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Technology has always been a driver in finance. That was true when Nathan Rothschild (the eponymous founder of Rothschild Bank) used carrier pigeons to relay the news of Napoleon’s defeat at Waterloo to London in 1815, something that was obviously going to move the London markets, and an innovation that, at the time, shortened the transmission of the outcome of the battle from days to hours. Technology as a driver in finance is also true today, perhaps even more so. And what’s really driving...
 
The practice of quantitative finance used to be the prerogative of global trading hubs such as New York or London. When major investment banks, hedge funds, or proprietary trading firms were expanding to Asia, they tended to send senior executives from New York or London to selected Asian cities to head quant teams, and staff the team with local junior hires—traditionally smart graduates fresh from college. The quant teams in Asia would look to deploy mathematical models developed and...
 
The decision to pursue a degree in financial engineering is an important step in advancing your career. Congratulations! Whether you are seeking to switch careers or advance within the financial services industry, the skills you will acquire are vital to mastering the strategic and analytical demands of the industry. Applying to graduate school is a big decision—as well as a significant investment of time and resources—and the emotional and rational aspects can influence candidates’...
 
"Engineering is not merely knowing and being knowledgeable, like a walking encyclopedia; engineering is not merely analysis; engineering is not merely the possession of the capacity to get elegant solutions to nonexistent engineering problems; engineering is practicing the art of the organized forcing of technological change. Engineers operate at the interface between science and society." - Gordon Brown The function of finance is to connect providers of capital with users of capital. This...
 
A financial engineering graduate degree is primarily a way to start or advance, a career in quantitative finance. It is useful in many ways: not only academically, but practically, by learning about career paths and deciding which suits your interests and background best, and by creating opportunities to compete for the right openings at the right time. Based on a long experience fostering careers of both young and mid-career students and alumni, I will briefly share pointers on how to put...
 
Dear prospective students, I recently signed a contract with a top Investment Bank for an Associate C++ Developer position in the Securities Technology Division in New York. Three years ago I had very little programming and math knowledge, and non-relevant work experience. I was just another business admin graduate with ambition to make it in Wall Street one day. Sounds familiar? Here's what happened: I came across the C++ Programming certificate in one of my searches for MFE programs in...
 
Since writing for this blog in January about the HFT/algo job market, I’ve received many inquiries from students asking about the “requirements” for quant jobs on Wall Street. “Do I need a PhD?” is a frequent question. Each time I receive one of these inquiries, I struggle with the answer. My instinct is no. But when I look at who is working in these jobs, I do see a predominance of PhD’s in the top positions. PhD’s in mathematics, physics, operations research, EE, etc. are common in...
 
Questions about job-hunting, your career path, workplace issues, interview and review preparation, salary and benefits negotiation? Ask Ellen Reeves, one of the contributors to QuantNet 2012-2013 International Guide to Programs in Financial Engineering. Career and workplace advisor Ellen Gordon Reeves is the author of Can I Wear My Nose Ring to the Interview? A Crash Course in Finding, Landing, and Keeping Your First Real Job, featured in media including CNN, CBS, EXTRA, Fox, ABC...
 
This article appears in QuantNet 2013-2014 International Guide to Programs in Financial Engineering. When applying to a master’s program, it is not possible to specify the exact requirements necessary to be accepted, because there is flexibility in the process. An application that is weaker in one area might be accepted because of strengths in other areas. For the most part, the standard of the applicants is very high; however, in some cases, it is apparent that a capable applicant would...
 
Preparing for a Career in the Field When preparing for a career in Financial Engineering, it’s helpful to know what you need to know in order to be considered a good candidate for a job, as well as how to be successful in that role once you are hired. First, you should know that the general utilization of an MFE degree tends to be oriented toward quantitative roles on the desk (i.e., working on the trading desk and delivering the models, risk calculators, etc., directly to the traders who...
 
From Amsterdam to Zurich you can attend financial engineering masters programs in all the financial centers in the world, or places off the financial beaten path such as Bethlehem, Coimbra, Potchefstroom or Stillwater. You can be taught by some of the great names in academic quantitative finance—such as Carol Alexander, Marco Avellaneda, Emanuel Derman, Darrell Duffie, John Hull, Robert Jarrow, Mark Rubinstein, Philipp Schönbucher and Steven Shreve (leaving out many just as distinguished)—or...
 
A recent NYT article sheds light on how the trading landscape has been changing on Wall Street, due to technological advances as well as regulatory reforms such as the Dodd-Frank financial legislation. The article makes clear that technology has been and will play a HUGE part in the industry as an increasing volume of trading occurs over automated exchanges as required by laws or other factors. "The increased use of automated platforms means that more programmers are needed, but fewer...
 
After conducting an exhaustive job-search campaign, you finally received an offer –congratulations! There are many factors to consider when examining this new offer. Evaluating a job offer is very subjective, but people often focus on the salary and disregard other key areas. Here is a five-step process that I developed to help my clients fully evaluate new job opportunities and determine if this is the right fit for them. Evaluate the Position: The actual position is the most important...
 
Unlike most fields, modern financial risk management can be traced back to a specific time and place, and a relatively small group of people. Some quants in New York City, between 1987 and 1993, codified knowledge from a variety of fields, thrashed out disagreements and created the basic foundations of risk management which remain valid to this day. Of course, much of the intellectual heavy lifting had been done before 1987, but it was not organized systematically nor known to any one...
 
Two of the best things about writing a book are the people you meet and the things you learn when you send drafts around for comments. My new book, Red-Blooded Risk: The Secret History of Wall Street, was no exception. I expected to get the most controversy over the historical material about how Wall Street quantified in the 1980s, as there were a lot of strong personalities involved and credit for virtually every innovation has multiple claimants. However other than some minor corrections...
 
In his new book, Scott Patterson argues that quantitative risk managers nearly destroyed Wall Street in a series of disasters going back to 1987. But that is far from the whole truth. The quant revolution in academic finance began about 60 years ago, and it came to Wall Street in force about 30 years ago. It has been blamed for every disaster since, which is not entirely unfair. Most of the innovations during this period have been quant-linked, and in many cases were pure quant. That means...
 
Remember in Hamlet when King Claudius discovers Laertes has been buying naked CDS protection on Danish government bonds? Polonius, the royal treasurer, fears it will increase funding costs and bring on a fiscal crisis. The king laughs off the threat with the famous line, “There's such divinity doth hedge a king, that treason can but peep to what it would, acts little of his will.” Few modern CEOs or heads of state have demonstrated the same wisdom and courage. Instead we are likely to hear...
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