Careers in Mathematics, Sponsored by Jane Street Capital

[sandor]

Many of you on this site know me as Richard's co-author on the Art of Problem Solving books. That couldn't be farther from the truth--in fact, Richard was my co-author. Either way, we wrote those books because the problem solving skills we honed through study, competition, and the Math Olympiad Program (MOP) were vital in preparing us and others we know for careers in a wide variety of fields.

For example, I work at Jane Street Capital, a financial trading firm in downtown New York City, using my problem solving capabilities to analyze markets and find profitable trading strategies. This requires not only math and computer science, but also game-playing strategy, because I don't work in a vacuum. There are many players in every market, so I have to figure out not just how to value securities, but also how to best adjust my tactics to the motivations and actions of the other players. This combination of quantitative and strategic thinking has allowed Jane Street to grow from a five-person shop six years ago to one hundred and twenty employees today, and we're still as aggressive and intellectually curious as ever.

The abilities I developed pursuing goals like making the MOP have been so useful in my work that now I'm looking for people with similar backgrounds to join me at Jane Street. As a student, I had no idea a career like mine even existed, much less that it would be open to someone like me. Therefore, my company is sponsoring this Careers in Mathematics Forum in the hope of helping brilliant problem solvers learn early in life about the avenues open to them.

We also sponsor the forum, of course, to find our next great trader, researcher, or programmer. We are constantly seeking new people with problem solving prowess and a strategic mindset. If you're an avid card player, or a master of Diplomacy or Settlers of Catan, you're probably one of us. Contact me by email at hr@janestcapital.com, or write c/o Jane Street, One New York Plaza 33rd Floor, New York, NY 10004.

Sandor Lehoczky

[ffdbzathf]

i've lately been thinking about careers concerning mathematics and which college program i should aim for in order to do this. what kind of education do you have to have to be an employee at your place? Is a bachelors in math enough or do you want something more like an MBA or even a PhD?

[MCrawford]

I certainly don't intend to answer for Sandor, but I think the smarter firms on Wall Street are far more interested in what you can do as an employee than what papers you have behind your name. Interviews often consist of problem solving exercises relating directly to the job.

Getting an interview to begin with sometimes has to do with the degrees you've earned, but the Information Age is quickly helping employers find workers who match the skillset they need without pouring through an increasingly large pile of decreasingly meaningful resumes. In fact, that's a big part of the purpose of the new forum.

[sandor]

Mat is basically on target here. It's more who you are and how you think than what you know or what degrees you have. We have successful people from many different backgrounds, but the problem-solving mindset that goes with study in math and/or science is a very appealing thing for a candidate to have.

Sandor

[Fierytycoon]

Hi Sandor,

I am currently a senior in high school trying to decide what university to attend next year (one week left for me to think about it ). Anyways, I have recently become interested in the financial market. I read the career descriptions on your group's website, but am still curious about what exactly traders and quants at your group do. Maybe you could provide a brief description of what a typical week in the life of a quant working in your group would be like. If so, I would really appreciate it.

Also, after doing some research on the net, it seems to me that most financial companies are simply looking for good math and problem-solving skills in candidates who wish to become quants. Currently, one of my college options is going to UPenn and getting a Bioengineering degree as well as a degree at Wharton (finance, perhaps). Note that this plan has no mention of mathematics. Nevertheless, would this plan allow me to go out after college and get a good job as a quant? Maybe scoring well on the Putnam exam would look good on my resume as an indication of good problem-solving skills?

Any insight you (or anyone else here) could provide would be very helpful. Thanks.

[sandor]

A day-in-the-life is really hard, because each person at Jane Street finds their way into a particular niche that suits their own skills. We have people who are relatively pure traders (focus almost exclusively on optimally implementing strategies and outgaming other market participants) and relatively pure quants (focus on quantitative analysis and research), but also people who fall somewhere in between, combining implementation with experimentation and research. Even among those groups, we have traders that stand on a trading floor, traders that work off data feeds upstairs, traders that trade primarily over the phone; traders for whom speed of execution is the key to the game, traders for whom careful thought and risk assessment are paramount. Among quants, too, some focus on scientific-style research, others on improving existing strategies, others on writing infrastructure code.

Another problem with a day-in-the-life approach is that trading fits the Edisonian "1% inspiration, 99% perspiration" model. The specific details of coding, spreadsheet work, analysis, discussion are individually boring unless one understands the underlying spirit. Ideas are very important, but the bullheadedness to follow them through in the face of bad data, incomplete information, low signal-to-noise, etc. is perhaps more so.

Bioengineering + Wharton seems like an excellent course of study to me for trading and many other possible careers. Make sure there's some computer science/coding in there, either as part of your major or electively. Doing well on the Putnam would of course look good, but don't pursue it unless you really are interested, as it's a lot of work and can really distract from other things.

Sandor

[Fierytycoon]

Sandor,

Thanks for your reply. About your comment in regards to the Putnam...

I do indeed plan on studying for the Putnam because I find math competitions very interesting. However, from poking around, I get the impression that the good firms on Wall Street are essentially just hiring random really smart people and training them to be quants themselves. Of course, there are a lot of good students at the top colleges who get high GPAs. Thus, how can one distinguish oneself as a smart person from these masses? You seemed to somewhat lower the importance of doing well on the Putnam (in terms of getting a good job), while I had thought that having a line saying "Top x scorer on the Putnam" would really make one's resume stand out to top Wall Street firms as an indication of someone who is really good at problem-solving.

[sandor]

Richard can attest to this: only fools would hire "random" smart people. There are hordes of smart people out there, but not many people with the spectrum of qualities that make a good trader/quant.

That said, of course a good score on the Putnam would be a plus, possibly a big plus with some firms. For me, there would be lots of other things that would be more important, if the candidate was obviously intelligent and mathematically strong.

Sandor

[rrusczyk]

Your resume is only the first step. No matter how brilliant it is, if you go into the interview and don't perform well on the quantitative and problem-solving type questions which are asked there, you probably will not be hired. If you do very well in your collegiate studies and are at a well-known, good school, you should at least get past this resume filter. At that point, all the Putnam points in the world will be only a small help, if at all.

I also highly recommend doing internships during college if you can. Jane Street, for example, hired a number of college interns this year. This gives you a chance to impress firms that would hire you for full-time jobs after college and lets you know if a job in the financial world is right for you. Admittedly, there aren't many firms hiring summer interns like this, but Jane Street does, and that's a great opportunity.

[Fierytycoon]

I see, so you are saying that in most cases, its really the interview that makes or breaks a person's opportunity to work at a particular firm (you can tell that I'm rather naive about the job application process).

I have one more quick question if you don't mind...

Like I said, I may decide to double major in Bioengineering and in some degree from Wharton. If I decide to go into finance as a trader/quant, do you think that a degree in Finance would really help me? Or would a degree in, say, Entrepreneurship or Management, serve me just as well in the terms of the knowledge that I gain? I am asking because it appears that most Wall Street firms train their traders/quants themselves anyways, so it may be rather pointless for me to major in Finance. Instead, I could major in a field like Entrepreneurship (or something else, like Applied Mathematics or Computer Science) and gain knowledge that I would not gain anyways by going through a training program at a good Wall Street firm. Furthermore, since I do not know at the moment what I would like to do with my life, I want to keep as many doors open as possible. Thus, if having a degree in Finance is not critical to enter the financial world, then I may opt to major in something else do that more job opportunities would be open to be after I complete my four years of college.

Thanks again.

[rrusczyk]

I don't mean to say that the interview is all that matters so you don't have to worry about your skills or college performance - I'm saying that 'make the list on the Putnam' is not as important as 'do well in your interviews'.

As for your major, it depends on what you want to do. If you want an interesting quantitative job in trading, majoring in Finance is not the best way to do it. Major in something technical, learn how to code, and do summer internships if you can. Most of the places that are hiring smart math folks figure they can teach you the finance. Moreover, most of them won't trust college to teach you the finance.

[Fierytycoon]

Hmm...so how competitive is the job market for students who want interesting quantitative jobs in finance? I know that you and Sandor were both successful with your experiences in the financial world, but you were both top-level math competitors in high school. Is it difficult for a good technical student who has very good (but not genius-level) problem-solving skills and a lot of the other qualities of promising traders/quants to get a job at a good Wall Street firm? I don't know how many technical students aim to go into the financial world after graduating from college and how many good job positions are out there, so maybe you could provide a rough sense of how competitive things are out there.

[rrusczyk]

It's definitely competitive, particularly to go to a selective shop where the problem solvers do a lot of the most important work (and receive a lot of the reward), like Jane Street. (This is not true everywhere in finance - there are a lot of finance jobs that are about relationship building and sales.)

However, you don't need to be a MOPper to be an excellent problem solver, and you don't need to be a MOPper to get an excellent job in trading. Sandor and I both worked with a number of very smart people who weren't MOP-like.

I will echo Sandor's comment about coding - learn your way around a computer.

[ffdbzathf]

do traders and/or quants often or even ever have to travel? i know that investment bankers are constantly being sent by plain or train or however to meet with clients. also, if it's appropriate for this forum, whats the approximate beginning salary for a trader or quant, and what sort of bonus and salary increases are there?

[rrusczyk]

[texas137]

[rrusczyk]

I believe housing can be arranged through NY universities (which might also be appealing places to be for social reasons). As for pay, if you don't live extremely extravagantly, you could expect this internship to leave you with some money left over. Most firms are reluctant to discuss pay details outside of a specific offer, but I believe the intern we helped find a job at Jane Street is paid well.

As for the work, you can expect it to be relatively mundane - there's not much a person can contribute in 3 months if she/he has to learn a lot before doing much. While the work may not be as interesting as, say, what the full-time employees are doing, the real value of the internship is exposure to the financial environment. This year Jane Street is even running after-hours classes for the interns, which is probably a far more valuable introduction to the trading & investing world than anything you'll find at any university.

[Spoon]

It says Sponsored by; what exactly are they sponsoring? Seems interesting to me.

[rrusczyk]

What do you mean, value having a series 7 license? It won't be a major factor in getting internships. At best, I would expect it to be a small plus in that it shows exposure and interest. The story of how/why you have a series 7 will be of far more interest.

Jane Street is sponsoring the Careers in Mathematics forum, as they realize that many of their top future employees may be among the members of this site. They sponsor this forum, I believe, in an effort to let those students know that trading in general, and Jane Street in particular, are good options for them.

[Spoon]

Well, I bring up the series 7 question because from what I've seen people asking, all the questions related to trading have been about things other than actual trading knowledge, such as math. A series 7 shows that the person actually knows something (or perhaps a lot) about trading while being good or even awesome at math simply doesn't. (Please note that I did not say math wasn't important).

For instance, my partner, who is the same age as me (19) got his series 7 a few months after turning 18 when he was working for the summer at a Smith Barney down in South Florida. (I also studied with him and know the material just as well as he does, but I wasn't eligible). He has been actively trading since then and plans to continue. If say, someone like that, with actual trading experience, as opposed to math experience, applied for a job, how would this someone be evaluated?