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Message: <blockquote data-quote="Author" data-source="post: 92185" data-attributes="member: 12902">It doesn't sound as if we worked for the same desk at all. First, no trader would tolerate the bonus pool being eaten up by someone who didn't work hard and perform, even if it was someone senior on the desk. No one can just sit there and do nothing - there would be mutiny. After all, we're there to make money for ourselves and having overpaid slobs around gets in our way. That's what PnL is for - if you don't do well, everyone knows. Second, the desk I work on is not a prop desk; it seems to me as if you're describing a prop desk. We don't have models that tell us to buy and sell. We have tools that present us with data that can give us an idea of relative value on various different tradable statistics. It helps us with coming up with trade ideas and biasing our spread on a price one way or the other on an illiquid request. We have tools that price exotic options for us. Neither the relative value tools nor the pricers are perfectly tradable. Same as with every other bank.Our quants do very important work. They develop the models we use to come up with prices, see our risks, and mark our books. They develop environments in which it's easy to use these tools and in which we can view data to help us with idea generation. However, there's always a little tension on desks between quants and traders. Quants can sometimes view traders has arrogant and unintelligent; traders can sometimes view quants as too theoretical, impractical, and detached from the real world. The viewpoints come from the job descriptions and responsibilities. Quants on my desk are responsible for building and maintaining the infrastructure the traders are to use. The traders' task is to use the infrastructure along with expert knowledge of the market to generate revenue for the bank. A quant, as in your example, may come up with a very sensible model which points to a certain trade. The trader might just not take the suggestion. At the end of the day, it's not in the quant's job description to make money in the market - that's the trader's role. If the trade goes badly, the trader can whine about this, that, and the other, but it goes into his PnL and he's responsible for it. The quant ultimately won't be held accountable for risk the trader takes on. Furthermore, the feedback the quants get is generally from the traders who use their models. So of course quants will be hammered by traders if they mess up and never the other way around - traders don't get feedback from quants. Traders get hammered by management when they don't perform. It's just the organizational structure. On the other hand, traders can certainly get ahead of themselves as well. It's all too easy to forget that without quants around, traders would be stuck without the models that they so desperately need to have working in order to do their jobs. Without quants, traders would be lost. Quants certainly know how much they're needed as it's tangible. But then they forget that being a good quant doesn't usually imply being a good trader, and so good traders are needed as well to extract money out of the market. Traders focus more on the latter point and quants on the former. On my desk there have been quants who have transitioned into trading and traders who have transitioned into being quants. Most of the time they find they were better suited in their original seats, though there have been one or two exceptions.</blockquote>

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