The demand for quantitative analysts – better known as “quants” – continues to rise as companies in this sector look for an edge over their competition.
Combining technical skills, deep math knowledge, and financial acumen, quants help companies properly price securities to lessen risk while generating profits. Ultimately, it’s a lucrative career path for the right person. What follows is a quick overview of the skills needed for a successful career as a quantitative analyst. Leverage these insights to create a training plan to help put you on a path to success.
Develop These Skills
The Responsibilities of a Quantitative Analyst
The typical quant spends their day designing complex mathematical models to predict the price of securities. This effort allows financial organizations to maximize the spread (i.e. profit) when they buy and sell these securities. Front office quants work closely with traders, helping them use the models on the front line, while others stay in the back office, doing the research and validation necessary for model development.
Front office positions tend to be more stressful compared to their back office coworkers and enjoy a higher pay rate as a result. Quants working with banks and insurance firms as opposed to stock traders perform similar tasks but using models based more on risk management.
As noted earlier, strong demand means high salaries. An entry-level quant earns up to $150,000 annually, while experienced quantitative analysts can expect anywhere from $250,000 to $500,000 per year.
A Quant Needs to Possess This Mix of Skills
Obviously, a deep understanding of finance is a must for a quant, especially extensive knowledge about securities and trading, or risk management when working in insurance. Specialized skills include portfolio theory, equity and interest rate derivatives, as well as credit risk products. Depending on the employer, specific knowledge in certain areas, like commodities or asset-backed securities is desired.
What separates quantitative analysts from other financial professionals is their mathematical acumen, including calculus, differential equations, linear algebra, probability, and statistics. It’s essential knowledge for being able to create the models used in trading.
Some programming skills, especially in C++, are a plus for candidates. Experience with mathematical tools, like MATLAB or SAS, is another requirement for most open quant positions. As far as education, companies desire candidates with either a Masters or a PhD in Mathematics, Finance, Economics, or Statistics.
In short, getting the right education and developing a robust mix of skills puts you on a career path as a quant.
Looking for an opportunity in FinTech?
If you need additional advice on your career, talk with the knowledgeable recruiters at The CERES Group. As one of the top financial and technical staffing agencies in Boston, we know the companies looking for the best. Explore these opportunities and apply today!