Hi,I am curious of what maths are needed for a role in quant trading/research. I have seen in many forums that the topics are calculus, linear algebra, probability and statistics. I was more so looking to get the perspective from a quant of what subjects they actually use day to day.
I heard some people say they never use statistics in their role while others may run t-stat or z-score everyday. Some say you need to only know multi variable calculus while I have heard others say you only need to know how to partial derivatives. Just curious as I wanted to get a base idea of what topic areas to focus on.
To clarify, this is mostly for quant trading and research roles at a hedge fund or prop trading firm. For trading; a PnL seat and for research; alpha generating roles
Thanks in advance!
Quant trading and quant research are way different career path, and both of them also differ in terms of role and industry. Obviously their math/programming backgroun also differs significantly.
Quant research: buy side support, buy side alpha research, sell side(FO, MO, BO), etc -> all of them have significant difference
Quant trading: also way different based on how you define them. (ex: HFT algo, Propshops options trader/d1 trader, systematic trader in BB, etc) -> different as well.
You would need to specify more.
Thanks for the response. Sorry, forgot to mention it originally but I edited my previous post. Focusing more on the buy side, more specifically hedge fund and prop desks. I understand a research will be way more math intensive but want to get a grasp of the math differences for a trader and researcher in both.
I definitely want to be in a trading seat but I figured the more math I can attest for, the better my application looks. I also know some roles dependent upon the firm actually has the researcher and trader position in one. Just looking to see what topics in each category I really need to focus on.
1. Quant Hedge fund: Mostly Quant trader = Quant researcher(Obviously I'll exclude the execution trader) THe essential math knowledge you need to have is linear algebra. Need to have a very good understanding of vectors. Obviously need to have knowledge about corr/cov (for SVD). Understanding of time series/cross sectional analysis could be quite universal. Ability to formulate problems as vector/matrix expression is one of the most important trait to even start the research.
Yes there are some specific teams who work on very specific project such as optimization, NLP, ML, etc, but without having a intuitive/solid understanding about linear algebra you'll get lost.
2. Prop trading traders/quants - > i do not have personal experience but have some friends who are there working for top shops (optiver/JSC)
Traders: Just for options MM -> intuitive understanding of probability(maybe combinatorics) is the alpha & omega. Not to mention mental math knowledge.
Quants: Need to price options. So would need to have some good knowledge about PDE, Stats, Advanced probability. But this might be different among other firms since and idk what quants do at HFT prop shops such as Jump/HRT/Tower.
Not in the industry, but my TA who is a PhD, is going to Optiver in the spring, and much of the maths you will need to know as a researcher at a top prop firm are graduate level, looking into topics such as Stochastic calculus, advanced PDE's etc. Imo from not only him but others either in Quant Research or received offers are graduate school level in terms of math or statistics/computer science. Just my anecdotal two cents though! Gl!
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