How to Become a Quantitative Analyst

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How to Become a Quantitative Analyst: Career Path Guide

If you want to become a quantitative analyst, you first need to determine if this career path is a good fit for you. If the following description sounds like you, then you’re probably well suited for a career as a quantitative analyst:

 

Those who become quantitative analysts tend to be highly skilled in mathematics, data science, or software and application development. They also tend to be individuals that are able to work with little supervision and enjoy doing so. Although making the transition from an academic research environment to a high-pressure work environment may not be an easily transition, those who succeed as quantitative analysts thrive in this environment.

 

Those who become quantitative analysts are interested in having a career that is both lucrative and intellectually stimulating. Since quantitative analyst jobs are highly competitive, those who wish to enter this career must have a refined skill set in the areas of systematic trading, financial research, managing risk, options pricing, or quantitative programming.

 

Those who become quantitative analysts must also have the intellectual ability to master complex and abstract mathematical domains, and a willingness to solve seemingly impossible problems while under considerable pressure. 

 

Many who become quantitative analysts appreciate the fact that those who succeed in this career tend to do so based on merit versus politics or networking. Typically in the world of quantitative analysis, those that demonstrate knowledge, talent, merit and dedication in their work are those that have successful careers.

 

Below we've outlined what you'll need to begin a career as a quantitative analyst. We've also included helpful information for this career, such as job description, job duties, salary expectations, a list of possible employers and much more!

 

 

Education Needed to Become a Quantitative Analyst

In order to get a job as a quantitative analyst, most firms require at least a Master's degree, although preferably a Ph.D., in a subject such as Mathematics, Economics, Finance, Computer Science or Statistics. Master's degrees in Financial Engineering or Computational Finance are also effective if you want to become a quantitative analyst.

 

For becoming a quantitative analysts, an MBA is typically insufficient on its own, although if coupled with a strong mathematical or computational skill set in addition to some solid experience in financial or business analysis, it may be sufficient for getting a job as a quantitative analyst. 

 

Regardless of the educational path you take, it is important to be knowledgeable in the following areas if you want to become a quantitative analyst:

 

Mathematical Concepts:

 

• Calculus (including differential, integral and stochastic)

• Linear algebra and differential equations

• Probability and statistics

 

Financial Concepts:

 

• Portfolio theory

• Equity and interest rate derivatives, including exotics

• Credit-risk products

 

Computer Competency:

 

• C++ (typically used for high-frequency trading applications)

• Matlab, SAS, S-PLUS/R or a similar package (used for offline statistical analysis)

• Monte Carlo techniques

• Java, .NET or VBA, and Excel

 

 

 

What is a Quantitative Analyst?

A quantitative analyst, also know as a “quant”, is an individual that designs and implements complex models that allow financial firms to price and trade securities in order to generate profit and/or reduce risk. Their work involves a blend of mathematics, computer skills and finance, although due to the complexity of modeling pricing and risk for financial securities, the skills most valued in a quantitative analyst are those related to mathematics and computation rather than finance.

 

 

Quantitative Analyst Job Description

Quantitative analysts are responsible for working with specialized software programs in order to calculate risk, pricing, and other values for senior management. To do so, they apply numerical and quantitative statistical techniques using the data from various financial transactions. 

 

 

Quantitative Analyst Job Duties

• Maintain and modify all analytic models in use

• Interpret results of analytics procedures

• Consult financial industry personnel 

• Devise or apply independent models and tools to help verify results of analytical systems

• Confer with other financial engineers and analysts to understand trading strategies, market dynamics and trading system performance

• Research and develop analytical tools to address issues such as portfolio construction and optimization, performance measurement, and pricing models

• Perform statistical coding, such as machine learning or pattern recognition

• Define and recommend model specifications and data collection methods

• Develop core analytical capabilities using advanced statistical and econometric techniques

• Validate and optimize pricing and risk models

 

 

 

Who Hires Quantitative Analysts?

Quantitative analysts are hired by financial firms on a part-time, full-time or contractual basis in order to design and implement complex models that facilitate the pricing and trading of securities.

 

Organizations that hire Quantitative Analysts include:

 

• Investment banks

• Hedge funds

• Commercial banks

• Insurance companies

• Management consulting firms

• Financial software and information providers

 


 

Find Quantitative Analyst Job Opportunities

Quantitative Analyst Jobs - Canada

 

Quantitative Analyst Jobs - United States

 


 

Skills and Traits Needed to Become a Quantitative Analyst

In order to become a successful quantitative analyst, you need to posses a certain set of skills and personality traits. These skills and traits will allow you to not only perform your job duties with competence; they will allow you to thrive in the working environment of a quantitative analyst, and endure the challenges of this career.

 

• Skills and experience in independent research

• Enjoy working in a research-oriented environment

• Education and skills in mathematics, data science or software development

• Advanced object-oriented experience, particularly in C++, Python or Java

• Skills in statistical coding, such as machine learning or pattern recognition

• Able to work with little supervision

• Computationally and mathematically inclined

• Not easily discouraged

• Able to work under considerable pressure

• Patience, dedication and persistence in work activities

• Able to comfortably share opinions with management

• Must have high ethical standards

 

 

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Quantitative Analyst Salary

The salary level of quantitative analysts can vary depending on factors such as their level of experience, their level of education, what firm they work for, and many others. Unfortunately there is no reliable salary information available for the career Quantitative Analyst. However, we can get a good idea of what they earn by looking at the salary levels of closely related careers.

 

Quantitative Analyst Salary Canada: According to Service Canada, the average salary level of workers in the Software Engineers and Designers occupational group is $72,202 per year.

 

Quantitative Analyst Salary United States: According to the United States Bureau of Labor Statistics, the median salary level of workers in the Systems Developers occupational group is $94,180. The lowest 10% of salaries in this group are below $61,040, and the top 10% are above $143,330 per year.

 

Please Note: As quantitative analysts work in the financial sector, their salaries tend to be on the higher end of these figures.

 

 

Careers Similar to Quantitative Analyst

Listed below are careers in our database that are similar in nature to Quantitative Analyst, as they may involve many of the same skills, competencies and responsibilities.

 

Business Analyst

Financial Analyst

Investment Banking Analyst

Mathematician

Software Engineer

 

 

References: How to Become a Quantitative Analyst

Please consult the references below to find more information on the various aspects of a career as a Quantitative Analyst.

 

Alberta Learning and Information Service website: alis.alberta.ca

QuantStart website: www.quantstart.com

United States Bureau of Labor Statistics website: www.bls.gov

 

 

Scholarships for Becoming a Quantitative Analyst

Scholarships in Canada and the United States listed for majors that apply to becoming a Quantitative Analyst can be found on our All Scholarships by Major page.

 

Success Tip: Be sure to apply for any scholarships that you even barely qualify for, as there are millions of dollars of scholarships that go unused every year due to a lack of applicants!

 

 

Becoming a Quantitative Analyst: Applicable Majors

Studying one of the university majors listed below is an excellent starting point to becoming a Quantitative Analyst. Click on the links to find out what else you can do with these majors!

 


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