Starting a Quant trading firm

[Nikhiln]

Hi Everyone,

This is my first post. I have been a passive reader for quite some time now.

I would like to thank Andy and other experts for sharing their invaluable experiences. It's time to suck some more wisdom out of all of you...

A quick background about myself:

1. Currently working with a reputed management consulting firm. Hence, good college background, good GPA etc etc. (although I am an electronics undergrad)

2. Love solving mathematical problems (hate Abstract maths though)

3. More than average at C++ (maybe 6/10) - but I like it and can go deep if needed.

4. In love with finance for some time now (~1 year, have had no formal training before). Planning to give FRM in May'13

5. I like to work at my will with no pressure of deadlines et al (like a free bird).

6. Amalgamating all my passions, likes and dislikes, I feel I can be good at Algo Trading and would like to start up my own venture in maybe a few years from now. To gain experience, I can work for 3-4 years (maybe in a startup)

7. I am hence planning to attend a graduate school (to do MS in Stats or MFE) [I have a calling to do my MS in stats, but can do MFE as well provided it serves my long term goal]. I need to be very selective with my courses and need help here.

8. I have friends who are good at Finance and Programming. I do good at maths. So, I can selectively focus on some area as well.

I have a few questions:

A. Considering my limited knowledge in Finance and my long term goal of opening my own venture, will MS in stats help me more or MFE?

B. If you were to name a few courses/ topics I should take at my Grad school which are essential for opening up a new firm, what would they be?

C. If you were to rate the importance of the following topics on a scale of 1 to 10 (1 being not at all important and 10 being highly important), how would you rate them?
c1. Finance
c2. Maths
c3. Programming

D. How easy is it to start your an enterprise?
D1. Are there any hurdles/ licence issues by the govt.?
D2. Is the startup capital high? How much would be sufficient?

Huff... That's it for now. Thanks a lot for your patience.

Regards,
Nikhil.

 

[alain]

This

5. I like to work at my will with no pressure of deadlines et al (like a free bird).

and this

D. How easy is it to start your an enterprise?

are very contradictory. You will have 100 times more pressure when you have your own enterprise plus all your employees and your clients will be totally depending on you. Keep that in mind.

 

[ssinghvi]

C. If you were to rate the importance of the following topics on a scale of 1 to 10 (1 being not at all important and 10 being highly important), how would you rate them?
c1. Finance
c2. Maths
c3. Programming

Hi Nikhil, My answer would be a generic one. All three are equally important. For any strategy identifying trading opportunity in the market would require a lot of understanding about the particular asset class (finance), parameter optimization, regression etc. would call for high skills in statistics/mathematics. And you have to code the strategy up (backtesting as well as trade execution).. and since you want to open your own firm you'd need to know all.. and a lot of it. unless you plan to hire a strategist, coder and statistician

D. How easy is it to start your an enterprise?
D1. Are there any hurdles/ licence issues by the govt.?
D2. Is the startup capital high? How much would be sufficient?

These are mostly client driven business. Asking someone to invest their money in your strategy is not at all easy. Strategy needs to have a good backtest as well as live record. then legal, sales, operations plus you need to have good name in the market. So not at all easy.