Why Math Students Haven't Discovered Quant Finance?

A subscriber asked, "why don't math student know about quantitative finance?" Following up the question the discussion of why math majors know about engineering as it uses math and pays well just like quantitative finance.

There are many reasons for this however the number of jobs available in quantitative finance are much smaller than engineering. For this reason alone I don't think many professors even know it is a job to recommend to students. Another reason I think comes from the idea of "finance" which seems to be business. The business people and the STEM (math, engineering, statistics, and computer science) people often don't get along. I think this makes professors and students less likely to explore quant finance even though it is just math applied to finance. I saw this as a grad student as the engineering school fought the business school on how the masters in financial engineering was structured. That conflict resulted in the program being shut down. As a quant (the finance people view us as dumb and ridged math people) I have often been ignored or not treated well.

Another reason is that most people understand what engineering is or have family that are engineers. This results in students wanting to be engineers.

Overall I wish more students were aware of the quantitative finance career paths and the interesting work we do. If you are interested, please reach out to me as I am happy to answer questions.

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[jose-lael]

I knew about quantitative finance, but I just couldn’t see myself doing risk management or financial modeling day in and day out as my life’s work, no matter how much you pay me. It could be that the pool of people who want to be quants are too small so their wages are higher, most roles require graduate degrees which further filters potential people out. A lot of life major life decisions are made emotionally, even if I love math, does the prospect of applying it to something that doesn’t stir my soul sound appealing? Like you mentioned most people good enough to be a quant didn’t study math for the money, but for the love of it, so naturally many will end up in the most theoretical field they can land in.

[singularity]

I did an undergraduate degree in maths from a top UK university. Almost everyone I knew was at least aware of quantitative finance, and many are now getting jobs in it too. I think, however, that the lack of good information about what the jobs actually entail make it difficult for anyone to get into the field. I am currently finishing up a master's in mathematical finance, and I am only now really understanding the various career paths that quants can take.

[aaronliu]

Hello Dimitri, I'm Aaron and from Singapore and am heading into my final year of studies as an Applied Math major in NUS, I just wanted to thank you for all your content, I can say that I've watched like 95% of all your videos. Am extremely interested in the quant finance and risk management in the sell-side, hope to land an entry level role but a Msc is also on the horizon. Just want to say thank you and keep making these interesting videos because I literally watch every new one that gets uploaded!

[prod.kashkari]

I’m even myself, I dread working with MBAs in the world called “data science”. The fact that the rigor in industry is sucked away in favor of the motto of “just get stuff done fast” then we feel like fish out of water because we are used to making things rigorous, and not just plugging stuff into xgboost or something. I hate how data science is now “interdisciplinary” and now I have to compete for jobs with MBAs who don’t even know a lick of stats and still get hired cause they have this degree which (in my opinion) doesn’t really provide them with any skills and is a degree that people just love for some reason. Like why are MBAs being favored over technical people.

[ABKW]

Yeah the organization I run on my campus helps prepare engineering and CS students to learn the skills they need to apply for quant masters programs. It was really interesting to see the changes in the demographics that occurred vs when I first joined until now. Used to be many finance students with long drawn out python tutorials explaining what a for loop is, now it’s moving towards prepping students for stochastic calculus and other fundamentals so they have a little bit of an understanding what they are getting in to before they start these programs. We use your videos pretty often to help students compile lists of schools to apply to, your content really helps 👍🏼

[dataneer]

Omg subscribed immediately. I'm so glad to find someone talking candidly about the issues with the educational pipeline for math/finance/business as a whole

[armitageshanks]

Isn't that a good thing? We wanna keep things niche to keep the competition down. We dont want it to become so mainstream that everyone wants to go into it.

Plus, these kids are adding more value to society by becoming engineers

[Daybyday]

You bring up a lot of interesting points. I studied Econ-Math in undergrad, and I'm in grad school for Theoretical CS. This summer, I'm working as a quant research intern and I see a ton of Math type people; it's all CS, Applied/Pure Math, or Physics. I think it depends on a lot in the city you work in, type of firm you work at etc. I know some teams/banks/places try to make it seem more "academic" to attract the "mathy" people as my recruiter put it lol. But I doubt this is the norm in many places.

[davidchandler]

Thank you for this video. I am dual majoring in mathematics and mechanical engineering and minoring in computer science as an undergrad and then planning on going to grad school for statistics with the intent of getting into quant finance. I originally went into college as a finance major, but it was not until later that I realized I could apply my love for math to finance. Your videos have been instrumental in my college journey and have given me a better idea of what I want to do after school

[ABSTRACTSHNITZEL]

Thanks for answering my quesiton Dimitri. That does explain why Quant Finance is so unheard of among math departments. Hopefully it will be something more ubiquitous in the future for math majors.

[meteoriteeeee]

I am a student at UPenn, here a fairly large amount of people in wharton and the engineering school talk about quant finance. These people aim for the top firms like HRT and JS and a fair amount of them are successful, but I do think the interview process is significantly harder than most people are capable of passing realistically. I personally am studying in CS and aiming for software engineering roles instead, as the hiring bar seems to be a lot lower. Also, I noticed that you are from DFW lol that's dope, I grew up in Plano!

[_Gartne_zum_verschoenerne_]

I might be able to provide some insight into the mathematical undergrad mindset, since i'm currently finishing up my mathematics bachelors and will go on to study quant finance next semester.
For one is mathematics much closer to (other) natural sciences than to social sciences like economics, therefor i'd argue that someone interested in mathematics that much that they want to study it might be much more likely to be also interested in engineering or physics or chemistry (or mathematics) etc than in finance as a career.
On the other hand are students that have the goal of quant finance even before deciding on an undergrad probably much more likely to study finance or economics with a focus on mathematical topics, since it is the much easier way (IMO) to get to the masters program and arguably still about as good of a foundation for the masters as math with little to no economics/finance.
So mathematics students don't want to go into economics and future quant students don't want to go into mathematics.

[mattnapol]

Hi Dimitri,

I just wanted to let you know I love the videos, thanks for the information. As for discoverability, I think Quants are already well known for some reason to "CS kids" (think egotistical nerd stereotype). I go to a good US school (UCLA) and Im a math and econ major with a cs minor, while only about 60% of my peers in the math *undergrad* department know what Quant Finance is, a lot higher proportion of CS majors do for some reason. I only recently fell into wanting to become a (Quant) Trader, but upon inspecting LinkedIn, it seems there are many people who have already set themselves up for a lavish career due to their internships at Valkyrie Trading, Meta, AND Citadel (yes these people are plenty at my school, most of which are Asian-Internationals). For this reason I'm now very hesitant to get into the field due to lackluster experience. Is there any way to leverage my Math skills to stand out in what seems to me like a very competitive industry to recruit for?

[diogoantunes]

As an engineering student that recently heard about these areas, I just want to say thank you for clearing up my hopes that quant finance really is about the math. I saw a job listing that boasted that, but was very critical. I don't want to end up doing trading, researching companies to invest in or something like that.

[jasdeepsinghgrover]

I think one of the major reasons is also that many Math PhDs don't want to go to Quant Finance. Here at Stony Brook we also have many Math majors but very few want to go into Quant. Many of them want to continue research in their niche.

[isaac]

just wanted to reassure u what ur doing is working, also a hs student planning to try to do as much math as i can in college to go into finance, think the main problem among peers i see is ppl underestimating the importance of pure math versus applied math

[lucys_videos]

Currently @ a MFE program who recently got a new director (yea that one). Had the opportunity to sit in on 2/3 potential directors and it was really interesting to hear how they all wanted to increase the diversity of the MFE program, which you touched upon.

Couple of Questions:

1) What has led to the shift away from Americans being admitted into top MFE programs? When talking to my old QF professor, he talked about how our MFE program used to be a lot more American but that obviously isn't the case anymore. He chalked it up to the general distaste for finance following '08 which doesn't really feel rigorous.

2) Could you explain why it's desirable for MFE programs to have more diversity, especially wrt more American students and students from underrepresented populations?

3) If you were to admit these students, wouldn't that lower the rigor of the program? This is based on my personal experience American students in my program are technically weaker in aspects such math/stats/cs background compared to international Chinese/Indian students.

Appreciate all the work you put out and know you have a couple of fans here :)

[samsongao]

Same.

Even though, I can show that I'm extroverted - Fun, Warm, Approachable and Goofy when I'm out but in reality... I just want to sleep, solve problems/strategies and beep boop.

[BlackSwan-sqiw]

Top quant firms do recruit math and cs majors aggressively from top universities like MIT, Harvard, CMU, Princeton etc... Since they pay so well, they are extremely selective. You have to be really good to even have a chance to be interviewed and get an internship.

People I know who got in are those who got medals in international math olympiad. If they are lucky to be employed, they can look forward to a basic starting salary of $300K and close to $500K with bonus included in the very first year. It's an insane amount of money.

[sentralorigin]

i was under the impression we all knew about it, but just weren't interested. firms would always try to poach us out of our PhD programs to just go directly work for them but we wanted to go into academic research, not make money. but then some of us gave in to the attraction of money and "sold out" or had no choice because we didn't get the post-doc position we wanted and just badly needed the money so would sign a X-year contract as a means to an end then immediately depart afterwards to try and pursue what we actually wanted to in the first place