Advanced Degree Paths into Trading
 

I know David Shaw and James Simons both have very advanced quantitative degrees. I think I've read that trading is expected to get more and more quantitative as time goes on.

Right now I'm an Electrical Engineering undergrad so have some quantitative knowledge -- what would be some recommended paths to getting into trading?

Few thoughts:

1) MS in Financial Engineering -- some top schools like Princeton and Columbia have programs, along with others like UIUC. Seems like a nice intro to get into trading job, but 1 year isn't that long. Maybe couldn't get hired as a quant since not a PhD, so starting off where I would without the degree?

2) MBA with focus on quant stuff -- if I'm gonna get the MBA anyway, does this kind of ruin the purpose of the MS?

3) PhD in Operations Engineering (or maybe math or stats or something) -- Takes a LONG time and seems like a lot of extraneous work for someone who just wants to go into trading or something similar.

4) Straight into trading -- I'm not clear on what goes on, but I feel like quants often get "used" for their intelligence, but not really paid that well for what their work can accomplish. However, the guys who run some of the top HFs have PhDs. Can someone clarify this -- do most top guys have advanced degrees? Is this really that helpful or can you just hire the quants (unless you're so smart that you can devise your own models)?

Re: Advanced Degree Paths into Trading
 

As a former WS trader,I have just started reading this BFI forum and truly enjoy helping and adding anything I can from my experiences.
I am however amazed at the # of posts/replies that just emphasize the numbers/math side of the game when approaching their schooling/degrees to become a trader.

Two of the BEST traders I knew on the floor,didnt graduate HS,and have made a fortune,each buying their respective seats.

Being that this is a POKER site I will use this analogy as an example:

David Sklansky probably knows more about probabilities,odds,+/- EV situations/written a zillion books than any body on the planet.....yet I wouldnt back him in ANY HS poker game with YOUR money.He would get eatin alive over time...and HE probably knows it as well

Wallstreet is also HS "game" ,not for the weak of heart,that requires balls,feel etc. that is not all "math related",and time will always weed out the best/worst traders

It is these same gifts,that the GREAT poker players have to a certain degree.

Some have it......MOST DONT!

There are a million college grads,with awesome mathematical minds,that in no way shape, or form are guaranteed to be great traders ...the same as the poker example.

BTW this is no way an insult to DS as he is brilliant enough to use his knowledge ,mind,etc...to write books,coach,partner in 2+2,etc...and make mucho monies$$$ in other ways directly related to the poker industry

I used to see a thousand college grad nerd resumes a month,that were all the same...blah blah blah...I would rather spot a potential candidate in his initial interview from everthing BUT his resume... with ferocity,hunger in his voice/body language,eagerness to LEARN what school didnt teach,and amongst other qualities.

That was the deciding factor for the majority of applicants that succeeded the highest percentage of the time

In this day and age these degree's are standard anyway!

SF

Re: Advanced Degree Paths into Trading
 

Stephen you didn't really answer his question

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what would be some recommended paths to getting into trading?

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Option 1 is probably your best bet (with a shorter horizon).

Option 2 might get you an interview with some IBs which could lead to a spot on at a trading desk, but I'm not sure of the likelihood (at the school I went to though I dont know of that many that were looking into this option).

Option 3 can absolutely lead you to do some back office quant programming, but as you said it will take a very long time.

Option 4 is definitely doable (just need to have the capital to get started and find a trading firm that's recruiting with one of the "use your own $5,000 to start" things.)

I recently went through the whole finance recruiting process while I was getting my MS in Finance and there's no "path" that can lead you into trading via academia other than very quant-related programs (PhDs mainly). However, advanced finance degrees can get you interviews with IBs and that can in turn lead to a trading position if you tell them that's what you're interested in.

Re: Advanced Degree Paths into Trading
 

Sorry Crushin and OP!

I apologize abit as my rant was in part my fault for mis-reading his post,and a bigger part due to a phone call at the approximate same time I was replying to the post......I was having a heated discussion(and unfortunatly using the OP as a example....my bad) about the change in trader physchology from "guts to math only".

It was in NO WAY intended towards any specific person,or esp. the OP

As to the OP's question:

I would tend to agree with option #3,as there are just sooo many grads in the same position,with the same Big Name school credentials,high GPA's ,equal degrees....and the big firms are "conveniently" all on the same page as to starting salary,working 80+ hrs a week,starting at the bottom,with a LONG time horizon,if any, to the lucrative side of trading,etc

Once again...sorry if I offended anyone,but I was just being BRUTALLY honest!

Stephen [img]/images/graemlins/smile.gif[/img]

BTW option #4 is just an ole' DTing "trick" as well,that was used to promise them riches.

"Yeah...Just put up $5000 and we will give you 10x....even higherX buying power within our fund.
After two months ,the majority of these guys were broke,as it just took ONE bad trade with that kind of leverage to be cooked.....obviously after running up huge commission costs

Re: Advanced Degree Paths into Trading
 

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Two of the BEST traders I knew on the floor,didnt graduate HS,and have made a fortune,each buying their respective seats.


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They were probably lucky and if they were in high school now, they'd be going to college.

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Wallstreet is also HS "game" ,not for the weak of heart,that requires balls,feel etc. that is not all "math related",and time will always weed out the best/worst traders

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This depends which products you trade. No amount of balls and feels will allow you to trade exotic interest rate derivatives without at least a decent math background.

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Some have it......MOST DONT!

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I'd say that "it" is mostly intelligence, luck and a few other auxiliary abilities that allow one to utilize that intelligence. Most people way overestimate the importance of factors other than intelligence and motivation in success.

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There are a million college grads,with awesome mathematical minds,that in no way shape, or form are guaranteed to be great traders ...the same as the poker example.


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There are no million college grads with awesome mathematical minds. Maybe there are 5,000 or so. The ability to misapply statistical methods, common among sophomorically educated graduates in quantitative disciplines is not a sign of an awesome mathematical mind even though it may seem that way to those who lack the mathematical sophistication to even understand those methods. Just about any reasonably intelligent person can learn any number of quantitative/numerical methods and become a "quant" - intelligence largely separates those who apply them correctly from those who those who don't.

Re: Advanced Degree Paths into Trading
 

""They were probably lucky and if they were in high school now, they'd be going to college""

Well they didnt then,arent now in college,and what does that matter anyway after their proven LONGTERM success,...oh and BTW your right they were lucky...lol

I just dont understand how a young college grad,is going to defy the gravity of WS,and argue his math degree with someone who has almost 20 years experience

""Just about any reasonably intelligent person can learn any number of quantitative/numerical methods and become a "quant" - intelligence largely separates those who apply them correctly from those who those who don't""

This has NEVER guaranteed a great trader...it helps...but NO guarantee



[b]"""I'd say that "it" is mostly intelligence, luck and a few other auxiliary abilities that allow one to utilize that intelligence. Most people way overestimate the importance of factors other than intelligence and motivation in success."""


OK...so you and the other 5000 applicants begging for the same job,have it all figured out.Thats why the Big Boys...all have the same basic starting package/salary/working 80+ hrs a week for years,hoping/praying that YOU get "lucky" like my HS grad. friends....LOL!

Re: Advanced Degree Paths into Trading
 

thanks for the replies. my conclusion:

-getting trading job straight out of undergrad is best route, since first year on job will be really useful and a learning experience in itself

-PhD unnecessary/too much time unless i was actually interested in it in itself

-would probably only try to get MS if can't get any good offers, in order to boost credentials

Re: Advanced Degree Paths into Trading
 

[ QUOTE ]
""They were probably lucky and if they were in high school now, they'd be going to college""

Well they didnt then,arent now in college,and what does that matter anyway after their proven LONGTERM success,...oh and BTW your right they were lucky...lol


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It matters because times have changed - the fact that one didn't need a certain set of skills or qualifications a long time ago does not mean that you still don't. This basically destroyes your argument that they didn't have X but became successful, so you don't need X either.

As for luck, you don't actually mention what these friends of yours do ("trader" is a very vague term ) and how they became successful (other than that they are are exchange traders). The only correct inference one can make is that they'd been lucky, as most successful people have been. It takes a rare talent to become successful without a good amount of luck.


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I just dont understand how a young college grad,is going to defy the gravity of WS,and argue his math degree with someone who has almost 20 years experience

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Who and what are you talking about? And a lot of people don't learn much or learn all the wrong lessons with years of experience.


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""Just about any reasonably intelligent person can learn any number of quantitative/numerical methods and become a "quant" - intelligence largely separates those who apply them correctly from those who those who don't""

This has NEVER guaranteed a great trader...it helps...but NO guarantee

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Nothing guarantees anything. I will add that our underestimation of the importance of intelligence has to do with an inability to judge intelligence in the first place. Most people have really no idea how smart other people are.


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"""I'd say that "it" is mostly intelligence, luck and a few other auxiliary abilities that allow one to utilize that intelligence. Most people way overestimate the importance of factors other than intelligence and motivation in success."""

OK...so you and the other 5000 applicants begging for the same job,have it all figured out.Thats why the Big Boys...all have the same basic starting package/salary/working 80+ hrs a week for years,hoping/praying that YOU get "lucky" like my HS grad. friends....LOL!


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What job am I begging for?

Re: Advanced Degree Paths into Trading
 

Intern at an investment bank / sales & trading desk at a big WS firm. The rest will fall in line if you keep your eyes peeled.

Re: Advanced Degree Paths into Trading
 

Phone Booth,

In all due respect a good bit of luck,being at the right place at the right time,certain market conditions(any type market,not just stcoks)..is always helpful,and most of time a given,when someone is successful

I attribute my own success in owning/buying my firm ,as being at the right place at the right time in alot of ways,but if I wasnt a successful trader I wouldnt have gotten the chance either..

The actual success,growth,etc, of the most successful businessmen,let alone traders is not directly correlated to ones education alone

I dont think thats a fair statement to say that my two friends who did not graduate HS,started on the floor as clerks,eventually buying their own seats on the NYSE was pure luck...they busted their azz,were exteremely suceesful equity traders and are true examples of success that no education can buy

And for someone spewing his mouth about math/college degrees/quantitative/numerical methods ......just saying the word 'LUCK' seems quite ambiguous?

I am not in anyway downplaying a college education(i have my own)...but getting your B.A...Masters..even their doctorate....doesnt guarantee anything nowadays as they are a dime a dozen in the world of finance.

It does give you a foot in the door IMO....but the direct effect of the time/costs to each individuals success is vastly different as to what their end goals might be

Most dont get that far anyway on WS!

SF [img]/images/graemlins/cool.gif[/img]

Re: Advanced Degree Paths into Trading
 

Using HS as an acronym for both high school and high stakes confused the [censored] out of me. I was like, why couldn't Sklansky beat a high school poker game?

Re: Advanced Degree Paths into Trading
 

I couldn't agree with stephen more. While not terribly familiar with quant trading strategies, I do know a bit about the backgrounds of friends that got recruited at these places. Out of college these were pretty much the kids who were phenomenally smart, lots of people who went to the math olympiad, etc. From what I understand for older people, its frequently people with PhD's in physics, math and compsci.

Re: Advanced Degree Paths into Trading
 

[ QUOTE ]
""They were probably lucky and if they were in high school now, they'd be going to college""

Well they didnt then,arent now in college,and what does that matter anyway after their proven LONGTERM success,...oh and BTW your right they were lucky...lol

I just dont understand how a young college grad,is going to defy the gravity of WS,and argue his math degree with someone who has almost 20 years experience

""Just about any reasonably intelligent person can learn any number of quantitative/numerical methods and become a "quant" - intelligence largely separates those who apply them correctly from those who those who don't""

This has NEVER guaranteed a great trader...it helps...but NO guarantee



[b]"""I'd say that "it" is mostly intelligence, luck and a few other auxiliary abilities that allow one to utilize that intelligence. Most people way overestimate the importance of factors other than intelligence and motivation in success."""


OK...so you and the other 5000 applicants begging for the same job,have it all figured out.Thats why the Big Boys...all have the same basic starting package/salary/working 80+ hrs a week for years,hoping/praying that YOU get "lucky" like my HS grad. friends....LOL!



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I'm having trouble believing you're older than 9.

Re: Advanced Degree Paths into Trading
 

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I am however amazed at the # of posts/replies that just emphasize the numbers/math side of the game when approaching their schooling/degrees to become a trader.

SF

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I believe that because this is DS's page, math is over-emphasized with regard to everything, especially poker.

I enjoy reading this forum, but, from the posts, you'd think that crunching numbers is all it takes to be a great poker player.

Re: Advanced Degree Paths into Trading
 

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[ QUOTE ]

I am however amazed at the # of posts/replies that just emphasize the numbers/math side of the game when approaching their schooling/degrees to become a trader.

SF

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I believe that because this is DS's page, math is over-emphasized with regard to everything, especially poker.

I enjoy reading this forum, but, from the posts, you'd think that crunching numbers is all it takes to be a great poker player.

[/ QUOTE ]
[img]/images/graemlins/cool.gif[/img]

Re: Advanced Degree Paths into Trading
 

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Using HS as an acronym for both high school and high stakes confused the [censored] out of me. I was like, why couldn't Sklansky beat a high school poker game?

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I wont even touch that one,
but the analogy did make me laugh

SF [img]/images/graemlins/smile.gif[/img]

Re: Advanced Degree Paths into Trading
 

Not to hijack, but is there any sort of ranking of MFE programs around? I can' seem to find one ... do they just not exist because the programs are so new?

Re: Advanced Degree Paths into Trading
 

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Not to hijack, but is there any sort of ranking of MFE programs around? I can' seem to find one ... do they just not exist because the programs are so new?

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there's one here:

http://www.global-derivatives.com/in...&Itemid=36

but it's a bit dated.

i'm currently in the mfe program at cornell, so if you have any questions i can try to answer them.

Re: Advanced Degree Paths into Trading
 

stinkypete - PM sent (ignore my first one though).

Re: Advanced Degree Paths into Trading
 

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thanks for the replies. my conclusion:

-getting trading job straight out of undergrad is best route, since first year on job will be really useful and a learning experience in itself

-PhD unnecessary/too much time unless i was actually interested in it in itself

-would probably only try to get MS if can't get any good offers, in order to boost credentials

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This is pretty logical. All four of the options listed can work, but you laid it out nicely. It's hard to argue with the value of getting actually work experience; if it is good enough, you never have to take the time to walk down the other paths.

A few additional thoughts:

1. Getting the right type of experience is very important. Try to get a position with a high quality firm as close to the firing line as possible. It's hard to know what the hot area will be in a couple of years, so maybe it's best to emphasize right firm and right job rather than specific market segment.

2. While in school, get the highest grades possible. if it's too late for that or you just can't do it, it is going to be tougher.

3. I don't know how much the prestige of a school is related to the quality of the education, but it definitely affects the likelihood of landing a good trading job out of college. If you don't attend a school that is a feeder to Wall Street or hedge funds, start figuring out how to get to know people in the industry. The price you pay for not being at a "top" school is that you have to fight harder to get on the interview circuit. If you aren't a senior, get a summer job in the business, it will help you know which end is up when you do interview as a senior.

4. You ask if the senior guys at hedge funds have advanced degrees. Not aware of any survey, but my own experience is that that is mostly true and certainly true in the quant world. Nevertheless, it isn't a requirement.

Re: Advanced Degree Paths into Trading
 

Hi, is anyone into oil trading? How issit different from financial instruments trading?

Re: Advanced Degree Paths into Trading
 

Interesting thread. How hard would it be for someone with an undergrad from outside of the US to get into one of the better financial MS programs in the US?

Re: Advanced Degree Paths into Trading
 

Not too difficult if you would have been good enough to get in if you were from the US. (Berkeley and Stanford both have class profiles up on the net. I think slightly less than half are from outside of America)

Re: Advanced Degree Paths into Trading
 

Ok good, I hope so.

Re: Advanced Degree Paths into Trading
 

i was a bme/ee. they like hard sciences, math, egr out of undergrad. just get yourself in as many interviews as you can and sell yourself. poker can help in trading specific interviews but it is a high variance approach to interviewing as people view poker in different ways.

Re: Advanced Degree Paths into Trading
 

PhD finance from a top school is ideal, if you can get into one. It'll take you ~5yrs, but you'd be superman after that.

Re: Advanced Degree Paths into Trading
 

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PhD finance from a top school is ideal, if you can get into one. It'll take you ~5yrs, but you'd be superman after that.

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no, you won't be

Re: Advanced Degree Paths into Trading
 

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i was a bme/ee. they like hard sciences, math, egr out of undergrad. just get yourself in as many interviews as you can and sell yourself. poker can help in trading specific interviews but it is a high variance approach to interviewing as people view poker in different ways.

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As Jason just said ,and knowing he just started his career on WS with a top-tier firm.....selling yourself, can sometimes go WAAAAAY beyond your degree,particular school,graduate/doctorate,etc, and can be the difference in starting your financial career on the right path

That initial interview/impression is extermely important from my experience

~stephen [img]/images/graemlins/cool.gif[/img]

Re: Advanced Degree Paths into Trading
 

[ QUOTE ]
i was a bme/ee. they like hard sciences, math, egr out of undergrad. just get yourself in as many interviews as you can and sell yourself. poker can help in trading specific interviews but it is a high variance approach to interviewing as people view poker in different ways.

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Sorry I suck, what does bme/ee mean?

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PhD finance from a top school is ideal, if you can get into one. It'll take you ~5yrs, but you'd be superman after that.

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Getting a PhD is certainly something I feel I might wanna do in the future. Not sure though what it takes to get into one of the top schools... I'm gonna contact the education guides at my school and ask how good they think my chances are and what previous students have been able to do. The thing is I'm not sure how a Swedish undergrad is viewed in the US, especially at the top schools. Even if I'm from one of the best (if not THE best) Swedish engineering schools with top grades, I've no idea how much that is worth when applying for a MS or PhD program at a top American school. I'm sure there will be a whole bunch of other top students from all around the world applying for the same positions, and my guess is that they'll have an advantage if they're from the US, or a more well known school. Won't it take at least ~7 years to finish PhD? 3 years for undergrad, 2 for MS, and ~2 for PhD, or perhaps I can finish quicker somehow?

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As Jason just said ,and knowing he just started his career on WS with a top-tier firm.....selling yourself, can sometimes go WAAAAAY beyond your degree,particular school,graduate/doctorate,etc, and can be the difference in starting your financial career on the right path

That initial interview/impression is extermely important from my experience

~stephen [img]/images/graemlins/cool.gif[/img]

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That sounds very reasonable. I heard from someone there was some sort of finance club at my school, and they arranged lectures etc with people from the industry, which sounds like a great opportunity to make some contacts and get some insight into the industry. I'll try to find more info about this as well.

Re: Advanced Degree Paths into Trading
 

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PhD finance from a top school is ideal, if you can get into one. It'll take you ~5yrs, but you'd be superman after that.

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Perhaps if being superman is being a business school professor or something.