The quant trader interview guide | Tina Huang

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1:01who check all your boxes. Listeners of this show will get a $75 sponsor job credit at nnd.com slash podcast. That's nnd.com slash podcast, terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsor Jobs. I know there's a lot of stories about quantum firms pumping out eight figure bonuses and stuff like that, and it definitely does exist. But I'd say at the five of your mark, you can experience trader but not a senior one. So definitely mid six figures. We're talking $500,000, $3 to $700,000 is a very safe bet. So what does a quantitative interview look like? Well, in this video, you guys are in for a treat because I invited back the quantitative in this video here to go into more detail about the interview process. Hi, I'm more than a quantitative and today we're going to go over some of the basic stuff for quantitative interviews. We're going to go over the different rounds, some specifics and advice for each round, and then some of the materials that help me prepare. So a quantitative is any type of trader that uses

2:04basically quantitative analysis, data science, some sort of data driven model to influence their decisions. It doesn't mean that you're an algorithmic trader necessarily or it doesn't mean that you're using a bot to trade. But you all that means is that you're using some sort of model to help you make decisions. And as you can probably tell, that could mean a lot of different things depending on where you go. So qualifters work at a variety of places. Some of them, the big ones you've heard, like at banks where they're going to be more on the research side or at hedge funds where they're going to be making models and employing advanced strategies, advanced institutional strategies. Or at trading firms and trading firms can be the proprietary trading firms which are very similar to hedge funds or they can be market making firms which are using quantitative strategies to make different markets and find arbitrage or alpha or profit if you would say. So the entropy process usually 2 to 4 rounds beginning with an OA and then going to 2 or yeah, usually 1 or 2 online

3:05or you know, assume Skype or through the phone rounds. Followed by a final round where you're going to get many of the questions you saw before the mental math, the logic, the probably the brain teasers. But with some in-person interviews, you know, about the Cable Rills and usually some sort of mock trade. So the first round is like I said, going to be an online assessment. Most of the time in this round you're going to get the same as what you'd see in an engineering place. Very standardized speed-based exam, basically that's testing how quick you can think. And it's basically just trying to eliminate people who they don't want to consider for the in-person round. So if you're going to get a lot of mental math, just as many as you can answer and as your in-period of time, probability and combinatorics. Oh yeah, that's a math question. You might get 2 digit by 2 digit, like 23 times 18. Fast logic, so a fast logic question is probably going to be something with combinatorics or probability. The easiest side would be like given 5 pauses, what are the odds you get? X heads and Y tails.

4:08The second and the third round are going to be in-person versions of what you got in the first round, which means that they're going to ask you things that are more in-depth questions that involve multiple stages. So card questions where the situation changes on each round. Or dice problem is where we add dice or take dice away. And you have to create a EV or expected value. Alternatively, they might give you some more mental math on the spot, just both as a way to, you know, check that you can actually do the mental math and to see how you work with your pressure. So the final round interview in terms of mathematical rigor is probably very, very similar to the other two. That came before it, so the second and the third round. Stump firms will increase the difficulty, some will not. It shouldn't be too different if you were able to pass that in the first couple you should be okay assuming you, you know, knew and didn't just memorize the specific questions. But the two things that stand out of the behavioral and the trading simulation

5:09or the mock trading that people will have you do, the behavioral is like the behavioral at most other firms. It'll, you know, change a little bit when they talk about based off of your background. So if you're a finance major, you have a finance background. They might talk to you a little bit about that. They might ask you some questions that normally you wouldn't get asked if you were, you know, a humanities background or something like that. But the one that focused on really is the mock trading, which is where you and other interviewees will go into a room and make markets basically against each other, which is where you decide what you're willing to buy or sell a specific thing that you're trying to make a market. Let's do an example of the trading simulation. Okay, so like, let's say you're making a market on the people in the room that you're interviewing with. And for some reason, you think the average height is probably like 5 feet or something like that. So what you would do is you would give a market, for example, like 5, 6, 5, 10 or, you know, 5, 5, 5, 10 of some market where you have what they call edge or profit on both sides of your expected value or your fair value.

6:15I think it's 5, 8. The range is like, oh, I think it's between like 5, 7 and 5, 9. Yeah. And then what are watching you? 5, 7, 5, 9. So really you wouldn't want to be trading until you can buy or sell outside that range. So if you come by below 5, 7, or you can sell above 5, 9, and that's a fair trade for you. So I want to buy below 5, 7. Yeah. And I want to, oh, because it's lower, right? So I want 5, 5, 7 and I want to sell above 5, 8 for you. If you think it's in 6 foot and your range, for example, is like 5, 8 until 6, 3, then you should want to buy everything that's under 5, 8. And then you would want to sell everything that's under 6, that's what it wants. Yeah. So often the way you're thinking about it is not that you have this large range of outcomes that you think it's definitely in there, right? Optimally you have an outcome that you think it's very close to. So like having a 1-inch wide range is much better than having a 6-inch wide range. Because the range you can create is smaller. So you, innately, think you have more edge because you believe your information is better.

7:15But... Star Wars, the Mandalorian and Grogu is now streaming on Disney+. What are you waiting for? Hop on. The must-see galactic adventure comes home on Disney+. This is the way. Our only chance is to work together. On the life of this game. And always wear your seatbelt. Star Wars, the Mandalorian and Grogu now streaming on Disney+. Break PG-13. Propel Fitness Water With Gatorade Electrolites, Zero Sugar and Vitamins, Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolites. When you need to build up your team to handle the growing chaos at work, use indeed sponsor jobs. It gives your jobposts the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes.

8:18Listeners of this show will get a $75 sponsor job credit at ND.com slash podcast. That's ND.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for indeed sponsor jobs. I don't have to be. I won't create anything between 5 and 8.6. So the way you win is just supposed to make trades that are informed. I guess I guess something that they could use, something else would be like the amount of people that you would expect in. There's a lot of creating for the Chicago. So the amount of people you'd expect to live in Chicago. And then people will create their firm markets and they will encourage you to trade by giving information that will drive markets one way or the other. So it's just about the way you think. And most importantly, being the first person if you can be to trade. So you're rewarded for taking initiative.

9:18When you're trading at one of these firms, most of the time the firms giving these interviews are going to be testament of marketing style. And in marketing making, you never have 100% of information. So your job is to take educated bets essentially or educated trades and put on positions that you think will be profitable. So if you're too scared to trade, you're telling the interviewies that you essentially don't want to market and make. So you don't want to be in that role. So you really need to be trading. Yeah, so the first one that most people start prepping for is the mental math section. And for me, I just use ZetaMap or ZetaMap, which is an online mental math tool website that you can use. It's the best score you can get in two minutes. And it was really helpful just to get used to that sort of question. A lot of them are going to be online mental math questions. So getting ready for that and getting ready to be typing your answers into a computer is what was really important for me.

10:21And just by the way, Wörthens very, very good at set up Mac. So this top score right now is I believe 74 75 75. So try it out yourself so you can beat it. I think my score last time the highest I've ever gotten I think was like 48. So that's a challenge for you guys. So for top logic and probability, I used Glassdoor as well as the book heard on the street by Timothy Thalpencrack. Honestly, if you've taken a probability or a combinatorics class, you will have covered 95% at least of what you need to know for the interview process. There's two parts to buy. One of them is an advantage and one of them is a pretty big disadvantage. The advantage is that a lot of the questions come from people who interviewed very recently and they're very company specific. So the issue with using the book is that even though it has a white birth of questions, it doesn't tell you which ones for which company. And you do get some company specific questions. One is that specific companies will ask you that other ones will not have all.

11:22And that's what Glassdoor is really useful for because you'll get to see what those interviews are like. And if they have some very special Mac question or special probability or have even seen like logarithm question logarithm estimation questions that they give you, you're going to be prepared for those because you can learn that skill for that interview. The downside of Glassdoor is I would say maybe two in ten, three in ten questions don't have an answer or don't have an answer you can verify without doing the problem yourself. And for some people, if they aren't as confident in their math abilities and don't trust themselves to be able to verify the question, that's a really big downfall because they're not going to have an answer for it. And they're going to have to throw out 20 to 30% of their questions. And you get into the smaller firms, the ones that don't have the big brand names you're going to have less question availability. Those firms tend to have more specialized interviews so it's also tougher to prepare. They're going to ask for different things. But those I wouldn't worry too much about preparing for the, in those cases preparing for the generalized interview, will do you pretty well in most cases.

12:25So to prepare for the final round, if you prepared correctly for the previous ones, you are going to be fine on the math front. I would be fairly sure of that going to the final round. The one thing that makes a difference is in that trading game or in any sort of interaction game that they might come up with you to be really competent. And preparing for that is going to be difficult, more difficult for some people than others. I know there are some clubs, the finance club or the trading club that a lot of colleges will have these mock events for you to practice. But we don't have that resource. I would say try to either practice with the group of people that are interested or at absolutely worse, just prepare the thought to make fair markets on different things and be willing to go out there and try to trade them when you're given the chance in the game. So we went over the different rounds of the interview process, the different resources that I use to prepare for each of those processes and what each of the rounds would look like as well as the atmosphere of each of the rounds when you get there.

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