The Biggest LIE in Quant Finance

The biggest lie in quant finance is that you can do everything required at the highest level of a model. This includes data engineering, model development (quant research), implementation (quant dev), and be the end user (often a trader or operations team). This full stack quant does exist however they are never the best at everything and they often work in a very specific niche. Examples of a niche could be, auto loans, equity HFT, commodities, securitization, or etc. The systems, languages, math, stats, financial theory, and business uses are all different.
I would encourage people to focus on one main area (data engineer, quant, quant dev, or business user) and dig as deep as possible. There are a lot of topics inside of each of these and it is easier to jump around business types than to try and cover too many areas with non-overlapping skills.

[@sharpieman2035]

I work at a pretty large HFT firm and I agree with this take. I try to be somewhat full stack but in reality I’m pretty terrible at the research part, and most of the people who are good at the research part aren’t good at being the end user, and generally have trouble with implementation.
Like you say there are people who can technically do all of them, but usually only technically. And other people are almost always way better at at least one aspect than them.

[@alvarojneto]

At a larger firm, it doesn't even make sense for someone to do it all.

[@mishaelroy2026]

genuine question what do you think makes somebody better at being the end user rather than research?

[@DimitriBianco]

@mishaelroy2026 it depends what the end user is doing. In the example of a trader as the end user, they think fast and know when to apply the tools built by the quants. They will understand market dynamics and economics better. Quants think slow and don't make good traders. I actually have a video on that topic.

[@johnworrall9110]

Awesome take. Any good resources that you could point to that define the current landscape of areas, particularly around model development?

[@asishm3703]

I work as a manager at a early stage startup focussed on ML solutions in e-commerce. I find that I dont need to know how to do each of my team members work well, just that I understand how they do it(conceptually and practically) makes my job and theirs easier. Is this the same in quant finance? With managers needing to know broadly what the team is doing being enough?

[@dahama319]

Hey, Dimitri, thank you for always providing so much useful information on QF. I am currently a mathematics major undergrad, devoting to run into quantitative finance, I am choosing courses for next semester, will topology help in the future? Really appreciate your works. Have a good one.

[@Cavz001]

Hello Sir, I studied Agricultural & BioResources Engineering in school but developed interest in algorithmic trading after school and I really want to break into the quant industry. What do you think of taking those prerequisite courses(statistics, math, computer science, financial engineering specialization) on coursera? Will the certificates be recognized?

[@altschauerbergerwingelbeho5085]

Which books can you guys recommend for someone still attending school?

[@emmanuelameyaw9735]

What is a model here? Are you using 'model' (say ARIMA or whatever) interchangeably with strategy?

[@minymaker]

Any thoughts on this new trend of end to end portfolio optimization?

[@DimitriBianco]

Where the employee does the selection analysis, implementing the tools, and executing it?

[@abrafgesvbeac3676]

Great episode! Cheers

[@shagungarg7628]

What channels or resources would you recommend for end users.

[@DimitriBianco]

I don't really know as it depends on what the end user is doing. I don't work in trading so I couldn't provide much advise there. For sell side loans, most of it is learned through the industry as every firm does things a bit differently.

[@meteor8076]

I know exactly what are you talking about - most true professionals have a "context" based on many years of experience which is unknown for newcomers. And this context can't be passed from person to person.

[@alex_8704]

A very interesting video and perspective

[@lawrenceobioma]

Interesting take. I do think you can be generally good at most parts of everything you mentioned but i definitely do agree that specializing at all of those is not feasible at this moment. That might change depending on how much AI is integrated to the work flow. And this is coming from a completely independant quant/algo trader currently leveraging by going into trading for a firm remotely.

[@estebanmurcia8451]

Any thoughts on being an "independent quant"?

[@DimitriBianco]

Yeah:
th-cam.com/video/9g-JrmyGJvU/w-d-xo.htmlsi=U9f6Lm53aUEPHcqu

[@estebanmurcia8451]

​@@DimitriBiancoLmao i forgot I had actually seen your video before, so essentially there is no real benefit to trading on my own? :(

[@DimitriBianco]

@estebanmurcia8451 not really. Working for a firm is lower stress and higher pay. What many do is learn at a firm for some time and then use that knowledge to start their own firm. Running a firm is a different set of challenges though such as dealing with investors and managing employees. Check out Christina Qi for more info on starting a firm.

[@estebanmurcia8451]

​@@DimitriBiancoI watched one of her videos, and to be honest, it seems like way too much stress for me. I was originally seeking a secondary income and hoping to eventually make it my main source, especially since I don't work closely with data (I'm in software development). My initial interest in trading came from day trading gurus and since I wanted to stay away from scams I started looking into quant. However, reality often turns out to be disappointing. 😔 Thanks.

[@FXPhysics]

I left the industry to trade my own capital years ago. While this is true that you cannot excel in every single area, if trading multiple asset classes for a living is your goal, then not only can you become full stack, but you will have to. And you can add the back-office portion on top of it, with trade logging, reconciliation, tax optimization, and accounting. Full stack is often pushed by necessity, not as a career choice.

[@davidc4408]

How much capital would you recommend?

[@FXPhysics]

@@davidc4408 $1mil, give or take depending on your jurisdiction.

[@davidc4408]

Do you invest in real estate

[@alvarpemberton]

This video was really helpful.

[@pandapoet244]

Quant Crypto does all of that for you with A.i.

[@florianwimmer20]

The who?