Being a trading-floor quant is like doing maths in a war zone. OK, so there are no real deaths, but work often gets very intense. Most of the time you’re invisible to the outside world, but you’re actually central to the entire trading operation: one wrong equation and millions of dollars go down the drain and recovery can take weeks.
Trading floors are still male-dominated and there’s a lot of testosterone, plenty of cellphone noise and the occasional swearword. The pace is incredibly quick, there’s no time for small talk, and every trader wants to be the best. With so much money – not to mention pride – on the line, things can easily get dicey for trading-floor quants.
Although I worked closely with a group of quants in Paris, for several years I was the only equities-derivatives quant based among the traders at BNP Paribas in Hong Kong. I remember one time the Paris quant team missed a deadline and one of the Hong Kong traders simply couldn’t accept what had happened. Being on the frontline, I bore the brunt of his anger – I got screamed at and told that my team would all get fired. Of course I knew he didn’t have the power to do this, but because I was equally as frustrated by the delay, those weren’t the kind of words I wanted to hear.
The quant is the one person everyone always goes to as soon as something goes wrong. One day a vanilla trader might ask you to get his Excel spreadsheet working again, even though it’s not really your responsibility, while on another day a trader might report a bug within the pricing library. They at least have someone to turn to for help – for us quants, there’s nobody we can seek similar advice from.
Dealing with traders also means fixing issues relatively quickly, which can be stressful. When the tsunami hit Japan in March 2011 the numerical models we used at BNP went crazy. Our pricer didn’t return any results because the algorithms didn’t converge and all the traders’ systems were rendered useless.
At times like these you feel the pressure. Programming and equating can’t be done in five minutes. It took me a couple of weeks to tweak the models and to implement the changes needed. Luckily the traders had their own issues to deal with, but after the market had stabilised I was expected to have my fix in place.
It wasn’t always that bad. I didn’t have my own quant island, but instead worked as part of the trading team. Perhaps because some of my trader colleagues had studied at the same school or because we reported to the same boss there was never really a sense of “them versus me”.
But as a quant you do need to build internal alliances. Not every trader is going to love what you do. Regular traders want to get the job done and they allocate little time to mathematical algorithms. Exotic traders tend to be a bit more interested in what’s going on behind the scenes. And let’s be honest, it’s fun to share and build on experiences.
One of the things I enjoyed was fixing bugs with an exotics trader colleague after working hours. Of course we had a theoretical framework, but we also often had an empirical approach to finding and eliminate the bug.
So my overall advice to other quants out there is to not take things too personally and to respect what the traders are doing. Try to fit into the ecosystem of the bank, identify your allies (and potential bullies) and most importantly find an outlet to have fun.
Hong Kong-based Laurence Fauchon, a former quant a BNP Paribas, is the CEO and founder of HelperChoice, a website that connects employers with domestic workers in Asia and the Middle East, so that they can find the right match.