The author has been in the brokerage industry for three years and a small private equity firm for half a year, which is equivalent to having been in both the seller and the buyer. I have a little understanding of the quantitative industry. I have come into contact with people from all walks of life in the industry (head private equity, middle private equity, small private equity, bank self-operated, securities company self-operated, securities company back-office, Internet finance, currency circle, etc.) Some understanding, a brief introduction to the career development paths, distinctions and possible incomes of some quantitative industries.
The reason why I wrote this article is because I often encounter some juniors, juniors, and sisters, or quantitative enthusiasts asking about quantitative employment, career development paths and other issues. Of course, there are also the most sensitive issues of treatment. After graduating from my doctoral degree, I was also very confused, and I engaged in quantitative finance-related work by various coincidences. The unknowns also made me uneasy. This article does not want to be an article about selling anxiety, and of course I don’t want to be an article about selling successful studies. The author hopes to be as objective as possible, but because of the industry, some situations are only what the author understands from the side. If it is false, welcome to the industry. Guys criticize and correct me, thank you very much.
Below, the author will give a brief introduction to some common problems that I have encountered.
what is quantification
This question is actually a frequently asked question by many undergraduate or graduate students in finance, mathematics, physics and other related fields. Because in daily life, we often hear some legends about our predecessors, such and such a financial genius graduated from the Department of Physics, and a certain industry giant graduated from the Department of Mathematics. They are said to be doing financial-related content, which seems to be related to finance. Quantification matters. But if the teacher is bragging and asks carefully, the teacher may not know the specific situation.
From the perspective of normal investment, investment is divided into subjective and quantitative. The investment of the former is mostly subjective judgment, making a judgment on the macro level, and making a judgment on the meso-level industry, such as looking at social finance and PMI from a macro perspective. There is a simple judgment. In the short and medium term, real estate may not work, and new energy and semiconductors may be the investment hotspots this year. Microscopically, we will screen the stocks of popular industries, and then make an asset allocation; the latter may be more inclined to carry out data analysis. The simplest investment decision may be the price and volume. If the capital is slightly larger, a multi-factor analysis may be performed, or it may be an index increase or neutral, and the capital allocation will be made according to the weight of the index constituent stocks. But from the author’s personal feeling, the so-called subjective quantitative distinction, the boundary is not clear, because in fact, the so-called subjective investment, investment managers may also need to assist decision-making based on various data, so-called quantitative investment, quite a lot of fund managers There are also some subjective judgments to be made. Therefore, the so-called quantitative industry may have more data decision-making than human decision-making. Of course, this is only my family’s opinion, and opinions vary.
In addition, it should be added that the concept of quantitative investment is actually relatively broad, because some institutions that do medium and low frequency strategies only need to use multi-factor stock selection, and then manually place orders for asset allocation. Other low-frequency trading institutions may do more, for example, they need to do programmed trading, that is, the machine automatically performs entrusted trading, pending order cancellation, and the author may focus more on the field of programmed trading later.
Quantitative Investment Classification
The author is not familiar with the primary market, and the discussion here is limited to some of the secondary markets that the author has learned about. Judging from the institutional investment targets that the author has come into contact with, quite a lot of institutional investments have preferences. For example, some institutions prefer to invest in futures. We often hear about CTA strategies, which generally refer to futures investment strategies. These The strategy is generally a timing strategy, that is, selecting a variety of trading points, such as the turtle strategy, the channel strategy (Tang Chi’an channel) is also used in the turtle strategy, and there are various messy strategies including Bollinger rails, psychological lines, etc. These strategies are generally derived based on volume and price. Therefore, compared to these strategies, the threshold is relatively low, but it is “easy to learn but difficult to master”. In CTA, it is very normal to be able to multiply many times a year. After all, there is leverage, but to achieve stable profits for many years, such an institution There must be something special about it. Some CTA strategies also include arbitrage (intertemporal arbitrage, futures arbitrage), hedging, macro strategies, etc. These are the author’s understanding of CTA, and there are actually more contents, including high-frequency market maker strategies, etc. The author is not familiar with these. CTA has some very well-known trading institutions in the world, such as JUMP, tower, etc., which are doing high-frequency trading in China. Interested readers can understand by themselves.
Because of the convenience of programmatic trading (CTP, XTP and other counters can be accessed on their own), the futures market has good liquidity. From the perspective of programmatic trading, more private placements may choose it. However, compared with the stock market, the scale of the futures market is actually still a little smaller. Therefore, it is equivalent to that investment institutions will still invest in the stock market. Programmatic access to the stock market involves compliance and other factors. In fact, the threshold for programmatic trading will be higher than futures. However, because the mass base of stock trading is much higher than that of futures trading, you will see a much richer strategy than CTA in this market. On the one hand, the strategy of CTA can be applied to the stock market. In addition, there will be multi-factor strategies (futures also have multi-factor strategies, but the data dimension is not as good as stocks), and the financial data and quantitative data of stocks are used to make comprehensive judgments. make investment decisions. Moreover, because stock market transactions include retail investors and professional institutions such as public offerings, different trading models will lead to various strategies having their own scope of application. For example, high-frequency strategies can be purely volume and price, and stocks T0 and T+1 have high turnover. Strategy, daily limit strategy; pure long strategy for multi-factor stocks at low and medium frequencies; index enhancement can also be done, on the basis of index tracking, overweight or underweight certain targets; neutral strategy, on the basis of buying a basket of stocks, Buying short positions in the corresponding stock index futures; there are also some very special strategies, such as the first two years of new products are very popular, you can have new strategies of securities lending and so on, to name a few. From what the author has learned, strategies are good or bad, and there will always be corresponding cycles and market conditions.
Stocks and futures may be varieties with relatively low trading thresholds, but in fact, the scope of quantitative trading is far more than these two. There are also options trading, including commodity options, stock options, stock options, and on-exchange options and OTC options. There are also treasury bond futures, and some leading institutions will make urban investment bonds, corporate bonds, etc. Of course, when the institutions are large enough, the domestic financial market may not be able to support these institutions, because there will be institutions to do Hong Kong stocks and US stocks, and the scope of transactions is very wide. Therefore, different directions will require different talents. , is also quantified, and the types of transactions may change slightly, and the communication on both sides will become difficult. In addition, it should be noted that for fixed income (generally refers to trading bonds and other varieties), options and other varieties, from the perspective of industry demand, the threshold will be higher than ordinary CTA and stock investment, because institutions that can trade these varieties are generally It is a relatively large institution. Therefore, unless the school is recruited, it will be difficult to engage in related product transactions in terms of social recruitment. Therefore, if you want to engage in similar industries, students in school should try their best to try relevant internship opportunities during their studies. .
Is the threshold for engaging in the quantitative industry high?
In short, it is still relatively high. This line is about performance. If there is no performance, on the one hand, the cost of trial and error can be avoided. On the other hand, in order to give investors a bright appearance, it is difficult for beginners without the blessing of famous schools. Of course, this is not absolute. Some small and medium-sized private equity companies may not be so attached to famous schools, and some institutions will not pay so much attention to the threshold of social recruitment, but will pay more attention to the actual investment ability of candidates. After all, these institutions Still need people who can make money to keep the profits.
For public fundraising institutions, in fact, if they are not from Qingbei, the author does not recommend going. After all, these institutions have a much higher complex of famous schools than other institutions. As for which schools are available, interested readers can Go to various fund websites to see the fund manager’s graduate school.
The self-operation of securities companies may be mysterious. After all, the author has no chance to enter. I can only understand some situations from the side. Compared with private placement and public offering, I actually think that the self-operation of securities companies may be more cost-effective. Of course, this is also based on If you can enter, on the one hand, the solid business department can go to the market to fight, on the other hand, the cost of trial and error is not as high as that of private equity, and one mistake will give you a permanent impoverishment, the best point , it may also be in terms of income, securities companies can also have a basic salary guarantee for their own business, which is more attractive than others.
In addition to the above, there is actually a type of quantitative-related practitioners, namely quantitative IT practitioners. Compared with strategy research and investment, this industry may not be so glamorous, but from the perspective of cost performance, IT practitioners are not so high except for the income ceiling. , but the income floor is not bad either. Moreover, the entry threshold for quantitative system development is not as high as quantitative research, and some enthusiasts may not have enough education at first. All are very high. Interested readers can go to some job-hunting websites to search for them.
Is the quantified employment income high?
In fact, the variance is very large. The author learned that a certain top private equity fund manager received hundreds of millions of income in a certain year, and his younger brothers took tens of millions. Of course, the profit he created for the company was at least five times its income. rise. At the same time, many private equity firms offer their employees a minimum of a few thousand salaries. In big cities such as Beijing, Shanghai, Guangzhou and Shenzhen, it is very difficult to survive. Although the income of this line of business is very high, according to some samples I have come across, the basic salary offered by normal private equity to employees is mostly 1~2W, and some kind bosses will give some bonus cuts, of course, there will be many different The kind boss did not keep his promise in the end. Therefore, in small private equity, the good is very good, the bad is very bad. In some medium and large private equity, the author has learned that, for example, a private equity close to 10 billion, ordinary factor researchers can have an annual income of close to 30, and a private equity of 100 billion, ordinary quantitative system developers, the basic salary is around 60. There are various types of bonuses such as the project award, the high one has hundreds of W, and the low one has hundreds of W.
In addition, quite a lot of practitioners work in financial systems such as securities companies, banks, and public offerings. Because the companies are different, the variance in this industry is also relatively large from the perspective of the author. Generally, large and medium-sized securities companies are relatively kind, and the wages of middle and backstage personnel may be in The average salary level of employees in the annual report of securities companies, small securities companies, and some employees of self-operated departments, even the basic salary is only 8,000, and the performance is only tens of thousands. I don’t know if it is the norm for small securities companies.
Can it be a lifetime industry?
Among them, from the author’s point of view, it is to see whether this line is scrolled or not. At present, it seems that there are only some monopoly industries in China. In the financial industry, if you say that you are not involved, it is a bit self-deceiving. Of course, different companies have different degrees of coverage. Private equity with the highest degree of marketization, if you want to do well, unless you really have a unique idea to make money, otherwise, you need to keep learning every day, constantly pondering new strategies, and constantly iteratively upgrade old strategies. In the case of trading system development, if the company has high-frequency related business, it needs to continuously optimize the system. If the company has its own investment and research platform, it needs to upgrade the backtesting system, clean and store data, and operate and maintain the system. In a market-oriented industry, others are making progress. If you do not make progress, it will be a setback and will be eliminated by the market. Of course, the author is only introducing a state here. In private equity, for quantitative research and investment, making money is the best measure, because this is responsible for one’s own performance, not performance. Doing system development may have something to do with the boss. Some bosses spend money and like to watch their employees work overtime. Then they can only seek their own blessings. Some private equity is really good, and all aspects of construction are perfect, so they can do the job. life balance.
For public fundraising, the pressure on investment managers may be relatively high. After all, after losing money from Christian Democrats, if you have a little conscience, you will still be able to sleep at night. Oh, this is what I guess. The real public fund manager, I haven’t talked to him yet. People are so familiar.
For securities companies, it is better to develop quantitative systems, but in fact, it has a greater relationship with leaders. In comparison, it is not as good as private equity. Of course, there will be more elements for leaders to perform. After all, performance still needs to be Leadership decision-making, and this one, can be much more than the poor basic salary. The front-office business department of a securities company, who does quantitative investment, may be more psychologically stressed. It is somewhat unreasonable to lose the company’s money and still receive high wages.
In fact, to say that a lifetime is too far away, the author has only worked for a few years, and it is too bragging to tell readers that this industry can be done for a lifetime. It can only be said that if you love it, you really love it. Even if you don’t engage in this direction, you can still do the business yourself. In fact, the threshold is not as high as imagined, and the actual return will be rewarded to yourself in unexpected places.
I remember that it was almost twelve o’clock one night. I also asked a professional question in a quantitative group, and someone sighed, saying, “Hu Bo, why are you so rambunctious?” In fact, for things that you love and things that can improve you, you can’t call it a volume. The author believes that if you spend your life on things that have no value and meaning, that’s a volume, and it’s a volume that wastes your life. Life is too short, it may be more fun to enjoy every minute and second of life than to show your diligence in front of the leader.
The author is a physics major. There is a second law in thermodynamics, that is, the law of entropy increase. Everything develops from order to disorder. The same is true in our life, from falling to the ground to old age, compared to life. This entropy increase process, continuous learning and continuous progress, is actually a process of inverse entropy. In a certain form, it is actually a way of prolonging our life, or even transcending life. I hope to share with readers. Friends share.
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