What is a Quant?

According to Wikipedia, a Quant or Quantitative analyst in the financial world is a person who specializes in the application of mathematical and statistical methods – such as numerical or quantitative techniques – to financial and risk management problems [1].

To put it simply, a Quant is at an intersection of three domains, Finance, Mathematics, and computer programming. Quants have been in demand in the world of trading as they have the sound financial knowledge to identify a problem statement such as the risk of an investment, develop a mathematical model to solve it, and then develop a computer algorithm to execute it automatically.

In fact, algorithmic trading has led to a spike in demand for Quants, with major financial firms employing more Quants than Equity traders themselves. No wonder companies are lining up and doling out a quant salary so high.

Depending on your skills and interests, you have a plethora of options in the Quant domain. Let’s go to the part we have all been waiting for.

Quant Salary

Following is the compiled list of Quant salaries posted for a Quantitative analyst Country Average Base Salary US $112,816 India Rs. 1,036,126 UK £63,029 Canada C$76,768 Singapore S$94,817 Hong Kong HK$636,632 Australia AU$105,851 One should note that this is the average base salary computed from leading portals such as Indeed, LinkedIn, Payscale and Glassdoor. Since a majority are starting as freshers and with a joining bonus and profit-sharing which is not included in the base salary, the actual salaries will definitely be higher. It is understandable that the better and relevant the skills sets are that a prospective company hiring you feels would be helpful to them in the long term, the more your chances of being hired. Becoming a quant requires efforts from your end, but the results are much better from a career point of view. Amateur traders CAN become Professional Quants! Here's what Zheng Zuo, EPAT alumni has to say about how his career shaped up post-EPAT. As you can see, the salaries for a typical quant are on the higher end when compared to skilled professionals in their respective regions. Interestingly, a compilation of jobs posted on popular job portals such as Indeed, Glassdoor and LinkedIn are shown in the following chart: You can clearly see the demand for Quantitative Analysts has skyrocketed in the US with UK and India coming second and third respectively. If you are interested in the figures, you can go through the following table:



Country Indeed Glassdoor LinkedIn US 12667 13192 8354 India 1000 1333 706 UK 1416 1181 2460 Canada 590 512 73 Singapore NA 79 77 Hong Kong NA 444 33 Australia 248 403 290 But is there more to the story than meets the eye? What type of roles is on offer once you become a Quant?



Well, here is a list of just some of the job roles that are prevalent in the Algorithmic Trading and Quantitative Trading domain along with estimated salary figures.

If this recent survey of the best jobs in banking is to be believed, Quantitative Trading jobs ranks only second in their survey, which is quite amazing.





There is a reason Quants have become sought after in the world of finance, especially trading. Back in the day, manual traders used to apply technical analysis tools as well as fundamental analysis to gauge whether the stock is worth investing or not. Over time, complex mathematical models were built to assess the profitability of a trade.

In the quest to develop a sound trading strategy which avoided human emotions, these models became increasingly complex and difficult to put into practice. Here is where the role of programmers came in, who developed the algorithms for the models.

Over time, it was realised that we didn’t need three different people to perform the task when one trained professional could easily perform them alone.

With the right skills, a quant analyst is able to do the work of a finance professional, computer programmer and a statistician.

Let’s understand a little more about a Quant’s life in the next section.

The job responsibility of a Quant

This is a job description posted by an HFT trading firm for the role of a quantitative Analyst:

Trading a vast portfolio.

Analysing hundreds of gigabytes of data to ascertain micro behavioural patterns (at the microsecond timeframe) to trade such signals.

At the same time analysing information across time + assets to build macro signals.

Building automated trading signals.

Building engineering solutions to manage the complexity.

Discovering and imitating the logic and thereby automating the process of setting the hundreds of parameters that traders do on a daily basis.

Hold on! While this is a job posting, it does not tell you the true scope of your work. Granted, as a fresher, you will be working in a team and building quant models yourself, as you move up the ladder, you will be able to handle a fund of your own. And guess what they are called.

Quant Funds

At first glance, you might think - What is the big deal about a quant fund? It must be just another one in the plethora of options we have today, like index funds, mutual funds etc. But drill down and you will find that quant funds are slowly but surely getting a foothold in the industry.

If you look at the US market, the two big names are Renaissance Technologies and Two Sigma. While Renaissance technologies have an AUM of $10 billion, Two Sigma is reportedly managing around $50 billion.

It is also reported that 27% of US stock trading is conducted by quant hedge funds. Even existing funds have started offering quant funds in their product offerings. MDT team at Federated uses Quant models to pick stocks. This has allowed them to beat the market benchmark in recent years.

It is not just the US markets where Quants are making a mark. Take the case of a highly regulated market such as China and you will often hear about the Quant Goddess, Li Xiaowei, who has set up her own fund and outperformed the market by a substantial margin.

With the Chinese stock market seeing increasing foreign investments in the year 2019, and news of it being highly unpredictable makes her achievement all the more noteworthy.

A few points which differentiate a quant fund from others are as follows

Reliance on proven Quant models to create a trading strategy

Relatively low expense ratio compared to actively managed funds

Human bias is non-existent

In the era of diversification, quant funds have thus created demand from investors who are seeking a relatively structured fund. This has also spiked up the demand for quants who are already fewer in number. I guess this explains the high figures as seen in the quant salary table previously.

So far, we have talked about salaries and jobs the world over, but we seem to overlook one important advantage of being a quant.

While most of the fund houses would definitely have profit-sharing as a part of the compensation package, there are countless examples of quants who have set up their own algorithmic trading desks.

But how do you go about setting up a trading desk? Well, let’s ask the algorithmic trader themselves.

A candid conversation with an Algorithmic Trader



How do you set up an Algo desk?