Who are Quants?

Who are Quants?

If you’ve been poking around the financial sector and run across the term “Quants” then you’re most likely scratching your head at this strange category of people. So who are Quants and what exactly do they do?

“Quant” is financial slang for “Quantitative Analyst.” Quantitative Analysts are a highly-skilled profession in the finance sector as they’re responsible for the design, development, and implementation of mathematical models or algorithms that solve or correct complex financial problems.

Don’t be surprised if you feel like you’re fairly knowledgable about the financial world but haven’t come across this term before as Quantitative Analysts are a relatively new role in finance. The need for this specialized position came about during the late 20th century as computer science and stochastic calculus became more integrated into banking and securities trading.

Quants are particularly in-demand in the trading world as Robo-traders and AI have carved a niche in the stock exchanges, sometimes replacing investment managers altogether. These sophisticated AI platforms are especially popular for younger or novice traders who aren’t interested in paying commissions for wealth management and would prefer their money to be handled by unbiased algorithms. That’s where Quants come in.

Quantitative Analysts are the architects of these algorithms and can generate incredible profits for their employers by programming and implementing apps that source the best trade options for their clients in milliseconds. In an industry where every nanosecond can impact thousands of dollars, Quants stand out as critical assets to money management firms and their clients.

How Much Do Quants Get Paid?

Becoming a Quantitative Analyst means that you’ll earn a comfortable living and may have your choice of employers. Glassdoor calculated the average salary of a Quantitative Analyst to be in the range of $76,000 – $156,000 per year in 2020 with an average salary of $106,751. Those who work directly will Wall Street can expect to earn hundreds of thousands of dollars every year in salary and benefits.

How Can I Become a Quant?

If the role of a Quantitative Analyst appeals to you, let’s discuss the path you’ll need to take to receive a proper education and what sort of roles you can expect to take as a Quant.

Career Paths for Quants

Quantitative Analysts aren’t just relegated to Wall Street, though. Positions for talented Quants are available in a variety of specialties with the most popular including:

Risk Management – Quantitative Analysts are in-demand for risk management agencies across the globe as they help develop risk assessment models for trading, investing, and other verticals.

Sales – Quants help develop sales forecasting algorithms and are often seen in “front office” positions to help identify profitable pricing strategies.

Library/Historical Quantitative Analysis – Many Quants will pick up roles that primarily involve analysis and validation of existing models and updating them to comply with new regulations or technology.

Securities Trading – The most popular niche for Quants to be employed as they’re primarily responsible for developing the algorithms that make securities trading possible in a more automated world.

Employers for Quantitative Analysts normally include investment banks, hedge funds, commercial banks, insurance companies and agencies, and other large financial institutions.

Educational Requirements for a Quantitative Analysis Role

To become a successful Quantitative Analyst you’ll need to have expertise with numbers. Those who barely passed Probability and Statistics are not going to flourish in this role, as you’ll be creating algorithms that lean heavily onto probability models and statistical analyses.

Surprisingly, those with finance or economics are normally not sought after for this role as Quant is more responsible for the coding and engineering of an algorithm than they are on the financial side.

Successful Quants will also be very comfortable behind the computer screen and with programming languages like C++, Java, Python, and MATLAB. Most Quants you’ll meet will have at least a Master’s degree while the most talented Analysts often receive their PhD.s in a field like physics, engineering, or computer science.

If you’re looking for an intensive certification program, we offer a comprehensive Quantitative Methods for Finance Professional Certificate that helps those with the right skills take their career journey to the next level by becoming certified Quantitative Analysts. Click here to learn more.

Related Courses: Quantitative Methods for Finance

This hands-on certificate program develops the fundamental desk-ready skills essential for quantitative roles in finance, including trading, structuring, valuation, risk management, regulation, and financial engineering. Learn all the mathematical techniques, Excel tools, VBA programming skills, and numerical methods that you need to succeed.

About The New York Institute of Finance

 The New York Institute of Finance (NYIF) is a global leader in professional training for financial services and related industries. NYIF courses cover everything from investment banking, asset pricing, insurance and market structure to financial modeling, treasury operations, and accounting. The New York Institute of Finance has a faculty of industry leaders and offers a range of program delivery options, including self-study, online courses, and in-person classes. Founded by the New York Stock Exchange in 1922, NYIF has trained over 250,000 professionals online and in-class, in over 120 countries.

See all of NYIF’s training and qualifications here.