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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 employees over all." The trading desks at Credit Suisse are demonstrations of how changes have transformed the type of trading and traders needed for the job. "The traders here are mostly educated in math or physics, often outside the United States...
In this article, one of QuantNet members describes a typical day as a market risk analyst in a big financial institution. The author holds an MFE degree. 6:45 am – Alarm clock goes off. The good side is that it’s a Friday and I have a weekend to rest. So I quickly get up, take a quick shower, have breakfast and pull myself together. Then pick up FT from the door, quickly skim through the headlines and head to the train for the daily commute. 7:30 am – After reading FT, look over the news on Bloomberg on my cell before I get in the tunnel and get ready for the day ahead. 7:50 am – Get to my desk and check email for any requests either from risk managers or my manager for the CRO . Some days can get extremely hectic and need to be on...
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 part of the offer. In this new economy, where jobs tend to have a shorter tenure, each position becomes the stepping-stone to the next position. So if you have a career path in mind, each job positions you for the next step in your career. Is this...
In this article, one of Quantnet’s Wall Street Senior Executives describes a typical day in his life as a Managing Director in Market Risk at a bulge bracket investment bank. 06:05 - Wake up, shower, dress 06:10 - Briefly question career choice, think about sleeping in and applying for job at Wal-Mart 06:11 - Recall the great staff and intellectual stimulation job provides, recommit self to career 06:30 - Drive to train station 06:43 - Get on train to NYC 07:30 - Arrive NYC, cab to office 07:40 - Address staffing issue involving zealous junior employee irking bosses, leave message for HR 07:50 - Login, check email, get 1st double short cappucino @ Starbucks, grab two risk quants on the way down to catch up on SCAP 08:00 - Attend...
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 person. And there has been much progress since 1993, but no shift in fundamental principles. What’s in a name? During the years of development, we discussed what to call the field. We wanted to distinguish it from fields like portfolio management and...
The author of this article works as an associate for an investment bank in NYC trading exotic derivatives. The author holds a master degree. 5:30 am: Alarm goes off. Told myself last night that I'd go to the gym downstairs in my building for a quick workout before work today. Not happening. Back to sleep. I really do go through this process most days. I probably should stop even bothering to set my alarm for this time. 6:00 am: OK now I'm up. Shower, get dressed, get on subway to work. You'd be surprised how few people are out on the street at this time. 6:40 am: I'm at the desk now in lower Manhattan. I log in to my PC, start up all my applications. I have a pricer, risk management system, Reuters, Bloomberg, chats, broker screens...
The author of this article works as a prop trader for a securities firm in an emerging market. With a Bachelor in Engineering, he started out as a financial engineer whose job was to develop VBA applications to back test trading strategies for a senior trader. Three months into the job, the trader left and the author was promoted to run his own trading book. He has been trading over a year since. Here is a day in his life. SHARE YOUR STORY 6.15 - Clock alarm sounds. Immediately press snooze button 6.30 - Hear the alarm again and get up. An extra 15 minutes of sleep has been gained. 7.00 - Leave the house for office downtown 8.00 - Have a breakfast at a small diner next to my office building 8.20 - Arrive at the office 8.30 - Check...
5:45am - Alarm goes off, time to get up and get ready 6:30am - Head to bus stop 6:40am - Bus to train station. 6:55am - Arrive at train station, purchase coffee. 7:15am - Find seat on train 7:30 (ish) - Train heads off to London - usually read a book or the Economist or similar. 8:30ish - Arrive at London Bridge train station 8:35 - Head to tube stop to grab the tube over to Canary Wharf 9ish - Arrive at desk at bank (sometimes with Krispy Kream in hand) 9-noon - Work on software and meetings with stakeholders 12ish - Head down to canteen and grab some lunch - if it's a Friday go for the Pie, mushy eas and chips. 12:15 - Eat at desk whilst working. 12:30 - Work on code, meetings etc. Fridays: 5 - head home. Very good day - 5:30/6 head...
In this article, one of Quantnet members describes a typical day in his former life as an Interest Rates Developer at a Major Investment Bank (MIB), FO and MO spreadsheets support. He is now employed at another MIB. 4:50 AM - I do not want to wake up, can someone please break this evil clock alarm!!! 5:15 AM - I’m on the train and going to job 6:30 AM - Finally I’m here and first thing I check if all publishing systems are up. Looks like couple of indicator on my alarm monitor that I wrote in C# are red so I’m going in and investigate, looks like couple of Reuters’ spreadsheets which publishing data closed overnight and did not reopen, so I help them and we are good here. Time to drinkk some coffee (1st cup) 7:00 AM - First call from...
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 quant models affected all Wall Street events, including disasters. More positively, quants have increased the size, speed and power of finance, which is an enormous net benefit, but it does make disasters more significant for the economy as a whole...
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 less poetic line, “It’s like buying fire insurance on your neighbor’s house!” To suffer the slings and arrows Actually it’s not like buying insurance. The distinction between hedging (including buying covered CDS protection) and insurance is...

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