the pub early. $\endgroup$ – James Spencer-Lavan Dec 22 '18 at 11:02
  • $\begingroup$ @ James Close form and self writing, do these mean that quants now work short hrs and go to pub easily after work? $\endgroup$ – feynman Dec 22 '18 at 14:34
  • $\begingroup$ @feynman James was making a joke. $\endgroup$ – Chris Taylor Dec 22 '18 at 16:33
  • $\begingroup$ @ChrisTaylor well seeing what time pubs are filled already in the city i can only imagine what “early” would be once james prediction comes true :) $\endgroup$ – Ezy Dec 29 '18 at 5:54
  • $\begingroup$ Suspect the early pub-goers will never be quants / strats, no matter how good the self-writing code is ... :) $\endgroup$ – James Spencer-Lavan Dec 30 '18 at 15:49

The kind of jobs a quant would do has changed a lot since the crisis. I wouldn’t say there is more or less demand for quants, just that there is demand for them to do different things. For example,

  1. Certain derivatives and structured products are less popular than they were before the crisis. For example, exotic equity or fixed income derivatives see much lower trading volume and hence less demand for quants to work out how to price and hedge them.

  2. Credit products are more straightforward now, and less popular. CDOs got a bad reputation after 2008.

  3. Funding costs, liquidity, collateral and counterparty risk are taken seriously now, so linear desks have more to do (building funding curves for different currencies and different grades of collateral) and XVA desks (comprising credit, funding and liquidity valuation adjustments) have grown.

  4. New regulations on bank capital mean more work for quants, both to ensure that regulations are complied with, and to optimise the bank’s capital structure for the new regulations.

  5. Electronic trading has grown, and quants are required not just for their traditional role (models for pricing off-market derivatives like swaps, options and forwards) but also for the roles that would traditionally have been done by human traders (inventory management, pricing, hedging decisions).

  6. Quant hedge funds have grown, and even discretionary hedge funds often hire quant teams to analyse the large amounts of data being produced by sell-side brokers and alternative data providers.

In general I think that it is harder to walk out of a PhD in math or physics with no experience, no knowledge of finance and no programming ability, and get a job as a quant. But that’s not because quants have become less popular or less in demand - it’s because the supply of good quality candidates has increased, and employers increasingly expect applicants to have finance knowledge already, and to be able to write good quality code from day one.

  • $\begingroup$ Thank you very much. I have no knowledge in finance. I'm thinking of doing a Master's in quant or data science. Maybe data science is more useful because it's also used in quant jobs now? Also data science seems to have more demand than quant? $\endgroup$ – feynman Dec 22 '18 at 14:02
  • $\begingroup$ Data science is more widely applicable outside of quant finance, but less useful for getting a job as a quant (unless you very specifically want to go for quant jobs that are very heavy on data analysis). $\endgroup$ – Chris Taylor Dec 29 '18 at 21:28

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