Paul and Dominics Guide To Quant Careers Version 201

Guide 2.
01
PAUL &
DOMINIC
QUANT
RECRUITMENT
PAUL & DOMINICS GUIDE TO QUANT CAREERS
Version 2.01
[Type text]
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Guide 2.0
Paul & Dominics Guide to Quant Careers
Welcome
Weve written this guide for people looking for their first or second job in Quantitative Finance.
The idea is that by the end of it you will know the things that many people wish theyd known a
few years earlier. P&D is a headhunting firm, so we have a keen interest in helping people do
well when they try for jobs in banks and hedge funds. This is a collection of things weve learned
about the process, the pitfalls and the skills you need and how to present them. However,
quantitative finance is a broad field and almost nothing we can say applies to every situation. This
guide will help you, but were always available online to talk about your individual case, either
through the website www.PaulDominic.com
or directly as Dominic@PaulDominic.com or Paul@PaulDominic.com.
A number of people only think to ask for this book just before their really important interview, so
the first section is a crammers guide to make use of the little time you have.
A shorter version of this Guide is available within Paul Wilmotts book : Frequently Asked
Questions in Quantitative Finance, available from both Amazon.com and the bookshop on
Wilmott.com.
Whats in Guide 2.0 ?
2.0 is a complete rewrite; weve had a lot of feedback from people who already have a quant job,
and so weve expanded the content for more experienced people, and also for interview
technique, negotiating tactics and dealing with headhunters. We cover how to get more money,
and why sometimes money does not matter. The book list is upgraded and we deepen the
coverage on spotting bad jobs, as well as jobhunting in a difficult climate.
2005-2007 Paul & Dominic Ltd
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My Interview is in two days time

Dont bother with the reading list.
Revise Your CV
The single best predictor of interview questions is the set of things you have said you can do on
your CV. If some of this might have been forgotten, then fixing that is a good way of spending a
finite time budget.
Dont try and learn some wholly new field of maths, or a new programming language. Not only
will you fail, but instead of answering sorry dont know, you may find yourself blundering
about with some vague ideas and leaving the impression that you know very little.
If you have any time left once you have
polished your core skills, then you should start
You have been studying for 15-20 years, so you
work on the things that people will assume
arent going to make a quantum leap between
now and your interview. The trick is to avoid
you know based upon the buzzwords on your
screwing up.
CV. Remember that the people who will read
your CV at entry level are usually not experts
in your precise domain. We find that a lot of academic work has the word statistical in its
description, attracting the questions given to a stats whizz. Conversely many employers still
harbour the increasingly vain hope that a CompSci grad knows algorithms.
Brainteasers
About the only thing which has a useful marginal utility in learning from new is the puzzles that
will be thrown at you. Work out the intuition of the Monty Hall problem, understand coin tossing
problems, and spend a leisurely period doing some brainteasers from Wilmott.com.
Some of these are the algorithms we talk of above, and it does not just apply to those with some
CompSci background. Any formal scheme of problem solving is useful.
Go to bed now
An easy way of losing or gaining a few IQ points is sleep, and it is never worth trading rest for
study just before an interview.
Dont read a textbook

Buy a copy of the Economist to read on the way as you may get asked about your take on events
affecting the market, maybe backed with the FT or WSJ. Do not watch Fox News for at least a
week before going for a quant interview, if you must watch it at all.
Phone interviews
Please try and do these on a land line. This makes you easier to understand, which is always good,
especially if English is not your first language.
Dont be late
Plan to arrive early. It reduces your stress leaving more mental energy for the fight that awaits
you. Take your credit cards and some cash.
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WELCOME ...................................................................................................................................................2
MY INTERVIEW IS IN TWO DAYS TIME .............................................................................................3
INTRODUCTION .........................................................................................................................................5
WHY YOU SHOULDNT GET A JOB IN QUANT FINANCE ...............................................................7
HOW TO WRITE A GOOD QUANT CV ................................................................................................10
INTERVIEWS .............................................................................................................................................32
APPEARANCE............................................................................................................................................42
HOW INTERVIEWS GO WRONG ..........................................................................................................49
WHICH PHD SHOULD I DO ....................................................................................................................51
GOOD THINGS TO DO IN A PHD ..................................................................................................................59
BAD THINGS TO DO IN A PHD .....................................................................................................................60
WHY WE HATE MONTE CARLO. .........................................................................................................62
WHAT PEOPLE GET WRONG ...............................................................................................................68
WHO WILL INTERVIEW YOU...............................................................................................................74
HR INTERVIEW ........................................................................................................................................76
THE DIFFERENT TYPES OF MATHEMATICS SEEN IN FINANCE...............................................80
READING LIST ..........................................................................................................................................84
WHAT YOU MUST KNOW ......................................................................................................................88
WHAT YOU MUST HAVE CODED UP ..................................................................................................89
FINITE-DIFFERENCE METHODS ...................................................................................................................90
PROGRAM OF STUDY FOR FINITE-DIFFERENCE METHODS .............................................................................91
MONTE CARLO METHODS ..........................................................................................................................92
SUMMARY OF NUMERICAL METHODS .......................................................................................................95
PROGRAMMING SKILLS .......................................................................................................................96
C++ ...............................................................................................................................................................98
DEALING WITH OFFERS...........................................................................................................................101
SPOTTING BAD JOBS ............................................................................................................................105
BEING FOREIGN.....................................................................................................................................109
BEING FEMALE ......................................................................................................................................112
BEING OLDER .........................................................................................................................................113
DEALING WITH HEADHUNTERS ......................................................................................................116
HOW TO QUIT .........................................................................................................................................121
BEING FIRED ............................................................................................................................................125
USEFUL LINKS ........................................................................................................................................126
CHOOSING WHICH MATHEMATICS TO LEARN NEXT ..............................................................131
TRANSITION FROM IT TO QUANT FINANCE ................................................................................134
WHAT TV GAMESHOWS CAN TELL US ABOUT MATHEMATICAL FINANCE .............................................137
HOW TO COMPARE MULTIPLE JOB OFFERS ...............................................................................138
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Introduction
Quant finance has grown quite enormously over the last few years, and there are now tens of
thousands of people who do it, teach it, study it, write about it and of course headhunt. For many
people the issue is not just about getting a job, but getting the right job, or in some cases getting
out of what had looked like the right job, but isnt.
Although the market is still pretty good, the right job will still be competed for, and this
competition can be quite tight. If the recruitment process at the bank is working well (and no, it
doesnt always) then the people interviewed will tend to be roughly the same quality (however
they choose to define that) and from comparable backgrounds. The people you are competing
with typically have similar qualifications to you and are usually quite smart. The first thing this
should tell you is that you need to stand out in order to win. Being headhunters we speak to a lot
of recruiting managers and we find that the difference between the one who got the job and the
person who came second is often very small
for the employer, but obviously rather more
You must get into the habit of using the advanced
important for you.
maths and finance techniques you have learned to
make better decisions about your career.
But before you see anyone, your CV needs to
get through the various filters, and again the
necessity to stand out is there, and so later we will talk more on CV design.
Even with that filtering, there is a still quite a wide distribution of the people seen by the hiring
managers. A lot of the interview process is trying to extract signals from very noisy data and so
one person may be much better than another but for various reasons, this fact may be missed.
The first result of this is that simplistic objective facts often get more weight than they deserve,
and you must use this to your advantage.
P&D quant Recruitment ship this guide to everyone who has sent us their CV, or who is studying
at an educational institution with which we have an agreement to help people get jobs. If you got
it some other way, but want to get updates, as well as improve your chances of getting a better
job, send your CV to Dominic@PaulDominic.com
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Paul & Dominic Quant Recruitment

P&D has become the best known name for the recruitment of quants by
principles that work in good markets and bad ones.
What we do
Engage with the quant community as peers rather than sales droids.
Take the trouble to understand what a candidate can and can not do
Find out what they really want, which includes money but is not the only
story.
Filter for those will add the most value from an extensive database of
candidates.
Understand the work itself, rather than match buzzwords.
Search everywhere for the best people, representing candidates from every
place you can think of, plus a few others.
Understand each candidate and explain to you why they are of value, and
indicate both strengths and weaknesses.
What we dont do
We will not carpet bomb you with CVs that are of no value.
Place people, then ring them a few months later to get them to leave.
Improve CVs to make them unrealistic. All CVs are in the form we get
them from the candidate themselves.
If you are interested in getting better quants into your organisation with
less hassle, then contact us:
Dominic Connor
Paul Wilmott
Dominic@PaulDominic.com
Paul@PaulDominic.com
www.PaulDominic.Com
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Why you shouldnt get a job in Quant Finance

This may seem a strange way to start this sort of Guide, but you really need to get your
motivations clear in your own head before you try and explain them to managers who might
employ you. The odds are about 50:50 that at entry level you will be asked a question of the form
why do you want to enter this line of work ?. It concerns us that some people manage to get
this simple question wrong, which is quite an impressive trick, though not a good one. It is clear
that some people have simply not thought about what they are doing with their lives, which does
not inspire banks to employ them. Indeed one gets the impression that sometimes people only
find out that they dont actually want to take on this career in the interview, when they stumble
through half baked answers. Lets review the classical reasons for doing quant finance from good
to bad and all the way to scary.
Money
Quant finance pays better than most other jobs
You have no worth as a person at all. You are
worth what you can get, neither more nor less.
and sometimes extremely well. But if,
somehow you have picked up the idea that
banks are charities whose job is to give money to science graduates, this is the time to use a bit of
economics. A classical defect in the sort of economics you will get from the media is the idea of
inherent worth. This is a popular concept, generally in national economies that are on the slide.
You may be smart, you may know a truly impressive set of things, and passed so many exams
that they have merged into a warm fuzzy blur, but in banking you are worth what you can get; not
a penny more not a penny less.
You will get paid (or not) on the basis of how much it is believed you will make the bank richer,
and in particular the part of the bank run by the people interviewing you. Some people are paid to
manage risk so that the bank avoids getting much poorer, but it is a brutal fact of this market that
they earn less than those who help get the money in. We have seen candidates who sail through
the maths and programming, demonstrating that they understand finance on the way, but
somehow leave the interviewer very unsure about what they can actually do for them.
Banks and hedge funds pay more than other types of employer because they expect more from
you. Thats not just at entry level where they seek out smart people, and you will be working
longer hours than in most graduate jobs, and harder. Part of this is self-imposed because banks
and HFs have a bonus culture and are a rough approximation to a meritocracy. People often say
that they like meritocratic rewards and promotions, without always realising that the other side of
that coin is that when so much of your progress is based upon what you deliver, you cant get
away with just thinking clever thoughts, or keep referring back to the one masterpiece you did in
the past. Since there is no fixed upper bound to what you can achieve, you find that the person
pushing you hard is not your boss, but yourself.
A large chunk of quant finance is taking existing standard work and modifying it to fit these local
conditions, but this is neither the most interesting work, nor the best paid. It is also the work that
is most likely to be outsourced or replaced by a really cool Excel macro. Sometimes you may find
that your job is basically to act as nurse to the sick old Excel spreadsheet that is important to the
business.
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Seen in that context, money is a poor motivator when it is some ugly hour of the morning, and
you face a day of brutally hard work, for which no one will show any appreciation, and turns out
to be entirely pointless because someone else screwed up. Maybe the failure turns out to be yours,
but that doesnt really make it better. Since the nature of much of quant finance is trying to get to
grips with current and volatile market conditions, you can expect that a sad % of your work will
be thrown away without ever being used because the situation for which you have worked no
longer applies. This should be one advantage of a scientific education, that you have conducted
experiments with negative results, and not been too worn down by it. Although hiring managers
like to see success, a bit of character is also a good thing, and in this context character means
the mistakes you have learned from. Picking yourself up after a knock is a critical personal trait in
finance, so if you have an example of this, then it is worth mentioning it in your interview.
Glamour
You will be working with large amounts of
money, and often the firm you work for is seen
You need to ask yourself honestly if the work itself
as impressive by people with more mundane
attracts you. Money and all the other nice things
jobs. It is also the case that in investment
of banking do not get you out of bed at 5:00 AM
for long.
banking, you will probably get an imposing
job title much earlier than in any career, since
its very rare in most other global companies to get director anywhere in your job title a few
years after leaving education. In some exceptional circumstances that happens straight away. If
you are really lucky and work very hard, you may just get issued with a business card by a major
investment bank with Director of Global Power on it, which is pretty damned cool. There are
actually several such gentlemen, and they work in energy derivatives, a market that is currently
doing rather well.
It is perfectly fine to offer the view that you like working in an environment where your work
actually matters, or that you have been aware of the bank for some time. But be prepared to
answer a follow up question of what, precisely you heard. A common theme in this guide is that
anything you say verbally or on your CV may itself be the subject of a question.
Our all time favourite question on this topic was asked of one candidate being interviewed for her
first job in the City of London. She was asked by the very junior bod interviewing her why she
was interested in this rather self-important firm. The candidate offered the view that the work
would be interesting, and possibly of some importance to the clients of the firm. The bod clearly
did not like the answer, and interrupted her part way through, and said no, youre wrong, you
will be near important people doing important things. The candidate was somewhat less than
impressed, and at that point she came to know that she did not ever want to work for this firm,
since her idea was to be one of the important people doing important things one day, not merely
to use the same lift to get to the office. We like this anecdote so much that it has its own section in
the sequel to this guide, How to interview people, or in this particular case How not to
interview people.
Glamour does not survive repeated viewings, your job is your job.
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The grass is greener
A surprisingly large % of entry level quants are heading in this direction because they are
unhappy with where they are. Academia can be frustrating and badly paid, but this can apply to
almost any type of job. Wanting something better is of course a perfectly good reason to leave
where you are, but it is not sufficient for choosing banking. It is a fine reason for looking around,
so think through why you picked this direction, and be prepared to answer questions on it. This is
an opportunity to say things about what you are good at and what you enjoy working on. Put like
that it sounds small, but can be a critical part of showing them that you would make a good part
of the team, as well as making sure they havent missed some of your finer points.
Problem solving
Of the standard answers saying that you like solving problems is one of the least bad, but we are
not sure that it makes it all the way to good. Most people with a scientific or engineering angle
enjoy solving problems, so a career where they
pay you to do this seems ideal. It may be, but
Get into the habit of thinking about your career
the problem solving is only a small proportion
using the skills you learn in finance.
of the work, so you need to ensure that you
can face the hard and dull work as well. Also if you push this position, you are inviting them to
come at you with their hardest brainteasers, which is good if you get past them.
Failure modes
It is of course also true that some people that get hired who are really not as good as they appear
at first, or that great people miss jobs for which they are well suited. There is profound sampling
error because an interview is a relatively small set of samples taken over a short period and we
know from experience that even the best people do experience off-days. Often this is a
preventable situation so later in the Guide we give some tips on how to reduce the chances of that
happening to you.
For almost all jobs, there is competition varying from three or four to a dozen, and so it follows
that you are unlikely to get any given job. Since your chosen career path involves a lot of
probability, your mathematical intuition should therefore not let the subset of your peers who get
jobs on their first try lead you to believe your career is doomed from the start. Early versions of
the Guide didnt contain this reassurance, but weve encountered a surprising number of people
who are otherwise smart, but dont think to apply any of the many maths or finance techniques
theyve learned to their career decisions. A significant part of the online career counselling we do
is using these ideas from finance and maths to make decisions and plot better schemes for
improving your position.
Although we speak as if being interviewed were a purely stochastic process, you should be
learning, and a big reason we have put the effort into writing this guide is to gather together our
experiences so that this curve is as steep (and short) as possible. There is a lot more data available
on why people dont get jobs than why they do. This is why we talk of failure modes in several
sections, not because we are morbid pessimists (usually), but because we observe that in todays
market, if you are competent, you will get a job, the variable is which one. A good mental
discipline to follow is that a failed interview has bought you time to learn more for the next try. It
is also the case that banks can take a long time to get back to you, or require a series of interviews
over a few weeks, so do not waste this time.
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How to write a good Quant CV

Your CV is not merely some passive list of how you have spent the last 20 years. Its job is to tell
a recruiter why he should interview you and it also helps to set the agenda for the questions you
will be asked when they meet you. Thus it is important to choose what you disclose as a balance
between what you think they want and the areas in which you are confident answering questions.
Start with a big list

Write down everything youve done in some detail, and everything you think you can do. Unless
you have a perfect memory, the first pass will miss many items, so you should revisit it a few
times over the course of a couple of weeks. If you are studying QF, then it is worth sharing ideas
about what to put on your list with your classmates. Making it is a valuable exercise, even though
most of it wont make it to your CV. Typically you will be trying to get as much of this into two
pages as possible, which brings us to a highly
Make sure that every single thing you include on
important discipline in CV design that each
your CV earns the space it occupies. If it does not,
item you include must contribute to the
then delete and replace it with something useful.
message, making it as important choosing
what not to include as to what you choose to
say.
At P&D we like to see these lists, especially at entry level, since before you have worked in
finance you cannot be confident as to what is useful, and we can offer suggestions. It is also the
case that the most useful skills vary with particular jobs, so you need to think what you have to
offer to each one, and so will end up with multiple CVs
The list is also useful when you write a covering letter. Assuming you see some sort of job
specification, then it is worth explicitly taking each point in turn, and saying why you believe you
meet the filter. This is good for both direct and headhunted applications, since it makes life easier
for those people involved later in the process, which is always a good idea.
A particularly useful outcome of this approach is if you are one of the majority of entry level
quants who have made some changes of direction in order to end up here, and so have studied
subjects that are not immediately useful. If your headline subject does not seem relevant, we may
have seen that including useful topics within it can make a dramatic difference to your chances of
getting an interview, by making it easier for recruiters to work out that you are useful.
Writing style
As we say later in the Being Foreign section, good CVs use a version of English that is not
taught in schools, or that you may read in academic or technical books. Indeed
it is often what you have been taught in school not to do. Part of this is driven
If you do not feel
by the need to keep everything in two or three pages. One example is to use
short lists, rather than trying to pack in the conjunctions (and, as well, plus)
entirely confident that
which use up space for no payload. Payload is in fact the term you should
you cannot answer
consider when building your CV. If something does not convey useful reasons
questions
about
to hire you, then it should be removed to allow you to put more important text
into the document.
something then you
should not include it in

your CV
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Choices
It is important to show yourself as someone who has done things using clear and direct language
rather than give the impression you are blurring things. Read each phrase, and ask yourself if it
pushes you forward. The passive voice is often preferred in academic writing because it is
impersonal and dispassionate, which is exactly why it is not ideal for CVs.
Choose:
I cured cancer at Kindergarten.
Not:
Cancer was cured at my Kindergarten.
A hiring manager is interested in what you have done, and what you can do, not random bits of
group history. There are two ways that the hiring manager can read this, and both are bad for you.
The first reading is that you didnt do anything at all, but an impressive thing happened near you.
The second is that you are trying to get credit for something you didnt do, or had a small part in.
There is even a third interpretation that you simply cant express yourself well.
Choose:
I brought about world peace.
Not:
We ran out of people to kill.
This is of course spin. Try to use language that shows what you did was a success, or at the very
least that you completed it.
Complete is what some call a power verb, though of course no two sources agree on which
verbs have the right power. Good verbs to use give the reader the understanding that you,
personally did something.
Strong: delivered, finished, built
Weak: Tried
Pathetic: a sort of, a simple, like a real
Choose:
I built a death ray to defend the Earth
Not:
Using a NN-221, we tried a simple method for the reduction in bioviability of a certain range of
a sort of cyanobacteria in compliance with an overall mandate of xenophobia, under GTYQ.
You are addressing a highly technical audience, but they dont know what GTYQ might be, and
as connoisseurs of CVs we sometimes wonder if (like in this case) the acronyms are just made up.
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Choose:
I wrote a best selling novel about cheese
Not:
This cheese loving, best selling author will be an asset to any team.
Do not talk about yourself in the third person, you may have been taught that talking about
yourself that way is a good way of selling yourself. We sell people and we are telling you that it is
not; it can even sound as if you are suffering from slight mental instability. As a point of interest,
the boasting section of CVs is by far the most likely place to find tragically bad errors in
grammar and even spelling, which is pretty bad in these days of spell checkers.
CV design principles
To sell you effectively, a CV should be answering questions for the potential employer and
attracting their interest. The first question when writing CV is who is going to read this?,
followed up by what do I want them to know at the end?, and supported by how do I show this
to be true?.
Who is going to read my CV?

The cute answer is no-one. CVs are rarely read word by word like a novel, but skimmed by
someone looking for the highlights. It is quite possible that you may turn up at the interview, and
have to wait a few minutes whilst the managers read your CV for the first time. You may do
yourself a favour by bringing a copy with you, since it may not actually reach the person
interviewing you, or have been improved by a headhunter. The most important people to read
your CV have a deep understanding of this area, but it is worth remembering that many
headhunters have zero or negative understanding, an issue we expand in The Klingon CV.
The obvious audience is the hiring manager, and of course critical. Most managers of quants are
themselves from a highly numerate scientific background. We observe that an artefact of the
inflation in qualifications is that the average entry level quant has about two years more education
than the person interviewing them. Many senior quants started in finance when an undergraduate
degree was ample. Conversely, quant finance is very unusual in how early in your career you will
get to interview potential new hires. If you were working in the retail operation of a bank that
would be anywhere from two to five years, investment banks will often send you off to look at
new people within months, and in one occasion a candidate of ours was asked to look at other
candidates before they were hired themselves.
However, your CV will be read by headhunters as well as various people in HR and other groups,
who will have only the most schematic view of this line of work. This means you should focus on
clarity, and make sure your covering letter helps them route it the right way.
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What do I want them to know?
Try to get any information on the job you are applying for and make sure that your CV supports
the idea that you are a reasonable choice for it. A useful tip is to remember that this person knows
nothing about you and isnt going to spend very long trying to find out. Short is good, and write
it so that they dont have to think too hard to find out how good you are.
Make sure they can work out that you are suitable for the job, and this is not just some random
speculative shot at getting hired.
You want them to know you are interested in this job, so any specifics you can include, the better.
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How do I show this to be true?
Although this is the 3rd most important criterion, it is the one that requires the most attention. A
surprisingly large number of CVs we read say things like exceptional knowledge of derivatives
pricing, expert C++, superb mathematician and other phrases that are supposed to make us
think that you are smart, or in some way useful.
This goes wrong if you make these bold claims and then completely fail to provide any reason in
your experience or education that you have even seen the things you claim to be a world leader in.
Each time you say I can do X, make sure that there is at least one clear reason in your CV why
we should believe you, and the level you got to with it. That can be done well by examples, or if
you have space, adapting your claim to expertise to say something like expertise in dealing with
noisy data sets gained by extracting a signal from our experimentation upon cows.
For the best jobs, a manager would prefer
someone who has worked on real data on cows
to heavily cleaned up series that were selected
to support a theory in finance.
Almost no one will ever read your CV.

It will be skimmed by many people, so make sure
its easy to pick out your good points.
This is actually one signal we have seen for

working out which jobs are better than others, because the closer you are to the money, the lower
the quality of the data. Real time market data is terribly messy, but in many cases if you wait for
it to be cleaned up by a vendor then the chance of making money from it is lost. Thus model
validation and risk often use clean historical series, whilst the people actually trying to make
money must deal with data points so horrible they read like accounts produced by Arthur
Anderson.
As there may be a lot more applicants than jobs, the early stages are optimised to filter out those
who stand no chance of getting in. Thus you must take considerable care to make sure you dont
fail at an early stage because of trivial errors. It is hard to tell from a two- or three-page CV
whether you have the right stuff to be an ace quant, but little defects in spelling, grammar, or even
layout can do more harm than you might think.
Although at P&D weve actually done this stuff, it is often the case that CVs are filtered by
people with wildly variable skills in finance with little time to spend analyzing every application.
Often they resort to looking for keywords. Thus you should not rely upon them working out that
if you have done subject X, you must have skills Y and Z. If you believe those skills are critical
for this job, then make sure this can easily be spotted.
One result of the relatively light attention given to CVs is that they may not spot things that are
implied from your experience. Its pretty obvious that if you have done swaps that you will have
fixed income knowledge, and anyone interviewing you, will know that. But the people doing the
filtering may not.
Given that many HHs and others who look at your CV have absolutely no quant skills of any
kind, they do pick up on the feel of a CV, which includes quality of English. This is particularly
important if your CV gives them grounds for thinking that English is not your first language. The
legal issues are such that no one is likely to ask, youre foreign, can you speak English
properly?, which unfortunately means that they may silently and unfairly judge you.
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Read the job specification carefully and if they specifically ask for a skill or experience, then
include whatever you can to illustrate your strengths. If you believe a particular skill is critical
then you should mention it in your covering letter as well (or if you believe the headhunter is
particularly dim). We could name names on the dim list, but that would be cruel.
Make sure you can be contacted

You absolutely must make sure your contact details are reliable and that you regularly monitor
the relevant email account(s) and telephones. It is sad when someones CV shows great promise,
but they dont respond in time to be interviewed. You have no idea how frustrating it is for us, but
its far worse for you. This does happen. If you are at university, be aware that your current email
address may stop working soon after you complete your course, in some cases the very next day.
GMail is to be preferred over Yahoo or AOL for personal email addresses. The Private Message
system on www.Wilmott.com also gets to us
quickly. Dominic has the handle DCFC, and
Get your CV checked by someone else who is a
Paul is of course Paul.
native speaker of English. Encourage them to spot
silly mistakes in dates or failure to make sense.
Be aware that the site privacy policy means
that recruitment is separated from user
registration, so we only know who you are if you make that clear in your message.
Get your CV checked

Have your CV and covering letter proof read by a native English speaker, not just someone who
has been taught English. This is important because many people really do judge your ability by
how you express yourself. The first part of your application process is that someone will be trying
to read your CV and if it looks poor then that hurts you. Quant Finance is an international sport,
with speakers of every language so the ability to communicate difficult ideas is important and if
you cant get the name of your university correct, it makes the interviewer wonder if you can
explain your views on jump diffusion or copulas. Yes, people do get their university name wrong,
which is very nearly impressive in a scary sort of way. The same applies to subjects studied. The
important thing is to take the view that someone who has found something wrong with your CV
has done you a big favour, and you should thank them and encourage this reviewer to find more.
If you are doing a

Masters, set up a group
to look at each others
CV and find issues. It
will not be a completely
comfortable experience,
but it will be a
profitable one.
At P&D we do read all CVs and where we spot a tragically

bad error, then we ask the candidate to re-write that part.
However we do not ever fix it ourselves, as we want to
present you, in as honest a way as possible. It is very easy for
someone to make an error whilst fixing your CV, and we
dont want to add noise to the signal, especially in a domain
where there are a lot of specialist acronyms (PDE, CDO,
ABS, MCMC, FDM, RTFM, DCFC, PDQ, etc.) which are
pathetically easy to get mixed up if you are not directly
involved. So we believe that the only person who can
improve your CV properly is you. If you genuinely cant
when given direction, then this line of work is not for you.
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CV services
So far, weve not been impressed by what we have seen in consultancies who offer to help you
write your CV. It is unlikely that they have any knowledge of your specialist area, and they act
more as a barrier to you showing why you are unique. You are unique, right ?
One piece of feedback weve had from employers, is that the job some University careers services
do with CVs is too good. Most of them help you write a CV that conforms to a good general
standard, and that is the problem: They are very similar to each other, and you need to highlight
the reason to hire you.
Weird science
Having spent years mastering a subject, it will be obvious to you that it is relevant to quant
finance. It may not be obvious to anyone else. Some subjects have names that make them sound
as if they have nothing to do with finance.
This can hurt quite a lot. An early success for
Make sure that it is easy for a casual but busy
reader to work out how each part of your CV
our approach was as an able candidate who
makes you suitable for the job.
had fine qualifications, but few interviews, and
none of them for a good job. Hed done a
Pure maths PhD, and with a few select changes (like deleting Pure) he had a decent position
within the month. It is of course rarely that simple, but you should have enough material to
demonstrate a link. If all else fails list the finance books you have read.
Technical issues
Some of the CVs we get at P&D require significant technical resources to read, such that it is
unlikely that managers at hiring firms can open the files in any useful way. Sometimes the issue is
that the characters embedded to support non-Latin character sets cannot be rendered on a Western
PC running Windows. This can result in strange squares ruining the look of the document, or a
flat refusal to open the file at all. Be very clear on this; whatever software you use to write your
CV, it will be read by Microsoft Word, or Adobe Acrobat, and nothing else. This is of course
pathetically easy to deal with; simply mail your CV to someone running different s/w.
At P&D we can cope with RTF and the mutant XML formats used by the latest versions of
Microsoft office, and as you may have spotted, this guide started life in a beta version of Word
12. However be aware that this is far from always true in the industry, so please stick to PDF or
MS Word format. We still get occasional CVs in plain old text format, which although simple to
deal with usually looks pretty amateur.
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Bad words
Recently we have spotted a pattern, that some entry level candidates with good backgrounds are
failing to get interviews, or any interest at all from banks. We do not claim to have a
comprehensive model of this yet, but we do see some correlations. This centres around Bio and
Pure. Biology is the science that usually offers the least good background to aspiring quants,
but there is substantial research funding for medical and biological applications of maths and
physics. Thus you may have some parts of your academic life where you have done biophysics,
or explored some mathematical aspects of the way our bodies work (or more commonly how they
fail to work). We believe that the simplistic electronic and human filters used to screen CVs for
online applications, are set up to reject you in the same way as someone whose research has been
cutting up animals or working with test tubes.
Much the same effect seems to occur with pure mathematics, even when the candidate has done
this to an exceptional level, and capped it with good education specifically in quant finance.
Whereas it is obviously true that number theory, computability, topology et al have yet to find
much use in banking, the prejudice against them seems to happen as an automatic rejection, rather
than a reasoned evaluation of their abilities.
Thus, whenever you can it is better to refer to biophysics as physics, pure mathematics as
mathematics and so on. We wish to make it clear that you should never say anything untrue on
your CV; not only is it unethical, the odds of getting away with it are not good enough. The sort
of person who interviews quants knows which sorts of mathematics they will find useful, or at
least prove that you are smart, so you are not fooling them. They may still of course turn you
down, but at least that will be a more reasoned refusal than a keyword robot can manage, so your
goal is to get past the dim gatekeeper so that they can make this decision, and you simply dont
want to confuse them.
If you have a straight maths or economics background, it is worth making some reference to the
physics you must have studied at some point in your life, since we also believe that these
buzzwordbots seem to like it.
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Teenage qualifications
Lose them now

Some educational systems, in particular the British, or those derived from it, give all sorts of
certificates at age 16 and 18. When people write their first CV, these are a large % of everything
they have done with their lives, and know that their academic history is pretty much all they have
to sell themselves with. You may even have been told by a careers tutor that they are important.
This is true for some firms, particularly consultancies and the big accountancy outfits who for no
obvious reason care a lot about what you did at 17. But investment banks dont really care that
much about what you studied before university. They may use the quality of the university as a
proxy for your value, but no one in banking has any interest in where you went to high school.
This matters because it takes up space that you should be using for something far more valuable,
like which subjects you did at university. We see quite a number of CVs where equal space is
given to achieving competency in history or woodwork at age 16 as to fluid dynamics at
university. A depressing % of the CVs we see
have lots of this junk and simply say they did
Most things you did as a teenager do not earn
Physics at a given university, with no detail
their space on your CV, except where they offer
at all. The only time your undergraduate
you
the chance to show that your English skills
degree should be compressed is when the
are better than your peers.
things you have done later are worth more
space, or if something went terribly wrong,
and youd like them to focus upon later or earlier parts of your life which look better. The
converse is sometimes true, that employer assume someone who gives little space to their
undergraduate degree has something to hide.
Except
Since finance is such an international game, it may be quite hard to tell at a casual glance where
your home country might be, and occasionally it cannot be determined at all, which may be
good or bad.
You can get hit by uncertainty on where you are legally allowed to work, and whether your
language skills are good enough to work in your target location. Thus a short entry on early
education can be useful to indicate that you do speak English well, and/or that visas will not be an
issue.
An important thing to remember about international issues is that a lot of assumptions are made
directly from the CV without asking you.
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The Klingon CV
Sadly, it is usually the case that most head hunters have absolutely no idea what most of your CV
means, and from their perspective it may as well be written in colloquial Klingon. Between you
and the hiring managers it will pass through the hands of headhunters, human resources,
secretaries and if youre really lucky, an intern who has some vague idea that Mean Reversion
is not a film starring Clint Eastwood. Thus they will judge your ability in mathematical finance
based upon buzzword matching and your adequacy at English. Thats unfair isnt it? Life is
unfair, and if you think banking is better watch Wall Street.
At P&D we look below the surface, but the harder you make it for us, the more you reduce your
chances and even for us it is worrying if someone puts good communication skills and writes
text that makes the Teletubbies sound like Shakespeare. You should also know that CVs use a
particular style of English, which is subtly different from the one you learned in school. This
must be done right. In your first year alone
you will cost your bank more than a Porsche.
A lot of the people who will see your CV wont be
Would you spend 100,000 on high
able to actually read it in any useful way.
specification goods where the advert for them
was rubbish? Do you think Rolex adverts spell
chronograph incorrectly?
(No, we didnt have to look it up, and dont ask what Paul has on his wrist?)
Your CV is an advert for a high-value product.
You.
On the Wilmott forums recently we read of one person who applied to Goldman Sachs, but who
got his dates of employment wrong. It could mean he mistyped, it could mean that he was tired or
distracted whilst typing, other things may be true or false. One thing that is 100% true is that he
didnt get hired.
Looking at CVs, we see this is not as rare as it should be. Several % of people have dates that do
not look right and that does worry us. Of course, if youve done a part-time Masters in Finance, it
may well be that you appear to be doing two things at the same time, but it is worth putting in a
short explanation. Short is the important word, as we find that long explanations never sound as
convincing.
www.PaulDominic.Com
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Guide 2.0

Fonts and layout
Some things on your CV are important and you may want to draw attention to them. Your
eye was drawn to this part, but Do not do this excessively. It is really irritating !! Exclamation
marks are bad too ! (yes they are)
The only time breaking this rule has worked was a when hardcore programmer who learned the
Postscript language that Windows uses to talk directly to printers developed a program that
printed his CV as concentric spirals of text in varying size. Viewed on screen it would slowly
spin. Yes, Dominic hired him
If youre not prepared to spend at least a month learning reverse Polish notation, use a standard
template. (Stick to two main font families, a sanserif, such as Arial, for large headings and serif
font, such as Times, for main body text.)
On the other hand, we get a small % of CVs in
monospace fonts like courier. It is readable,
but ugly, and looks very amateur. We prefer
Times New Roman and Arial.
Make sure your CV is easy to read by getting a

friend to look it over, better still get someone who
doesnt like you to pick holes in it.
A surprisingly large % of CVs we get have fonts that drift due to cut and paste. Thus we will
see the font face or size change within a paragraph, or between two blocks of text. This gives
your CV a slightly untidy look, and gives the impression that it was knocked off without much
care to detail.
Blue CVs
Dont send us a blue CV, dont send anyone a CV that is black on a dark blue background. Just
dont OK? The default in every known word processor is black on white even for people who use
Apples rather than proper computers, and for very good reasons. This message has been in our
Guide from its early form, and in those days wed only been
sent one of these monstrosities. Since we published this advice
we have got two more. We dont know why, but every reason
we can think of is bad.
Print out your CV, and

make sure it reads well
on paper. Many effects
that look good on a
screen
are
quite
horrible or unreadable
when printed out in
black and white.
We see shading on some CVs, and although it can be useful for

drawing attention to important parts of your experience, we
often see that it can make these actually harder to read or spot
the very things you are trying to make more obvious.
(yes, we printed the guide...)
www.PaulDominic.Com
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PDF
Make a PDF if possible. These have a more professional feel than Word documents, they do not
have virus problems (yet) and they retain original fonts and layout. They will also usually prevent
people messing with your CV, provided you set the security options. Whatever software you use,
print it out to make sure that what you see is really what you get. Perhaps view on and print from
another PC to double check. A free 30-day PDF maker is available from Adobe.com and there are
numerous utilities available at sites like Download.com. This is also important when dealing with
some headhunters. Some like to improve your CV and this can be good, especially if a
professional makes it better. But some HHs have a rather impressionistic view of quant finance
and also may be tempted to add skills, as well as correct spelling. This does not always end
well; sometimes the improver gets a bit carried away and it does really happen that PDE can
accidentally get fixed to so that you apparently know a lot about PDF. Funny, yes. Good for
your job prospects? No.
We of course know that PDF can be a
probability density function, and for all we
know it also has meaning in cosmetic
dentistry, but the important point is that you
retain control over how you are presented.
You can help set the agenda of your interview by

what you say you can do on your CV. Make sure
this works for you, not against.
Document name
Give your document a name that will be meaningful to the recruiter. Call it YourNameHere.pdf
but not CV.pdf or worse still temp. No, we do not know why people do this, forming part of the
magical mystery of being headhunters. Making it easier not to be lost is in the spirit of making it
easier for the recruiter. Its not nice for the recruiter to have a large number of files with the same
name and its actually quite easy to get your CV written over by the CV someone else who also
called it CV. Yes, this happens as well and if your CV gets lost this way, then you dont get the
job with 100% certainty. At a conference recently, Dominic was told by one senior manager at a
top tier bank that just one large headhunter alone sent him 4 CVs per day.
It is easy to get lost in that.
Dates
Make sure your dates join up as much as possible. Some people in the recruitment process
worry about gaps. Do make sure that they make sense, you are supposed to be good at numbers
remember? Of course sometimes they need a little explanation and at P&D we really like to know
about when you were studying and working in the same period, or as with one candidate working
on a prestigious national TV science show. Managers often ask and not only do we not look good
if we cant come up with answer, you dont either.
Be honest
If you claim skills in some area, its a good bet that you will be asked questions about them, so
your CV should be a fair and positive statement of what you have to offer. No one expects you to
share your history of skin diseases, but youre going to be expected to back the talk with action
and as we say earlier it can help push them into asking questions on your best subjects.
Even honesty is not quite enough. You may say you have a basic level of skill, but some
managers just see the buzzword, and fire hard questions anyway. The only thing to do is make
sure you dont let it rattle you.
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Books
There is a growing trend towards self certification in quant finance. We see a lot of CVs that
list books the candidate has read. In general, that is a good thing, and certainly as we say above,
worth more space than your teenage qualifications. You do however need to do this right, and if
you do, it can help you do well at interview. When you say youve read Shreve, you are saying in
effect go on, ask me any question about his take on stochastics, same applies to Jaeckel on
Monte Carlo, Sutter on C++, or Gatheral on volatility. There is a good chance that not only will
your interviewer have read these books too, but that he has a copy. That means he has a set of
interview questions already made up for him, so you should be prepared to answer any of the
chapter exercises, and of course have read all the book. It looks great when you have mastered
one of these books, and really awful when you say but I didnt get as far as that. This is part of
the theme in this guide of trying to set the agenda for your interview.
You cannot hope to succeed 100%, but the
more you can help them to choose questions
that you might be able to answer, the less the
chances of being asked a question that you
have no hope at all of understanding, and the
greater of them walking into a trap that you
have carefully prepared.
Think through your career, and try to find

examples of things you have seen through to
completion without help. A couple will be useful
for your CV, but also you may get to mention
them in the interview.
Show that you can do things

By this point in your life youve soaked up a lot of information and acquired skills, which is of
course, necessary, but it is not sufficient. A big question in the inquisitors mind is whether you
can translate this into real actions that are finished, complete and correct. One can pass most
exams by getting answers wrong, but by showing good working and an understanding of the
principles. However, banks arent really all that happy if you lose a pile of money by getting
nearly the right answer, where you put a minus where it should have been a plus, the sort of
mistake weve all made on a paper. They like to see projects where youve started, worked to a
goal and completed without having to have your hand held. This is a big reason why many banks
like PhDs since its a powerful argument that you can complete substantial projects. However, if
youre going for a PhD level job, you still have to beat others who have reached that level.
Although it is their job, managers often dont really want to manage people much if they can
avoid it, and will select (and pay for) people who need to be told what to do less frequently. Of
course they tend to like people who also do what they are told.
Projects completed are good and you should be prepared to answer questions on them. The people
who interview you will often have your sort of academic background, so these questions may be
deep.
You may have changed direction in your career and you should be prepared to explain why you
made any given choice. It is important to be able to show that you didnt just give up on an area
when it got tough.
This is an important message to get across at interview, so if you can gently drop into the
conversation a couple of examples of things you have done, rather than just studied, so much the
better.
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Interests and hobbies
Several of the people you meet will want to understand what sort of personality you have, or
perhaps even whether you actually have one. Dont try to be someone you arent and certainly its
very hard to guess what exactly they want anyway, just aim to be a good version of yourself.
In finance you spend more of your waking hours with your colleagues than the person you marry,
so it is good to present yourself as interesting as well as smart. They all want to feel you can work
with others, so the clich of reading, walking and listening to music doesnt really do anything
for you.
Certainly you shouldnt fake an interest in something, but do try to find something with which
you can speak with a little passion. One candidate had acquired a formal qualification in stage
combat, we liked this since it is unusual and interesting without being kooky. Although its
relatively rare these days for quants to engage
in duels with swords on the trading floor, its
Hobbies are slightly useful, but do not be tempted
the sort of thing that catches someones eyes
to cite one merely to impress an employer, for
and can make a crucial difference. It also gives
fear
of risking that he asks questions that expose
the non-specialist people who you will meet
that youve been over optimistic.
something they can talk to you about. This
may sound trivial and sometimes it makes no
difference, but even a small difference can be important. If you think that it might look out of
place, then again all you have to do is ask.
People do get labels in the process at banks, assigned almost randomly based upon things
spotted on CVs. These are used because employers cannot hope to remember all the names of
candidates from CVs, and so they jog each others memories this way. Examples we have seen
include postman, death, farmer Giles and a distinguished female candidate whose earlier
work led to the label of fish girl.
Last job first

In your CV your most recent/current employment should stand out and be relevant to the job for
which you are applying. Since we emphasise that CVs are not always read thoroughly it is easy
for someone with substantial experience to be mistaken for a much more junior candidate because
they put their first job at the top.
Someone reading your CV may never get beyond this one piece of information. Make sure your
dates are correct. As part of the pre-employment screen at most banks, they check your past
employment and people have had offers withdrawn because of mistakes on this.
Make sure you read this from the point of view of someone who knows nothing about your life.
One way this goes wrong is where people put their most recent employment during summer
holidays, which is fine if an internship at bank, but much less so if working in a supermarket,
which can lead to the recruiter not bothering to read down to your PhD.
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Summer jobs
Most of us did summer part time jobs whilst studying and occasionally they are useful beyond the
welcome input of cash. However if they dont serve to indicate something nice about your
abilities, they should not take up much space, if any at all, since those lines can instead be holding
something useful.
Paul & Dominic

When applying to P&D, we also like to see a simple list of the various skills you have acquired,
together with some estimate of how good you are. If youre new to QF then it wont be obvious
which are most important, thats our job, so include as many as possible. They are for our own
internal use only, so dont worry about formatting.
Multiple CVs
Do not put all your career eggs in one basket, and
There is no reason why you should have only
try to make each application at least slightly
one CV. Presumably your entire life doesnt fit
specific to the role you are trying for.
on two pages and having produced the long
list above, it can be hard for you to work out
what to include. Thus the optimum may be to produce a variety of CVs, each emphasizing
different aspects of your experience and education. You may take this as an exercise to work out
the optimal number of variants and you will quickly find out that your chances dont hit a
maximum at one. This is made more important by the fact that failed CVs get little if any
feedback. This applies both to good CVs and bad ones. Think of applying for jobs as shooting in
the dark. If you dont hear a scream when you fire in one direction, you aim somewhere else. This
is a useful tactic when youre not sure whether some skill or experience is good or bad. For
instance you may want to avoid jobs with too much programming, but its hard to get a job with
no programming skills. Thus you can vary the amount of this you put on your CV.
If you are able to find out any details of what the job requires, and the sort of person they are
looking for, make sure your CV covers these explicitly. We would emphasise again that CVs are
often not read as you would a novel, but quickly scanned for relevant items. This process is far
from foolproof, and you dont want to lose out at such an early stage because of someone else
failure to spot your relevance.
Finding banks
In this document, we use the term bank for the firm you want to work for. It is course the case
that quants work for many different types of outfit, including brokers, governments, hedge funds,
insurers, thrifts, consultancies, regulators, ratings agencies, building societies and of course in the
case of P&D, for a headhunting firm. The wilmott.com website mentions any number of firms
and before you approach anyone its good to do a few searches so that you know the nature of the
target. If youre still linked with your college then it has many resources to help you. Most have a
careers office with directories of banks and they will have some contacts with banks in that
country. Your college library will have directories and of course there is Google and Yahoo for
getting a list of targets.
All large firms have entry level programmes of some form and you can relatively easily find a
good number to apply for. At this stage playing the numbers is important, since the ratio of new
entrants to the market to jobs is quite high.
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Guide 2.0
Direct applications vs headhunters

Of course, being headhunters we despise direct applications since they take away money from
feeding our children. The optimum course is a mix of direct and brokered approaches to banks.
There are a lot of CVs sent to a bank and typically each one does not receive that much attention,
so it is useful having someone to sell you and prod the manager into making the effort to
interview you. This is not trivial. On the day we wrote this, one of our candidates was being
interviewed by a top 5 bank 7 months after applying, and after a certain amount of pushing from
us. Apart from finding the right hiring manager (who has changed in this period), gently bugging
him, their application has twice been thrown away by their email system. That happens more than
you might think. Your Gmail account has a couple of gigabytes (please tell me youre not on
AOL), but the average corporate mailbox used by the people who will employ you has a limit of
100 megabytes and often this is policed by
random deletions of mail. Yes, really.
A simple personal web page which carries useful
information about you and your work can be a
useful supplement for a short CV.
Soft copy CVs
Now that we are well into the 21st century, it
is now very rare for a CV to be sent to an employer on a piece of paper. You can use web links to
your advantage if you have work that you would like to show off. Obviously it is ideal if you
have some innovative piece of financial software to show off, or papers you have published often
which can help your cause. We have seen that good papers can make a critical difference, if they
are indeed good. Once you fire off your CV, to a given target its contents are fixed, but a website
allows you to keep updating the content. One candidate went as far as to create a website based
upon one of the books in our reading list, complete with errata. He now has a pretty decent job at
a very large investment bank. As well as allowing you to show work and experience that cannot
fit in your CV, it helps with the theme of showing that you can do things.
You should not have a vast array of links, since they wont all be clicked on, so pick those with
the most impact.
Some headhunters will of course remove this from your CV, since they are control freaks, but at
P&D we dont meddle with your CV. Our view is that the more good things there are to say about
you, the easier it will be to help you get a job. The corollary of this is that the links must work.
Please test them before you send us your CV, and ensure that they stay live for as long as you are
looking for a job.
Putting your CV on the web

This has both good and bad points. It costs nothing, and it may be found by someone who is
looking for someone just like you. However, very few hiring managers bother to trawl the web in
this way, since they already receive quite a few applications. Certainly you can expect a lot of
spam to the email address, both Paul and Dominic have public email addresses and so we get a
lot of spam. Once you put it up on the web, you lose any control, and once someone has taken a
copy of your CV, taking it off your site wont make their copy go away. But with a bit of care you
can use a disposable email address, and not give your physical home address or telephone
number.
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Being Googled
It is mildly common nowadays for employers to Google on your name, so it is worth considering
some of the more interesting stuff you might post on bulletin boards. Thats one reason that the
usernames on Wilmott.com are kept highly confidential and never linked to recruitment.
What will happen to your CV

At P&D, we have a hardcore policy that we dont change your CV. At all. Even one tiny bit; the
manager gests your words with no adjustments by us. To be sure, we freely offer advice and
may ask you to expand certain parts at the expense of others.
However you should be aware that most headhunting firms will make at least some changes to
your CV. Sometimes this is small stuff like removing your contact details or the name of your
current employer, but you should be aware that sometimes they will adjust it, from minor fixes
to retyping the whole thing for their standard
format.
At interview, it is better to shine at a smaller set of
thing than to disappoint in a wider range because
you were too optimistic when writing your CV.
The value of skills on your CV
Some parts of the recruitment process are very
buzzword driven, this may be by computer or by human, so make sure you include a variety that
indicate what you can do for the bank. An important parameter to what you should choose is
whether you can answer questions on it. In this guide we tell you this more than once because it is
so important, the terms on your CV typically determine about 1/3 of what you will be asked at
interview, and since you have chosen to mention them, you will be expected to show
competence.
Overall it is a balance between having the number buzzwords to get the interview, but the ability
to deliver on these promises once they start firing questions.
Elsewhere we cover things you should know, but here are a few that are less valuable than you
might think:
SQL Databases
For a straightforward quant some ability to manipulate data is of course good, and SQL is often a
good way of doing this. But there is little point getting very good at it, since much of the data
points you use in quant work comes from non-relational sources. Relational databases like
MySQL, MS SQL or Oracle are typically quite poor on tick data, as is Sybase. Bizarrely, toy
database systems like Access can sometimes be better for high frequency data points, but few
people are impressed by it. A mention of SQL, maybe up to stored procedures, is good but not
much space should be given over to it.
It is more useful for a quant developer to know databases, and there is a good market for people
who can build or tame the tick databases used for the huge amount of high frequency data used in
quant finance.
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IT operations.
It is good to show that you can deal with computers in a practical way, but you should not give
the impression of too much hands on work. Network management is a very different discipline
at a large bank to any university, thus combining being useless with the possibility of opening a
door to a job you really dont want, babysitting the chaos caused by the latest demented attempt
to outsource IT support to EDS. However, low level network programming (packet/socket level)
is highly valued by some managers, and at the very least removes some questions about your
ability to be do real programming. Delete mentions of backups, cabling, and user admin.
Microsoft Powerpoint
We see this a lot on entry level CVs, presumably because it is seen as a business skill. Yes, well
maybe, but not this business. To some managers it looks a bit desperate to put this or things like
MS Word or Adobe Acrobat. Yes, HTML is a programming language, and occasionally a quant
will write a little bit of it, but it is not that useful, and may give the wrong impression. This
applies to quant developers as well, and you probably dont want the sort of job where they are
very interested in Powerpoint.
Too many hobbies

It is mildly useful to add some background colour to your life, and if part of your interview
process involves meeting non-specialist people, it gives them something to talk about. We see
some CVs where too much space is wasted on this, and in a few cases one is left with the
impression that their work was an inconvenient interval between sport.
One thing that surprised us when researching the Guide was the number of interviewers who
reported that candidates were dishonest about their hobbies and interests, such that when casually
asked about them, quickly showed that they had either just made it up or exaggerated to an
embarrassing degree. Bankers dont really care about the level youve played sport or learnt
languages or which books you choose to read, but they focus like a laser upon dishonesty. In such
cases, it is invariably fatal to your application. The books thing was mentioned quite often
which seems just bizarre. We really do hear of applicants who list reading as a hobby but look
confused when asked what was the last book they read. Not only does it expose their integrity, but
just how difficult is it to think of some book you have read at some time in your life ?
Foreign languages
Aside from the obvious fact that finance is dominated by English, there are those that think that
competence in French has value simply because so many quants are French speakers. Given that
in our experience they almost always speak good English, we dont see languages as an important
part of the academic armoury of a quant. If you are from a non-English speaking nation it can be
less valuable to put yet more languages on your CV, as it may worry managers that you cant do
English well. We note that well educated people from the Indian subcontinent often speak several
languages to a business standard, buts sadly these have little use in quant finance. For those from
the Peoples Republic of China, it is worth putting a little more about any time you have spent
immersed in an English environment, since experience is that you can benefit from experience in
speaking English. This is distinct from reading and writing skills, and can only be acquired from
extensive conversation with English speakers.
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Politically incorrect organisations
There are bodies in various countries that are perfectly respectable locally, but do not always
reflect upon you well when you go abroad. We have seen a couple of entry level people who quite
happily announce junior membership of the local equivalent of the Gestapo, to the extent that
even the most politically indifferent manager might wonder just what sort of person you are. This
is another case where you need to get your CV checked by a native English speaker. Military
service on the other hand is usually seen as neutral, and some managers actually favour it,
especially if you do difficult things or get to show some form of leadership. However, it rarely
justifies very much space on your CV due to lack of relevance.
Top 37 Colleges
or some other number, we dont care. As we say elsewhere, there are many rankings of
universities, and we aspire to be ignorant of every single one of them. This reflects the
indifference and ignorance of our clients who have better things to do with their lives than read
academic league tables. The fact is those who filter CVs have a variety of heuristics, experience,
gut feel, and simple prejudice to judge the brand value of where you have studied, and you arent
going to budge them easily. They have warm fuzzies towards Indian IITs, Oxbridge, Warwick,
QMC, the French Engineering schools and the Ivy League, except when they dont because they
went to a different place.
There is great diversity in what hiring managers and headhunters interpret as top. If you like,
you can say you went to a school in some list that placed it 37th or 9th or some other number and it
will be soundly ignored, or even possibly seen as a sign that you realise the place you studied was
rubbish.
We have learned from the forums that there are accreditations for various Masters degrees. We
learned this from the forums, rather than structured and diligent research because we dont care
about these either. We are especially proud that we cant remember what the lists are called,
much less which programmes are on them.
About the only technique that has positive value is if you mention a lecturer who they have heard
of. For this to work properly you have to be very familiar with their work, since of course thats
where you can expect some tough interview questions.
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Really Quite Amazingly Bad Things to put in your CV
Aside from the infamous Blue CVs we occasionally get CVs which catastrophically undermine
the applicant. At P&D we want to find you a job, its how we make money, but some candidates
seem determined to make this as hard as possible. Stating that you are pretty is easily top of this
list and, yes, we apparently have several pretty quants on our database. Stating that you hate
computers is commendably honest, but in modern banking close to suicidal. Text has poor
emotional bandwidth, and you must ensure that a desire to work in a particular part of the world
does not come across as xenophobia. In general, it is a good idea to let your headhunter know
about red lines in terms of location, business area, type of firm that you are not interested in,
but this is best done verbally unless you are 100% confident that this is not going to come across
as being difficult or arrogant.
Although earlier we talk of a positive spin on the facts, you should keep this within reasonable
bounds, and claiming that leadership in a
part time job in a fast food bar just looks silly.
Make sure the personal characteristics you are
Although it does occasionally happens that
selling from yourself are both true and suitable
teenagers find themselves in positions of great
for working in a results driven environment.
personal responsibility, we think it unlikely
they will be in charge of 750 people working
on their nations bid to host the Olympic Games. That example is of course fictitious, but some of
the claims we see are not very far short of this, and if we were not obsessive about personal
information could give examples of several extremely implausible claims.
Leadership is another one of those points on a CV where people inflict damage upon
themselves. Firstly, it is not a characteristic that is critical to an entry level quant, since you wont
be leading anyone. Teamwork is good, and we especially value those who show that they can
work in difficult conditions without having their hand held.
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Covering Letters
We have read quite literally thousands of cover letters, and in the main they are a wasted
opportunity. The first and most obvious bug is being simply generic empty statements that you
are a person worth employing. Instead you should take this opportunity to explain why you are
good for this job in particular. If you are replying to an advert, then detail which parts of your
experience and education are good for each point in the specification. It does not hurt at all if you
mention a good thing both in your CV and your cover letter.
The other common bug is to say you have mastered some desirable skill like stochastics, C++,
signal processing, credit or risk management, but there to be no mention of this in your CV. In
some cases we simply cannot work out how and when you might have got the skills you claim,
which does not help your case at all. A surprisingly large number of cover letters have words to
the effect that you have mastered derivatives pricing, aside from that not being likely in someone
who has never worked in a bank, and we then
look at a CV which has no mention of any
A covering letter is great for pushing harder the
finance at all, not even books you have read.
important part of your skill set, but makes sure
that anything you declare is supported by the CV
Thus a good cover letter says in effect:
itself.
You want X, I did X at Bank Y for two
years
This is right at the centre of our theme of making life easier for those who may employ you. The
less they have to treat your application as a puzzle, the better your chances.
Its also a good idea to mention where you saw the advert, since it shows you have some business
sense, and reduces their idea that you have just applied to every position you can find.
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Interviews
The most important tool for getting an interview is your CV, which is why we have a whole
section to getting this right, but it has to get in front of the right person, which means a multi
levelled approach, and simply sending your CV to one target bank and expecting a job offer by
return is not going to work so we first talk about
Kissing frogs
Like trying to find a prince by kissing frogs at random, you have to accept that it is rare for your
first attempt to succeed, and so be prepared for the long haul and to pursue multiple options at the
same time. This means applying to multiple banks and not being deterred by failure to get into a
particular organisation. We talk to candidates who have fixated on a small set of the most
glamorous banks, and their morale can be a little fragile when that doesnt work out. This
happens even to very good people. Also when you get offered a job in your target firm, it may not
be what you want.
Networking and personal contact is a great way if
you are looking for your first job.
Another way in which job hunting is different
from fairy tales is that even if the frog you kiss
does turn out to be a prince, it may take months for you to find out, so your tactics need to be
flexible enough to cope with this lag.
Getting interviews
Milk rounds and graduate recruitment fairs
These are opportunities to find out useful things about your target banks, and get yourself known
to people who may be useful to you. One thing that is worth knowing about investment banks in
general is that they are profoundly unlike a supermarket chain or manufacturer. IBs are highly
diverse with many component businesses, many of which are not only operationally separate, but
often do not even know of the existence of each other. It is not unknown with the work we do
with banks that people in similar business areas in the same bank only find out about each other
during our recruitment events.
Thus the routing of your application is a complex process, which is of course why headhunters
exist, since we have some model of how to get you to the right inbox. But P&D do not want you
to think that you must only use HHs because at entry level that simply is not true, since a large %
of jobs for newbies do not go near any headhunter, and any firm that tells you otherwise is not
showing the level of integrity that you should require of someone trusted to advise on your career.
It is worth engaging with HR at these events. Indeed, at some events they are the only type of
bank staff there, and the nature of their work means that they know more a lot of hiring managers
and what they are looking for. Do make sure you try to get their business card for future
reference.
HR people rarely have a deep understanding of quant work, but do have a pattern they are looking
for, and a reasonable gambit is simply to ask them, and see how well it matches your skills.
However, you must remember that the set of skills used by any bank is huge, so it is worth
specifically asking which areas might use your skills.
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HR staff are professionally reluctant to give out personal contact details for managers in their
firm, so your questions will work best if you talk about business areas that you would like to
work for, rather than appearing to pump them for names, which can spoil the mood a little.
Armed with this knowledge you can develop a version of your CV that more closely corresponds
to what they are looking to send them as follow up.
It is worth gently emphasizing that you are looking for quant opportunities, rather than the more
common graduate stream, since the majority of people hired by the bank go into other lines of
work, and you do not want to miss out on the right stream because they misrouted you into retail,
IT maintenance, or wealth management.
Alumni networks
These are of highly variable quality, but are worth a try, and even a relatively small institution
will have a usefully large number of former
students who may be willing to help your CV
You have to be prepared to make multiple
get to the right place.
applications, and not be thrown by the complete
indifference shown to you by some recruiters.
Random applications
More politely called speculative, there is
nothing to stop you sending your CV to managers whose names you have found. The odds of a
given shot succeeding are pathetically small, but if you read of a manager whose work looks
remarkably like your own, then it is worth a go. Your chances go up quite dramatically if you
take the trouble to find out about the nature of the work in your target area, and produce a
covering letter that details how you can contribute. Avoid phrases like your firm, since they
imply that this is some form of spam, rather than a genuine interest in the work of the person you
want to employ you.
Stalking
However you apply, you are well advised to check in with them every so often, just to check on
progress, and implicitly to check that you have not been forgotten or lost. You should ensure that
you do not come across as obsessive, especially since your application is a lot more important to
you than to them. Do your best to sound casual, and do not mention that they have chosen not to
return your calls, which is really what you have to expect.
Trying again
Just because a bank says no once, doesnt mean it despises you, indeed it is far from unknown
for them not to check whether you applied before, so it can be worth applying to the same bank
later. Some ask, and some do not. Hiring is not a simple matter of you being good enough, since
managers are often looking for a pattern, not just the smartest person. It is mildly common for
people to be rejected because the manager feels that their aspirations cant be satisfied in his area,
and decide theyd leave and/or be unhappy. However, if you are applying to two distinct parts of
the same large bank, it is worth letting them know. They will not be pleased if you didnt mention
it to them, since it can be embarrassing and thats not a positive feeling to cause in someone who
might employ you.
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Being there
At entry level, you are expected to do most of the running. If you are from far away that means
coming to your target city and seeing as many banks as possible. This is not stress free, but you
should allow for as much time as possible. Some banks will be flexible about when they see you,
others wont. Some will go for initial screens by phone, but many managers really hate these and
you will do your application far more good by investing in a ticket and a hotel room.
Make sure you are contactable and if you have good reliable friend in your target city to receive
mail, then that can make life easier since it shows that you can be contact. All the things about
being easy to contact are very true if youre operating remotely.
When you submit your CV, the a priori probability of getting that particular job averages from
about 2 to 5%. If youve got to interview this has jumped all the way to 10-15%. That is if you
havent ended up with a carpet bombing
headhunter. They do exist, and its not too
Some research on the people you know will
hard to find out who they are. The term
interview will help you a lot more than trying to
carpet bombing was given to us over a nice
learn a new mathematical technique in a few
dinner in Paris by a top quant manager at a
days.
large firm who had received so many CVs
from one firm, hed needed help from his
technical support people to sort out the mess caused by a flood of CVs that not only had he not
asked for, but had demanded they stop sending.
Be prepared
Before you go for the interview, find out the names of the people you are seeing and do a Google
on their name, as well as the bank/business unit you are joining. Try to avoid the error made by
one candidate who could not understand why the interviewer was so interested in one part of her
thesis. The candidate had quoted papers by the interviewer, but somehow managed to not connect
the interviewers name with the paper. They were quite shocked when at last the connection was
made for them. This was funny at the time, but she didnt get the job. This is less rare than you
might think. Many quants have written papers, especially those who may interview you and your
thesis will reference any number of other papers, pushing the probability up. This can work for
you as well. If you find some intersection, then there is a rather higher probability that you will be
asked on this aspect of your work. Make sure youve read up on that area and thought about it
before interview.
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Show some market insight
This doesnt mean you have to know the ticker symbols of all SP500 stocks, but it does mean you
should be able to comment on the reliability of common models, what are their main pitfalls and
how the quant and the trader might communicate about this. If you can quantify some practical
phenomenon that is rarely discussed in academic literature then you will impress. (Tip: Because
banks are often delta hedging, everything usually boils down to gamma and/or volatility.)
A standard form of interview question is to ask about the assumptions of a model and whether
they are realistic. You should start with the set of assumptions/defects in the classical Black
model and work your way up from there.
It is also worth reading the Economist for at least a month before interview. Some interviewers
are keen to see if you have awareness of the world in general. The Economist may disturb some
people since it covers other countries and has
no astrology column and relatively little
Get in the habit of reading the business press,
coverage of golf.. For instance, you should
partly
to get a feel for what is driving the markets,
reach the stage where you understand the
but
also
to develop a notion of how money is
relationship between the current price of oil in
made in real life.
nominal terms, as opposed to its high in real
terms. If you have a physics or maths
background, or are generally lacking in basic knowledge of economics, you should also try to
reach the stage where you can guess what happens to the supply of oil when the price goes up. A
surprisingly large number of market effects are best explained not by stochastics but by bog
standard supply and demand, for instance the non-intuitive way yield curves behave in long
maturity government debt. If you are completely stumped in trying to explain something, a good
straw to grasp is this very basic concept.
Brainteasers
There are several different types of brainteasers you might get asked, all designed to test how
your mind works under pressure and to try and gauge how smart you are, rather than how much
you have learned. This is an area where you should spend a significant amount of your
preparation time. After >20 years of education, your ability at mathematics is not going to change
all that much in the next few weeks and to an extent he same applies to finance knowledge.
At Paul & Dominic, we have been studying why people dont get a given job, to see how we can
help increase the chances of getting our people in and match them better to the roles on offer. One
of the largest variable factors is brainteasers, puzzles, etc. Our estimate is that with diligent study
and assuming that you are basically quite bright, you can reduce by around 50% the chance of
losing out this way and overall there is no single factor that you can change so quickly that has
such a big effect.
Some people are effectively weeded out at the brainteaser stage. Thus for the job seeker, its quite
likely that the most valuable resource on wilmott.com is the Brainteasers section of the forums
and they fall into the following broad categories.
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Straightforward calculation
Example:
How many trailing zeroes are there in 100 factorial?
Lateral thinking
Example:
Several co-workers would like to know their average salary. How can they calculate it, without
disclosing their own salaries?
Open to discussion
Example:
Whats the probability that a quadratic function has two real roots?
Off the wall

Examples:
How many gas stations in the USA?
How many manhole covers are there within the M25?
Why are manhole covers round?
Why are manhole covers being stolen?
General Probability and Combinatorics

Examples:
You toss a coin 20 times, what is the probability that you get exactly 10 heads?
There are 36 people in a room, what is the probability that at least 2 of them share a birthday?
Conditional Probability
Example:
Monty Hall problem. These seem to be the most common type and a lot of quant finance is
probability so demonstrating a grasp will do you a lot of good. Also tree-type problems where
coins are tossed.
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Numbers
Its worth having a few numbers at your fingertips for the manhole covers type of problem. One
manager recently told me in rather despairing tones of the stream of candidates who didnt have
even a rough approximation to the
population of the country they were
Possibly the single most valuable resource on
born and educated in. Several put the
Wilmott.com for job seekers is the pool of
population of Britain between 3 and 5
Brainteasers.
million (its around 60 million)
Actually its a bit more, a good trick
when estimating is to pick numbers with which it is easy to do mental arithmetic. Sure you can
multiply by 63.21, but why expose yourself to silly arithmetic errors?
Its also worth revising some basic probability and set theory if your recent study hasnt covered
them. Converging series can make apparently very long-winded calculations deliver quick results.
Its actually quite rare for them to really want you to add up the numbers between one and a
thousand in your head, but having the formula at your fingertips is good. Indeed that sort of
inductive proof is good practice for brainteasers in general. Quants tend to have greater depth in
applied maths than pure and that can be a weakness when good brain teasers seem to come more
often from pure maths and probability.
In many types of question, they want to hear your train of thought with much less interest in the
actual answer. Thus you need to share your thoughts about how you get to each stage. You also
should sanity check your answers at each step and make sure theyre aware youre doing it.
This is a soft skill thats very important in financial markets where the money numbers you are
manipulating are rather larger than your credit card bill.
Given the free form nature of the questions, it is very easy to slip into a set of numbers where you
end up with silly numbers for a given quantity. Thats perfectly acceptable, provided that you
catch yourself, indeed you may impress more this way. Thus its worth trying to estimate the
rough bounds for a numeric answer. For instance its not likely than more than 1% of the
population work in gas stations or are engaged in stealing or replacing manhole covers.
Work through the Brainteaser Forum on wilmott.com. You can practice for IQ tests and the more
you do, the better your score. Brainteasers are no different. And youd be surprised how often the
same questions crop up. We have spoken to job seekers who have been asked the same question
at more than one bank.
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Be confident
Relax, the hardest step is already past. Most applications are rejected without the candidate being
seen by anyone. Bayes law is your friend here. Merely by getting through the front door, your
probability of getting this job has gone up by a factor of three or four. Almost no one at banks
actually enjoys interviewing people, some even see it as a form of punishment. That means they
only interview you if theres a good chance they will want to hire you. Most people who are
considered for any job never even get a first interview. You dont need to be arrogant about this,
just know that merely by getting an interview youve beaten a good number of your peers and that
your probability of getting the job is on the way up.
Be punctual
This shouldnt need saying. If you cant be on time for your interview how can they expect you to
put in 12-hour days? If you are going to be late (and assuming it was unavoidable) telephone
ahead with an accurate ETA. The best strategy is to schedule having a coffee before the
interview, a little caffeine and sugar may well help and this is a useful time buffer. Probably the
worst bit about being late is not what it does to the interviewer, but what it does to you. The idea
is to present yourself as cool, smart and in control. If youve been stressed out dealing with
transport problems you knock a few points off your performance.
Dominic once went to an interview where the headhunter had given him the address of a building
the bank had left two years previously. He ended up very late, but out of sheer bloody mindedness
found where they had moved, and went anyway, 90 minutes late. Banks also often have several
buildings some distance apart make sure you are going to the right one. For instance Barclays has
a large tower in Canary Wharf, London with Barclays written in big letters on the top. Do not
go there. The Capital Markets Division is right next to the main station, but cunningly has no
indication that they are inside and if you leave by the wrong station exit, it can take 10 minutes to
find. No one knows exactly how many offices UBS has in London, but fortunately they are all
close to each other. Because it is a listed building, Goldman Sachs main building in London has
The Express written on it from when it housed a tragically awful national newspaper. The
entrance marked in is almost always closed by a big metal gate. Amongst other things, the main
Canary Wharf tower is the headquarters of Torchwood, not as many people believe in Cardiff.
New York is worse since many buildings often have absolutely no indication of what is going on
inside them.
Take your credit card and some

cash with you. We hear stories of
pre booked plane tickets not
actually being paid for, and you
need cash for a taxi if other
modes of transport let you down.
Simply knowing you can cope
with upsets like this should make
you more relaxed, which is worth
a few % points on your effective
IQ.
The point here is that you should make sure that you have
time to spare; so that this sort of thing is a little puzzle, or
the cause of a little extra travel, not something that brings
you late and breathless to the interview.
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Carry the phone number of the bank with you, both of the manager to apologise and reception
who will be able to help you find them. Also getting there vastly too early annoys some people.
Dominic was present at one very large firm where someone decided to show how keen he was by
arriving 45 minutes early. This needled the very busy interviewing manager so much that as she
left to collect him from reception she was heard to mutter well, we wont be hiring him.
Some reception areas get very busy and also seem to double as switchboard operators, so allow
10 minutes for this. It doesnt hurt to try to get hold of the names of other people you may be
seeing.
Set traps
Although some questions are set in advance, most interviewers like to also drill down based upon
your answers. Thus you should try to mention things that you feel confident in answering hard
questions about. This is best done subtly, by
phrases like this is quite like X, but the
A large part of interview is to show that your
answer is Y, where X is a bastion of your
academic work translates in the ability to deliver
competence; or by saying thoughtfully this
something
useful.
isnt like X at all, if you feel you are being
drawn into an area where you will sink. The
best way if you can do it, is to make sure you sound interested by a new problem, not in despair
that you dont know what is going on.
Show you can do things

We mention this in the CV section and heres a chance to casually drop in things youve done
that show you can dig in and finish the job. Its OK to mention problems you overcame and the
lessons you learned from initial difficulties. Good managers are sceptical of people who claim to
glide effortlessly through life and dont want to be there when such a person hits a rock.
Back when Dominic had a proper job, a senior manager overruled him over an interviewee who
claimed to have found no problems when dealing with a dreadfully difficult piece of work. Not
only was the person hired, but three months later had to be removed from the building when he
attacked his PC with a screwdriver and his feet. Screams were heard. It wasnt pretty. That is an
extreme case (no Dominic didnt say I told you so(much)), but you do yourself more good by
showing how you got through hard problems than by saying you found it all easy. However, it is
generally not a good idea to blame all your problems on your previous manager, as we shall see
later. If youre new to finance then you may find it hard to find examples that are directly
relevant. It is worth spending a little time trying to find good examples from your academic work
especially projects that you have completed.
Practical ability is therefore something that you will need to demonstrate a little more than theory.
You wouldnt have reached this point if you didnt have a respectable record for absorbing many
different concepts. So the next step is to see if you can apply what youve learned. When asked
your motivation for moving into finance, its worth asking yourself if this is true for you.
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Questions for the interviewer
It is a good idea to have a question thought out in advance it makes you look interested in the
position. You have three objectives when they ask if you have questions for them.
Getting the message across

A question can be a good way of bringing in things you want them to know, or to emphasise a
point you want them to remember. You can ask the importance of your experience in MC, C++ or
PDEs to the work youd be doing. This gets the message across, either as a reminder or to bring it
to their notice.
Find out more about the job

Good questions are on the direction for the team over the next year and how your work would
help them get where they want to be. It shows
interest and may give a better insight into what
Interviews are a two way process, and a key
you really will be doing. Although they are
objective is to find out whether this job really is
interviewing you, it is also the case that they
the one you should take.
are selling the job to you, since they want you
to accept if they offer. So its up to you to
work out whether its a good job or not.
Remember - do not ask things that you should already know, unless this is a ploy to reinforce
some point you want them to remember. You should discuss the job and the bank as much as you
can with your recruiting consultant ahead of the interview and consult websites and any
recruitment brochures. You dont want to give the interviewer the impression that you arent
interested enough in their bank to find out about it before the interview. Interviewers often say
that this is the thing that really irritates them most at interviews. The same applies to the business
area. At entry level theres at least 50/50 will be asked why do you want to be a quant in
electricity futures? With that level of probability you should spend a little time on some sort of
answer. A smart manager will know that you dont have a deep understanding of the business
hes spent 10 years mastering, but you should try to make a good shot at it.
Where possible it is good to preface a question with a statement about some achievement that the
bank is proud of (i.e., talks about at length on their website or in recruitment materials) e.g., I
know your office won the International Finance Press Award for Being a Bank last year, but
could you tell me
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Do you want this job?
The third thing to get from your questions to them is some view of the quality of the job itself.
You will often hear and read various bits of gossip about firms, but the problem is that the quality
of this information is low, not only wrong, but often imprecise. It may not even be wrong. So it
may be entirely possible the fixed-income division at a bank to be doing very badly at a time
when equity derivatives are making a big pile of cash, indeed there are known correlations based
upon the markets that cause such effects. In many ways an investment bank can be modelled as
franchise of many businesses sharing a common infrastructure. Thus you will see areas that are
great and successful not far from those that are not doing well at all. Your interest needs to focus
on the division and the people who you will be working with and who youre working for.
Of course the fact that they are recruiting is a useful positive signal that both the bank and area
are in good shape, since many firms react to bad news by slowing down recruitment. If you can,
try to find out whether this job is a replacement for an existing person, or is a new headcount,
new being the better sign. Also it is worth gently probing to see what happened to the previous
holder of the position.
The press carries little if anything of use to the job seeker in terms of trying to work out the real
nature of the bank you are seeing. Obviously if there are lay offs, then its a bad sign, but there is
simply not the level of detail you need to make a good decision. Theres no magic formula for
spotting a pothole in your career, although there are a set of things that you should think about.
High staff turnover is a bad sign of course, but if you ask this directly it may offend them and you
may not get an entirely useful answer, other than pretty average. One candidate we worked
with last year failed to spot that they werent being interviewed for the job at the bank at all. The
team was leaving to join another firm, and thought they would use the time before they left,
getting their junior members selected.
It is a good idea to ask how long a given person has been with the team. This makes for polite
conversation and you will get some idea how peoples work turns out in practice, as opposed to
the ideal that they tell you about.
As a very rough guide, the politeness we mentioned earlier goes two ways. If the bank is stupidly
inflexible over interview times, or you note a lack of buy-in from their attitude, these are bad
signs. You do however need to be sure that this is the bank, not the headhunter. Of course if
youre at entry level, you may be stuck in a rigid process as they trawl through what they may
feel is an endless stream of identical candidates, so you have to exercise a bit of judgment. Do not
forget that interviews are a two way process; they want to hire good people just like you want to
get a good job. This means they are trying to sell to you and they are often very sharp people,
with strong motivations, so bear this in mind when they are being nice to you. We have noted a
reasonable correlation between the quality of the job and being offered coffee or water at
interview.
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Appearance
It is entirely possible that in your interview process that every person you meet is not wearing a
suit, some may not have shaved. That doesnt always make it wise for you to turn up in smart
casual. How you look is not a big deal for quants, youre being paid to think. However, some
people do get remembered for the wrong reason and it can undermine your application a little.
You should feel comfortable and if that means a bit of perfume or good cufflinks then thats fine,
but see below
Neatness is good
More important than colour of cloth or design of tie, is the general impression of being in control
of how you look. This means wearing it well and being ordered in your appearance. It is worth
checking this before you go into the bank. Most banks have a toilet near reception you can use,
since youve taken our advice and made sure you have time to spare, you may want to check
yourself out in the mirror.
Colours
Black is the new black. White is nice for shirts and for no other visible item of clothing. Shoes
should be clean and preferably black for men and muted tones for women. A particular issue for
women is the poor workmanship in most of their shoes. Do not attempt to walk long distances in
new shoes that hurt your feet so badly they bleed (we know one person who stained the carpet
with her blood). Make sure your clothes fit badly fitting clothes do not look presentable and if
your trousers are too tight you (and everyone else) will find this distracts from the matter at hand.
There are some complexions that are generally complemented by certain colours and apparently
in some circles brown is seen as a colour for your clothing. It is not; it merely says things about
you that are never said to your face.
Dark blue is good as well.
Ties are best boring, novelty is bad.
Another reason for white shirts is that they dont show sweat, some colours do this terribly and
its not the image you want to project. A good shirt doesnt crease badly in wear. (Dominic wears
Thomas Pink shirts, two-fold Egyptian Poplin, though Twill can look quite good). This is of
course a fine example of how you should dress if you want to look like the best known
headhunter in global financial markets
Jewellery
This will never help you get a job, no matter how expensive or fashionable. Thus if you have any
doubt at all, dont wear it. If youre female and you have some brooch or bracelet, thats fine, but
theres no upside for a man at all in bling. Cufflinks of course are fine, as long as they are not
novelty you have no idea as to the sense of humour your interviewer may have: he may not
have one at all. Some banking people spend quite appalling amounts on their watches, so dont
even try to compete.
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Perfume and aftershave
Feel free to smell nice, but make sure that its not too strong. Some meeting rooms have poor
ventilation.
Traveling issues
One piece of feedback we got from the first edition of the Guide was on smelly candidates. Public
transport can be hot and sweaty and suits arent really ideal clothing for keeping cool. For a short
journey this doesnt really matter. However, if youre travelling for several hours to get to your
interview, on perhaps the EuroStar combined with the London tube, you can end up with a quite
noticeable whiff. This has affected the interview of more than one candidate, so its worth doing
what you can to keep cool. One suggestion we have if you are interviewing after a long journey,
is to carry your shirt/blouse and wear a cheap t shirt to throw away.
Make-up
Make sure you are comfortable in what you are
The following is for women. If youre a male
wearing, and aim to be slightly better dressed
reader, you really should not be reading this
than those interviewing you.
paragraph and we are rather concerned that
you are. Unless you really never wear makeup, a small amount is a good idea. Again, this gives the impression that you are making an effort
and will possibly counter the deadening effect of all the monochrome clothing you are wearing. It
should be discreet (i.e. no bright colours) and presentable rather than intending to make you look
prettier. There are jobs that you can obtain by being attractive, but they are rarely fun and never
intellectually rewarding. Any make-up should always be well applied if you cant get eyeliner
on straight, dont put it on and never wear nail polish if there is any chance it will chip before the
interview.
Ignore this section

But ultimately all this stuff about your appearance is froth not beer. Unless you apply some
malign creativity to your appearance, its unlikely to seriously hurt your application. We include
this section because we see that it stresses some people and unnecessary stress does possibly does
more harm. Be neat, turn up on time and youve already beaten a few percent of your
competitors. Things change when you go for your second job. Often your employer will have a
smart casual dress code, or maybe no code at all. This means that if your interview takes place
at lunchtime or directly after work, you will turn up in normal working clothes, rather than a suit.
This doesnt matter, even slightly, though you should make sure the HH knows this so he can ring
ahead and set the right expectation.
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Equal Opportunities
Banks really hate being sued for discrimination, it costs money, ties up lots of resources and looks
bad. Thus all banks impose on their headhunters contractual terms that say they should not do this
sort of thing. This means that some banks will send you an email directly asking you to disclose
your sex, race, age etc. This is not something to be feared, it will not be seen by the hiring
managers, or indeed your headhunter, and is there so that the bank has some sort of statistical
view of the diversity of both applicants and those who get offered jobs.
At one market meeting where a large bank explained that it was now adopting this approach,
some HHs who dealt with candidates from outside Europe and N.America were concerned that
their people might be quite spooked by this, since in some places this sort of information is
gathered specifically for the purpose of discrimination. We are not so nave to belive that big
banks dont ever discriminate, but they are smart enough not to set up a large publicly visible
system to do it.
P&D has two equal opportunities policies. One is a rambling, worthy and very dull document,
lost in some subdirectory of Dominics laptop. The other is our simple view that we do pimping
for the money. Even if it were legal, discrimination would cost us money since wed not be giving
each vacancy our best shot, and thus lose the competition to fill that slot against some other HH
who is more objective.
We see losing money for that reason as immoral.
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Understand the process
Interviewing people is a major industry all by itself; multiply the number of applicants by the
number of interviews they attend and you sometimes wonder how any useful work ever gets
done. Certainly this thought occurs to interviewers on a regular basis. They want it to end.
Although it is important to get the right people almost no one enjoys all of the process. This is
made worse by the fact that more than 80% of the work is wasted on those you never hire. The
record (as far as we know) is one bank who interviewed thirty seven people before they called us
in and by the end they were getting more than a little bit tired of it all. Some firms like DE Shaw
seem to interview quite literally hundreds of people for every one they hire, on a different
extreme GS interviews fewer, but favours a lot more interviews for each.
In a different direction, we adopted one candidate from the forums who was suffering from a
rather longer than normal process from application until start. Seven months in total. He got there
in the end, although at more than one point it
did look bleak. That is the current right hand
Try to find out from your headhunter how many
side of the distribution, though we now have
interview sessions you will be expected to attend.
set up a couple of students with research
sponsorship that will lead to a job nearly 18
months after we first talked to them.
This means that although you may feel uncomfortable in the interview, its worth remembering
that the interviewer might well want to be somewhere else as well. Anything you can do to make
their life easier is helpful. Not only does that mean being as pleasant as possible, but also turning
up at a good time and seeming like the sort of person they want to work with.
Most firms are less extreme than GS or DE Shaw, but you must still expect to be interviewed by
quite a range of people.
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Telephone Screens
Mobile phone interviews

Were old people (>35) and thus sometimes use quaint phone technology which involves long
copper wires physically connecting us to a huge ancient UNIX computer miles away (yes, we still
use miles). A typical quant has done enough physics to know that you can actually talk down
metal wires rather than a 1 mm thick cell phone that has more processing capacity than its owner.
Sadly, the quality of cell phone speech is hideously degraded and on many systems you cant both
talk at the same time. This is occasionally awkward when both speakers have the same first
language, but if both have English as second language neither comes out of the conversation
impressed with the other. The worst case is where the interviewers are sharing a speaker phone to
you on a mobile, which is better imagined than experienced. Although a large % of all the mobile
phones are made in China, this technology is particularly unkind to native Chinese accents, so try
to get it on a land line; this matters.
We have found that most telephone interviews
Mobile phones not only reduce the quality of the
are to screen you to see if it is worth bringing
sound, but also the way the interviewer perceives
you in and consuming the time of several
your quality. Try to use a land line.
managers. Thus they tend to optimise for
selecting out rather than finding your good
points. In our experience this means brainteasers are easily the most likely thing you will
encounters since they eliminate a wide range of people quickly, and yes this can be unfair and
error prone, and no, this is not the only time we see this in careers process. Some brainteasers can
easily be given over the phone, and so you can be expected to be thrown this sort of logic/lateral
thinking and math type problems.
Some firms like Credit Suisse screen a large % of those who apply at entry level by sitting
standard examinations.
Take Home Tests

You may be sent an exam to do before you pass on to the next stage. It is certainly pathetically
easy to cheat on this, but thats not the point. If you cant get through these questions then you
will be chopped up by the formal interview anyway, so they have great value for the bank as self
selecting filters that involve them in no effort.
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First Interview
The bank likes you enough to spend time and effort on you, and at this stage you will be usually
given the harder maths, programming and finance questions.
What you need to prove
You are smart. This will often take the form not only of maths questions, but also brain
teasers. Your CV makes a lot of promises, so now you need to deliver on them. It follows
that anything you put on your CV is a potential source of interview questions. But they
will ask questions that your CV shows you cant do. Life is not fair, nor is investment
banking. Sometimes this is done on purpose to see how you will react.
You can work with people. Smart is important, but you can expect to spend more time
with the people you work with than who you sleep with, so they would prefer to hire
someone who has decent social skills. Most of your academic work has of course been on
your own, so this is an area where many entry level people can seem weak.
You can get things done. In exams you can get good marks for nearly completing a
problem, or having the right idea and making a small error. That doesnt work so well in
finance where nearly right can be really quite unpleasant. In writing your CV, it is
worth sprinkling in a small number of things you finished that worked. If possible refer to
this sort of thing in your interview, as examples of your ability. A common failure mode
in entry level.
You can manage yourself and your time. Youre not a factory worker assembling Barbie
dolls. Your output cannot easily be measured and good managers dont micro manage
quants. Note that we do not say all managers are good, hence the My Manager Wants
Me Dead series on Dominics Blog. Being able to point to examples of where you
worked alone without guidance or invasive management will help your case greatly.
You are committed to this line of work. This may sound like a strange thing to have to
demonstrate. But more than once weve had feedback from managers that the candidate
seemed to have drifted into applying for a quant job with little idea of what the work was
like, or what they could offer an employer.
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How to prove it
Hopefully theyve read your CV, but this is only a very short summary. So as well as answering
questions, it is good to be able to show examples of where youve applied a skill, or where youve
coped with a particular situation. This bit of preparation before you go for interview is well worth
the time, and does far more for your chances than trying to cram in bits of maths and payoff
diagrams the night before.
Throughout the guide we emphasise the competitive nature of the market these days. When Paul
Wilmott worked on starting a university mathematical finance course it was rare for a university
to have such a thing. Now it is rare for them not to have at least one. As far as we can tell, the
University of London alone has something like 20 separate Masters in Finance programmes.
Emanuel Dermans autobiography My Life As A Quant is compulsory reading for anyone wanting
to move into this field. The market for quants
is of course much larger than when Derman
Examples from experience are a fine way to show
started working as a quant, but the supply side
you can do things, and most of those who have
has increased at least as fast. Thus you must
had any training at interviewing staff tend to
not also show yourself to be smart, but also
actively look for these examples.
more useful than the others going for the same
job.
The market is currently still relatively good (Q4/07), but if youre reading this as a student, it
might not be as good when you hit the street. Even if it remains in your favour, the best jobs are
always going to be harder to get.
Transitions
You need to be able to explain why you made various choices in life. Why this subject, why that
university, and of course why quant finance. If you are moving away from your existing bank
then you absolutely must know what you are going to say about your reasons for leaving your
current firm. We handle some of the bad reasons people have for getting away from their boss.
2..Nth Interview
Quants tend to have more interviews than most other types of staff because their work brings
together more disciplines, but also because you may be working across more than one area
controlled by more than one manager. So you next few interviews will be a mix of making sure
you are good and that the right managers buy into choosing you to hire. It is far from unusual
for them still to be considering whether to hire anyone at all.
This reaches a maximum at Goldman Sachs who interview staff far more times than anyone else.
We hear entertaining stories of headhunters who keep telling hapless candidates that they only
need to see one more manager and all will be well, and that the process will be over soon. GS
moves at the pace GS feels like moving, and any HH who tells you otherwise is not being honest
with you.
One side effect of this is that you will get offers elsewhere before GS makes up its mind about
you. It is quite possible that through the headhunter they will send the message that you ought to
turn down the other definite job offers so that you have even a slight chance of working for them,
and rarely will they move faster to get you once they learn of competition. So on balance it is not
a good idea to tell them of other offers in the first place.
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How interviews go wrong

Zeroth law of holes
When you find yourself in a hole, stop digging. You will be asked questions for which you cant
think of any answer at all. Some interviewers make the questions harder until that point is
reached. The trick is to cut your losses. With any luck they will just move on, unless its a critical
topic. Of course if its critical then its game over anyway. What you must avoid is wasting time
wandering like the lost spirit of ignorance over a vast formless expanse of your own
incompetence. A good response is to look them in the eye after a little thought, then simply say,
Dont know, sorry.
The exception to this are the all the tea in
China questions where you are asked to
Almost all interviews go wrong at least a little bit,
estimate some quantity like the number of bull
some managers even cause this on purpose.
testicles consumed by McDonalds customers
Almost no one ever blows a job due to one
per year. You arent expected to know the
mistake. Remember this when you make yours.
answer to these, indeed knowing it would
seem rather strange. They want to see how
well you can estimate an unknown quantity and how you think.
But the biggest hole catches people who get very nervous when things go wrong. This is about
the most negative personality defect you might have in a bank. When you realise youve said
something tragically dumb, stop. Then say something like let me think about that for a second,
and correct yourself. Make the pause work for you. Think the answer through and show that you
are capable of recovering. Remember that no one can talk about things at the edge of their
competence for five hours without saying something silly. You dont have to be defect free, but
self knowledge and recovery from a slip will score you vital points.
Sleep regularly, sleep often

Probably the most common error weve seen is not getting enough sleep the night before. As we
said earlier, the difference between you and your competitors is tiny and losing a small
percentage of your thinking ability through being tired has a non linear effect on your probability
of getting a job. Hours in a bank can be quite hard, so its really not a good idea to mention
feeling tired as an excuse for a poor answer. Not only will they not be impressed, but if you get
drawn into a conversation about how it degrades your performance it wont end well.
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Barbarians
The word barbarian comes from the ancient Greeks who took anyone who didnt speak Greek as
making bar bub bar noises, like a drunk Homer Simpson, not barbarian as in the icy
commanding tones of Governor Schwarzenegger. Although Dr Simpson has enjoyed careers as an
astronaut, rock star and nuclear engineer, few of us would hire him as a quant. Its important to
get the right balance between gushing at people so fast that they have trouble following you, or
being too quiet. You should try to practise looking at the reaction of people talking to you and if
the interviewer is clearly trying to move on, you usually should let them. If you think of the
conversation style used when first meeting someone you find attractive, you wont go far wrong.
(Just remember its a first date)
It is also the case that no one wants to discriminate against those who arent English speakers.
This is good, but means that if you arent understood they may just skip over what you say, rather
than pass comment on your accent. This is especially true when having a telephone interview
where you will not get visual feedback and the sound quality is degraded.
Read your CV
We lied when we said no one would read your CV, you will. Read it to work out which questions
it might provoke them to ask, why did you pick X?, I see youve done a lot of Y, heres a hard
question about it. This applies even to things you have done years ago, and mostly forgotten
about. We are often asked what should I read for my very important interview on Monday, and
a good answer is to make sure that you quickly revisit things they know you have done, to make
sure you can make a stab at answering questions.
Upon-reading this guide we see that weve said this more than once, it survived because it is so
important, and we wish all holes were so easy to avoid falling into.
Make eye contact

You need to make sure you look at your interrogators, they can smell fear. No need to stare at
them, just remind yourself to look at them when they or you are speaking.
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Which PhD should you do ?

We dont know.
Recently Dominic has become convinced that he is wise in all things. From high energy physics,
through numerical analysis, post-Black Scholes pricing, neural networks, econometrics, compiler
design, copulas, cutting edge string theory (how do you cut with string?), the formation of
galaxies, physics from solid state to plasma, and the life and times of the electron. He is
apparently not alone in this view of his good judgment. Almost daily, people contact him seeking
advice on how they should proceed in their research in these fields, as well as many others.
Recently Dominic has expressed important views on the future direction of molecular biology and
climate change. It is now certain than that
soon he will have advised more people on
Choosing a PhD topic purely on the basis of how
you think it will help get you a job is a tragically
their PhDs than any person now living.
bad mistake.
If you are one of those who have had the good
fortune to meet with Dominic, you will not find it in any way strange that he has no problem
providing this advice to any who seek it, but one is tempted to ask (quietly) why the advice of
someone who has won relatively few Nobel prizes is so sought after ?
It is of course because a PhD is now seen by many as a step to getting a good quant job, and so it
is rational for them to ask for advice on which topic of research has the best prospects of helping
their careers in a bank or hedge fund.
Many of the most successful quants have PhDs, and a large % of job ads ask for one as well, so it
is tempting to think of a PhD as part of your career plan. We are seeing that as an increasing trend
as more people become aware of quant finance work earlier in their careers, and understand that
the choice of PhD topic can seriously improve your chances of getting the best job, and the set of
employment choices you can make when you have completed it.
There are both real and imaginary conflicts between doing a PhD well and steering yourself
towards being an easy sell to employers in banks and hedge funds.
The nature of PhDs should be to do something new, and by definition that means we cant say
fluid dynamics is good or labour market analysis is bad, though to some extent we do give
that opinion that to people when they ask. Creating software models of large complex physical
systems is good, but the current market does not require that you model financial systems, indeed
some managers have expressed the view that finance PhDs often are less rigorous than physical
sciences, even if they are more focused on finance.
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Market risk
The simplest form of risk in any market is where the value of an asset goes down without you
having any hedge or diversification. Current conditions (Q4/07) are a useful example of this. The
credit sector has been a major source of lucrative employment for quants over the last few years.
As this sector grew, it was quite noticeable that relatively few new PhDs were entering the market
having studied the relevant topics, and these entry level candidates found themselves sought after.
This information fed back into universities, and thus the number studying some form of credit has
gone up substantially. Sadly they are hitting the job market just as this sector is having a bad time,
indeed since this is the first time this market has experienced substantial turmoil the people alread
working there had come to believe that this would never happen to them.
Thus putting a PhD into finance terms, it can be a substantial undiversified, unhedged position,
with a serious time lag between getting the information that drives the trade and the payoff. This
means that great care in choosing a topic can
still fail because the market moves in the
It is worth doing some market research on how
wrong direction.
your PhD topic and choice of university is likely
to be perceived.
Choosing a supervisor
Of course to a large extent, you dont choose a supervisor, they choose you, but you can make
some effort to get one that will help you in your career. This requires a little care since if you are
smart enough that they want you, they may well want you to follow them into academia.
A name brand supervisor has value in addition to the expectation that he knows the subject
rather well. There is a virtuous circle that he is more sought after to supervise, and thus if you
score him you have demonstrated that someone wise in your field thinks you have merit beyond
the sterile numbers of exam grades. He will more often have good networks of contacts useful for
internships and first jobs. This makes him still more sought after. It is the case that at P&D we
occasionally get directly approached by such illuminati which tends to commend more of our
attention which is of course good for them.
As headhunters we recognise that having a hook to sell you to the bank can make the difference
between getting an interview, or not. That is very useful, but once you are being interviewed it
does not get you anything further, and of course you have set a high expectation.
The possible downside is that some PhD supervisors are frequently travelling, sharing their
wisdom on important committees, or engaged in writing yet another important book. This can
mean that you do not necessarily get very much of the great ones time. This is not restricted to
the great and the good, and some supervisors do not engage as directly with their students as they
might. Thus if you possibly can get to meet with his current students you will can research this
with a little care.
There may also be a trade off to be made between the supervisor you want, and the brand of the
university, which leads us to
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Location of universities
This is very much a second order issue. It is useful to be in or near London, Chicago or New York
because you can network with people in finance, and attend seminars and other useful events.
This applies even if you are not studying finance, indeed it is slightly more important for people
making one of the standard transitions into finance than for those directly studying it.
But to be of any value, you do have to put in the effort to go to these events and networking
opportunities, since most wont come and find you. We do meet people at London events whove
come from Amsterdam or Paris, but most stay where they are put. There is more quant work than
you might think on the West Coast of the USA, but one is not really part of the scene there.
Given the choice between two equally attractive programmes, you should optimise with respect to
distance from one of the big three centres, but do not pick an inferior option just to be near the
right people. If you are serious about this line
of work, and prepared to do a bit of travelling,
In the years before you finish your studies, do try
go where you will get the most value added.
and make the effort to attend some of the many
finance
events to help you learn where you should
An advantage of big universities is that banks
be focusing, and to make contacts.
will do campus recruiting for people like you,
and you can get exposure to fields that are
useful even when not contained in your narrow field of study.
As headhunters we often see these job specifications that say PhD from top university but we
all know that many smart people are not at the top universities. This is especially true at PhD
level where a leading researcher may not be at a leading university, and so his students dont get
that label.
You will see job ads that say that they want graduates of a top 5 university. We have seen
demands for the top 7, top 8, top 10 and one day we are certain to receive top 13, it may
even somehow be fractional. These are a sign that something has gone at least slightly wrong with
that firms recruitment process, not that it has high standards. Does Top 5 (or Top 17, or
whatever) mean in the US, or in the World, or in the UK ? We are rarely told, and interpret it as
emphasis rather than a formal specification.
Do you feel able to compare universities in Argentina with those in Poland or Canada ?
There are many rankings, and include the universities achievements in dead languages, feminist
poetry, astrology etc, so that most of these lists have no real utility at all, but it helps the more
lazy people in the process do less work. But branding does have value, since on average a more
prestigious place is more likely to have smarter graduates.
A PhD is a fine shiny badge to wear, and will help you get to many of the places you want to be,
but it is not a risk free option, and it does matter what you do.
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Failure modes
You may be assuming that you do finish the PhD, which doesnt always happen, which can make
focusing on its career implications a dangerous way of thinking about your future. PhDs are quite
unlike taught degrees. You will be working to a much larger extent on your own, and pursuing
targets that are far less structured and well defined than the courses you have taken so far. If the
topic does not really interest you, or is chosen on some ill conceived notion of what will get you
get a job, there is a good chance that you will hit a vicious circle of low motivation leading to
slow progress which causes you to lose hope that you will ever finish; resulting in a nasty cocktail
of burn out with little learned or discovered. At interview, this may express itself as an attitude
problem, or simply not being very smart. A depressing % of PhD candidates quit, and that rarely
looks good on the CV. However, some employers see your PhD as a form of filter, since to get
into a good programme you have demonstrated some extra level of being smart and
accomplished, and we sometimes hear that they dont care all that much about whether you finish.
But the odds are not in your favour, and having a recoverable crash that consumes two or three
years of your life is not anyones idea of a
Financial Markets are in constant change. A topic
great plan. Thus by far the most important
that appears exciting and lucrative today may
thing in this section, and quite possibly in
well be yesterdays news in 4 or 5 years when you
this whole book is to help you decide to do
finish
your PhD.
something that you genuinely find
interesting, and which will engage you both
at an intellectual level and attract some passion, since you must at some emotional level
genuinely care at least a little about your work. Seeing it as simply the longest homework
assignment of your life is buying years of misery, and quite possibly a less satisfying career at the
end of it. If all that does not convince you, then its pretty clear to us that you can expect to earn
less money. Which as henchmen of the global finance community we are not in favour of, one
little bit.
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Physics vs finance
A common dilemma is whether to change track from physics or engineering to finance for the
PhD. We have yet to see anyone go in the opposite direction, which does contain significant
information, as does the fact that some hiring managers actively prefer physics over finance
PhDs. But again there is the pattern that the headline topic is less important than how you do it.
A common issue with finance PhDs is quite the opposite of what you might at first expect, in that
they often seem to be further away from use in banking than physics or maths. Often there is a
striking lack of any attempt to relate the theoretical model to observed movements in the market,
and often we see people who have simulated markets to support their research. One reason is that
financial data can be expensive, and often requires work to turn it into something you can use.
But this work itself makes you more valuable since it is one of the tasks you must do as a quant in
a bank, and a critical part of being a successful quant is bridging theory and reality. There is
nothing wrong with simulation, and getting to
the position where you understand any system
Make sure your field of study has a broad base of
well enough to simulate how it may behave is
maths, not just those to support the thesis you
valuable, but it cannot be a completely
ware working on.
adequate substitute for feeding real observed
data into your model. Managers have told us
they feel a mixture of sadness and frustration when an obviously smart newbie explains their
work but has made no effort to work out whether the model is in any way right. When choosing a
PhD topic you should do everything you can to ensure that real data is available to you,
personally to validate and calibrate your model. It is not enough that data exists somewhere, you
must be clear that it can get to your computer.
Since such a large % of working quants have a background in the physical sciences, it should not
surprise you that by now nearly every mathematical and algorithmic technique used anywhere in
that field has been thrown at finance to see if it is useful. People with a good physics background
thus tend to have an understanding of a larger subset, then people with pure finance. There are
some large holes, typically in statistics where physicists are sometimes not only ignorant but quite
proud of not even grasping the basics beyond calculating the mean, and seeing GARCH et al as
for people who dont understand what is going on.
Not all types of physics are in any way useful, and without doing some serious investigation, it is
far from obvious which will help you. Thus is if you are in this field, at the earliest stage you
must start trying to think how to apply techniques in a more general way. That is not to say that if
you feel a technique is not useful, you should bypass it since often it is only when you really
understand a formalism that you can work out how to use it in any situation other than the
carefully set up framework of a lecture and exam question.
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Finance PhDs have the advantage that most things you will learn will be set up in the context of
money, and that you will pick up the motivation behind the processes. It is critically important
that you achieve the right level and direction of focus if you are to make the most of this. It is
necessary and useful to get deeply into your specific topic, and balance this with the wider
context and a general literacy. Some of the feedback we get from hiring managers is that the
general knowledge of finance they see from someone who has 3-5 years of specialist study is far
lower than their expectation. That means exploring digital options even if you are doing credit,
knowing the growing importance of volatility as an asset class whilst studying market
microstructure, and even when there is no apparent connection between them and your own topic,
you should try to see if there is any way they can be used either to help you model, or to turn it
into a viable trading strategy. This means looking at these extras for hedging, or putting limits on
your exposure. This is why articles on ideas like using FX as a predictor of sovereign debt
default, or linkages between credit and equity markets should be part of your normal reading if
neither asset class are in your area.
Applying ideas across markets is one of the
things that separates a respected quant from an
Excel jockey whose working life is looking
after broken risk report spreadsheets.
There is a huge delay between choosing a PhD

and looking for a job. Your career ought to last
decades, so make sure that even if you are doing a
cutting edge highly sought after field, that you
hedge with skills that have longer term value.
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So what is the right question ?
Although it matters what PhD you do, a more important term is how you do it. There are elements
that you may be able to include that make you more employable without making your PhD in any
way less valid. Elsewhere in the guide we list the maths, finance and programming that you ought
to learn, but you will note that none of them are tied to finance as a unique discipline. Nearly
everything in QF has been stolen from other subjects, so it is entirely reasonable to get these skills
in whatever form best suits you.
Thus the right questions are at quite a low level of granularity.
Above all to your own self be true.

What are you good at? We dont mean the large collection of exams youve passed by now, but
what do you delight in doing ? What do you outclass your peers in ? What can you do by brute
force and hard work ? Those are the sort of
components that a good academic PhD and
The content of the PhD is more important than
one that will help your career are made
precisely which topic you choose. Use the right
from. There is inevitably a trade off between
methods and learn the right techniques and you
your comfort zone and what will earn you a
will beat people who do more obviously relevant
living, but it does not have to be all one
subjects.
sided.
Make sure you have the full skill set

In many universities you are free to sit in on courses without taking the exam, and this may be
very useful for helping you adjust your PhD study to be more useful to your career. However this
is not always the case, and we find that often the finance courses are a great money spinner, and
so they will be off limits. This is not always fatal, since most of the maths can be got from other
courses which arent so in thrall to accountants. In particular, the programming on most finance
masters programmes varies from the mediocre to the rather funny, so you may do better by
getting this elsewhere. That often does not include CompSci departments who usually have lost
the plot and will try and foist Java upon you. It is worth checking what the policy is on auditing
courses, as well as the attitude of your supervisor.
Make sure that your full skill set makes it to your CV, especially if it is not obvious from the title
of your PhD.
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Good things to do in a PhD
We are not suggesting that you create a PhD topic around these following points, but instead
when you get a choice to do something that will help you get a job in quant finance these are the
classes of experience that you might choose.
Variety in techniques
As a quant you will rarely have the luxury that the problem you are working comes with the name
of the method you should use on the label. A good quant PhD works with lots of different
mathematical techniques. Constructing PDEs to describe systems is of course good, as is use of
finite difference and Monte Carlo to solve them. But any analytical technique that models things
that happen is of at least some value in finance as are copulas. Thus econometrics is good as part
of a time series analysis portfolio of skills, and signal processing methods are showing good
demand.
Depth of technique
Conversely, managers recruiting for the best
jobs like to see some degree of excellence, the
distance you get ahead of others may often b
more important than its direct relevance to
finance.
If you can show that you have both developed a

mathematical model, and made a worthwhile
effort to make it consistent with real experimental
or market data then you will outshine those who
just do lots of equations.
Real data
Over the last couple of years we have seen an increase in the demand by employers for entry level
people who have got their hands dirty with real data. Another word for real might be raw
data that has not been pre-cooked to make your life easier. Real data has many defects, not just
noise, so the more scars you can show from this, the more in demand you will be.
C++
If you are going to be doing coding, then it should be in C++ if at all possible. You should try
more than ordinarily hard to make sure there is some programming in your work. First because it
will help you get a job, and second because you need to find out whether you can actually cut
code because some very smart people simply cant. Given that quants do a substantial amount of
development, you dont want to find that out once youve burned the bridges for staying in
academia.
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Bad things to do in a PhD
Master of the big machine
PhD students often become wise in the ways of ultra sophisticated technology used in bashing
particles together, heating or cooling stuff to unreasonable temperatures, or the super powerful
computers used to try and work out what happened when you did these things.
The important separation here is whether you are an engineer or mechanic. The huge magnets at
CERN require exquisite physics to function, involving lots of problem solving and difficult
mathematics. Writing programs to interpret the data, removing bad data points, detecting
structures and patterns in real experimental data, is good especially if you run your software on
high end clusters. However, running these clusters efficiently is also often a task requiring smart
people, and the same thing applies to the vast array of arcane equipment that supports modern
science. It is not actually that surprising that
the World Wide Web came out of CERN,
Try to build generally useful skills, and avoid as
given their requirements for high end data
much as you can the intense detail of packages or
management.
systems that you happen to use in your studies.
Mastery of these devices is heavily fact based,
in any system there are things you just have to know, rather than work out, but beyond that
particular project, they are of zero value. That problem applies to other parts of science, as much
as the rather larger jump into banking. For instance Beowulf clusters are used in banks, but the
maintenance of them is rarely a dream job. If you fall into technology maintenance the best path
for you is that your job is outsourced to Bangladesh. If youre very unlucky, you will be sold like
a chattel to a firm like EDS who has successfully sued many of its former employees who had the
temerity to leave for more money. Bonuses ? Oh how we laughed. Avoid maintenance, no matter
how impressive or important the machine. If you have some emotional need to look after
something, have kids or cats. Cats are better, they dont die if you leave them on their own for the
weekend.
Thus during any PhD project, you should have a look at your portability, even if you think you
will probably stay in science. Projects end, it is the way they are. We guess the average age of
Guide readers is 26, implying that your career should be 40 years long. A big reason for short
careers is tying yourself too closely to a project that dies.
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Software packages
The biggest issue with most packages is that they work too well. This may come as a surprise if
youve used some maliciously buggy tool without documentation that your supervisor has foisted
upon you. But as we see later with Monte Carlo there is a trade off between getting results to
publish and learning things that help you be a better quant. The second problem is related to
Master of the Big Machine, that they contain much that does not teach you principles of deep
things, or have any relevance outside your project.
However, if the package comes with source code, like many in academia, then you have the
opportunity to work on a large buggy program. This is better than it sounds. Really, honest. As
long as this does not take up a huge % of your time, it will both make you more attractive to
employers, and more useful once they have hired you. If you do this, be sure to include it on your
CV, because optimised and fixed bugs in X, looks very much better than used X. It follows
that if you get the choice between open source tools and proprietary, you will get more out of
using one whose workings you can follow and learn from. It is important to make sure this
message comes across as showing your ability to overcome problems, and not as complaining
about the toughness of the work. But we would emphasise that this should be a useful component
of your work, and the core.
This approach of course has a price, since tools like Matlab have a rather better user interface
than their open source equivalents, so you will spend more time fighting their strange ways. The
optimum is to use some of both.
It is worth looking at job ads to see which tools are used in finance, and if you can use them in
your work. We notice Matlab and Root falling into this category, however we would emphasise
that nothing beats learning C++.
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Why we hate Monte Carlo.

A lot
Pretty much any numerical problem can be solved by MC, even deterministic ones that on the
surface seem to have no relationship to randomness at all.
We know that some equations are extravagantly hard to solve, some have no analytical solution at
all, and many just look so ugly that you reach for you random number generator as a reflex. You
can guarantee a result that you have confidence in, which can be vital if it is standing between
you and finishing a project.
The problem that we have as headhunters with MC is with precisely that power, because like any
other power it may corrupt you. Since you can use MC for any problem you may be tempted to
use it for every problem. Some people we talk to seem to have used it as a way of avoiding
understanding the thing they are investigating, and relentlessly bashed it with a vast horde of
random numbers until it surrendered. As a tool for getting to a new position to look at something
MC is fine, but when it becomes the focus of your work, it may not be clear that have really
understood anything.
Also of course, if you dont have any idea whats really going on at all, an MC simulation of the
physical process might give you insight, or at least let you feel as if you are making progress.
However it is a common component of the Value at Risk (VaR) of most large financial firms,
which perhaps gives you some idea of how risk can sometimes be a very black art.
MC is often quite slow, and whereas in academia, it is perfectly acceptable to have a result that
takes a week, in a bank it is very rarely so.
Neural networks, genetic algorithms

There are several non-analytical techniques which although distinct from Monte Carlo share the
risk that if misused deliver a result, but without opening up your understanding of the thing you
are studying. Their ability to hack through problems that previously defied solution is
acknowledged, but at the price that their solutions, although optimal may be brittle, and since
there may be no way of knowing why it picked that result, or even framing why as a sensible
question, the results are less trustworthy. There is demand for these skills, but for these reasons
they are less common than you might think. If you have already committed yourself to holding
these skills, then you need to arm yourself with good techniques for validating the results.
There seem to be two main failure modes for NN and GA practitioners. From earlier you will
have seen that being a user of a package is nowhere neat as good as someone who contributes to
its development. This applies strongest to NN and GA systems, particularly if you are from a
CompSci background, since one of your selling points is supposed to be a superior programming
ability. Skilfully driving a package someone else wrote, really does not count at all. Thus you
should get yourself to a position where you can contribute to the development of these packages,
even if they are not written in C++.
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The good side of Monte Carlo
It doesnt have to be as bad as we indicated earlier. Monte Carlo can be a rigorous field, with a
range of techniques that give better and faster results than a simple, big loop and averaging the
result. In our reading list we have two good books on the subject. What makes us sad is talking to
entry level people whove apparently used MC at considerable length in their education, yet to
whom the terms variance reduction, antithetic variables or Mersenne twister, are unknown,
or worse still are seen as advanced topics, far beyond their comprehension. This does not just
apply to physics PhDs who take a MC shortcut to solve a gruesome numerical analysis, who at
least have the excuse that it was a sideline but to finance PhDs who simulate markets rather than
work with real data from a price feed. We see some people with specialist masters in finance
degrees who have no idea at all about efficient MC, and that is frankly shameful.
Monte Carlo is by far the easiest class of algorithm to spread over multiple CPUs, and so all the
major banks have substantial MC farms. Understanding of this is useful, but again be careful not
to get too sucked into operational rather than algorithmic or analytical work.
It was Phelim Boyle, then an actuary, who
first proposed using MC for finance
problems. That was back in the 1970s.
Professor Boyle has written a book on the
history of derivatives, with his son as coauthor.
If you are going to put Monte Carlo on your CV,

you should be able to answer questions on
antithetic variables, importance sampling,
variance reduction, and why the RNGs in most
standard libraries are garbage.
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What you should know about Monte Carlo
When should you use Monte Carlo, and when should you choose some form of Finite Difference
method? This is actually a mildly common interview question even though it should not be, since
it is pretty close to trivial. Given how basic this is to the whole field it is scary and depressing
how many people stare blankly at the idea. No, were not going to tell you how. There are a
couple of relatively simple answers, and if you dont know, then you need to hit the books again,
and/or send a nasty email to the person who taught you numerical methods.
In the main book list we suggest the two best technical works on Monte Carlo in Finance, one by
Peter Jaeckel and the other by Paul Glasserman
Here are a few key points:
Monte Carlo uses random numbers to

solve problems. Usually we do
something lots of times with random,
random numbers and look at the
statistical properties of some end
result, such as the mean of a function
of all those random numbers
Do not fall into the trap of thinking that because a

simple MC technique can solve most numeric
problems, that you do not need to understand the
depths of the technique.
The problem under examination can involve probabilities, in which case the role of
random numbers is rather obvious, or may be deterministic. Its not immediately obvious
that there is a connection between deterministic problems and random numbers but there
often is. We see this in finance where the Black-Scholes model for the value of an option
when the underlying asset moves randomly can be interpreted as a a partial differential
equation for which there is only one, deterministic, solution.
Monte Carlo is usually the easiest to code up for any given problem. However it often is
not the easiest to code well.
If you are trying to find the statistical properties of some function (or functional, look it
up) of the random numbers or asset paths then the value of statistical property in question
will depend on how many random numbers or paths you generate. The more, the more
accurate your estimate will be. The rule of thumb with simple random numbers is that the
accuracy is of the order of one over the square root of the number of random
numbers/paths. So if you want to halve the error to improve accuracy it will take you four
times as long.
MC can be a bit slow to converge for simple problems. For the simpler derivatives
valuation problems you may be better off with the harder-to-code-but-faster-to-run finite
difference methods.
MC really comes into its own when you have a lot of complexity or multiple underlyings
to simulate.
Some financial problems can be recast as integrals that you have to evaluate. Again the
rule of thumb above applies to basic MC. However
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There are some MC techniques that take advantage of special properties of numbers
which look random but are not. Confused? The subject of quasi MC or low-discrepancy
series is that of finding sequences of numbers that when looked at casually look random
but are structured so as to have statistical properties that make any calculations using
them converge much faster. Random numbers generated by classical MC means will
result in clumping of numbers (too many are similar) or barren zones (some regions will
not have any numbers), thats just the nature of randomness. But the low-discrepancy
numbers are designed so that they fill out the required space in a way to avoid such
problems. The benefit is then seen in convergence to a solution, usually of the order of
one over number of paths now, much faster than standard Monte Carlo.
You should understand that quasi is not the same as pseudo, when working with
sequences of generated numbers. The standard random numbers
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Choosing a Direction
You need to work out how committed you are to a particular sector of the market. Some people
find that they prefer fixed income to equity products, others feel that commodities offer the best
opportunities for them. Some managers feel that you should decide at this early stage which
product class should be your home. This is frankly a bit unrealistic. A newbie rarely has the
information to make that sort of decision, and of course anyone whos smart enough to predict the
relative success of several business areas of the next few decades is going to end up ruling the
world anyway. But just because it is not a reasonable thing to demand, doesnt mean that some
managers dont think that way.
You dont have to make up your mind yet, but when you accept an offer you are making some
other doors quite hard to open in future. It is possible to move between the main types of business
area, but not always easy and harder still to do
it from a position of strength in your later
One of the industry standard lies in recruiting is
career. Thus getting a job is a competitive
that if you take this unattractive job now, the bank
international sport, where it is not enough to
will recognize your potential, and move you in the
succeed. Others must fail.
right direction in a year or so.
Some people do have an excessive preference
for a given bank, often Goldman Sachs. This is of course a fine ambition, and they do make great
big piles of money. But that does not mean they want you, and discovering this when youve
spent a lot of time on getting a job there, but made no attempt to hedge that position can have
mildly unpleasant effects on your career.
So the best job for you may not be at your target bank. They may offer you a role considerably
below your level. Of course it may be worth your while working in a lower quality area to get
into the one you want, but be aware that moving areas in a bank is really quite hard. If youre
good your current manager does not want to lose you, and if your unhappiness with your current
role impacts your work, youre not that attractive to your target manager. Some managers are
entirely selfish on this point, and will use the bonus mechanism, and anything else they have
available to keep you in your current position. That can include killing your bonus for that year if
they think you will leave anyway, and using the money to make your colleagues happier.
Bottom line is that if it were easy and efficient to change roles within a bank without having to
leave, there would be a lot of poverty stricken headhunters, and Dominic would not have been
able to build a castle for his sons.
Also, you dont know how good you really are, most people have some rough measure, but given
that youve not met 99% of your competitors, its hard to judge, therefore our advice is to apply
to roles that you think may be just out of reach, the cost is low, and the upside is good.
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When to Apply
The time to start the process is as soon as you know roughly when you are going to be on the
market. Sooner is almost always better than later.
Our current record from receipt of a candidates CV to a job offer is just over a week, but we also
set up one quant in employment more than a year before they expected to start at the bank. These
are extremes, but they illustrate that the process is flexible, yet hard to timescale with any
precision.
An increasing number of firms have structured training programmes for quants. Because they
have fixed dates, a late application means you either have to wait, or miss out on joining the
programme. These should not be confused with the vastly more common graduate training given
to other types of workers in the bank, and it is entirely possible that your application will end up
there, and thus getting you an interview on a help desk, sales, or in one extreme case interviewed
for manning a counter for retail customers.
Apply before finishing your PhD

Masters programmes typically have a very fixed end date, but most PhDs do not. It is also the
case that the final PhD write up is observed to be at least a little non-deterministic. It is best to
finish your PhD before starting work and not even slightly a good idea to try working on your
write up and do a hard new job at the same time.
Apart from the stress of serving two masters, a critical thing to your career is the early
impressions your employer makes of you. The quality and type of work you get given is a
function of what they think you can do, so you want to be 100% committed to doing early work
well. This conflicts with the finishing touches to your PhD and given that your first job may
well leave you tired, the PhD will drag on for longer, all the time reducing the impact youre
making on your new boss.
Employers understand the sequence of events around a PhD, since a good % of them have one
themselves, and theyve hired people like you before. Some of course wont be interested until
you are free, but there are enough who can manage their time to make it worth while.
When to apply if youre doing a Masters

Now.
Apply early, apply often. Some employers are quite happy to be flexible about people studying
masters part time and although they are a minority, they are worth grabbing whilst you can. If
youre doing a full time then if you havent started sending out your CV, you should do it now.
You may be also able to wangle an internship. If youre reading this right at the start of the year,
then a good % of employers of headhunters will either ignore you or tell you to apply later. But,
at the risk of repeating ourselves, as long as the probabilities remain >=0 every time you try, you
increase your chances.
Because some masters programmes track undergraduate terms, your classmates (or competitors as
we like to call them), will all be hitting the market at the same time. They see the same adverts,
talk to the same headhunters, and use the same careers service, and will be going for the same set
of jobs and unless you are easily the smartest person in your year, thats a bad thing. You feeling
lucky punk ?
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What People Get Wrong
Why your boss is a jerk
If youre leaving your job, its of course likely to be because youve stopped enjoying the work,
or that your job doesnt offer you the opportunities you want. Money may well be a factor and as
HHs we dont have a problem hearing this. Money has many problems but at least it is relatively
simple as a motivation.
Sometimes however we hear from a candidate that it is because his current boss is a shambling
moron whose personality is an unstable mix of dishonesty and ignorance barely held together by
malicious greed. His management style draws upon both forms of Marxism, both Groucho and
Karl. He can recite The Art of War from memory and he frequently quotes from it at meetings
(in the original Chinese of course). You feel
you have to leave now or you and he will
Talking about your old job is a balance between
settle your disputes with knives. The IT at
showing
a willingness to move on for a better
your department looks like its run by EDS,
offer, and looking like a refuges from a financial
the management are in league with Al Qaeda,
disaster.
compliance has been infiltrated by Accenture
and Jack Bauer has told you that the back
office wants you dead. Today you found a live rat in your coffee.
Why he isnt
At P&D we like to hear the truth about how you see your current role and how its developing
and an honest summary of your reasons for leaving. That means its fine to share with us your
views on the personalities involved and how things could be better. This sort of information helps
us fit you to a new job rather more accurately. However, when you go forward to a bank, part of
your value is your experience at this firm, indeed the branding you get from working at your
current firm may have been a major factor in landing the interview.
Some managers like to see people who come from firms that they know and respect. Thats not
always the case of course. Dominic once hired a network manager away from a major
outsourcing firm on the grounds that anyone who could achieve anything there must be
remarkable. At the very least they usually wont hold your current firm against you. So if you
knock your current firm too much, you are to an extent, knocking yourself.
You may not even have a reason for leaving, and that is perfectly fine with us. What we care
about is interest in the new job, or at least an open mind to other career options. That applies at
interview, not just a chat over coffee with us. Someone who is happy where they are, but sounds
positive about a new job presents themselves far more successfully.
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Quantitative finance is like sex because
Jobs are not unlike relationships with the opposite sex and its stupid to start a first date by
enumerating at great length the defects and personal failings of your ex. They may indeed have
slept with your best friend, or applied on your behalf for a job at EDS, but leave that baggage
behind. We have experimental data to support this.
It is much better to talk of the positive reasons for leaving and your enthusiasm for the
opportunity that you are now looking at. To get a good job, you need to be able to show your
good work in some environment. You should think through the positive things about your current
job, even if thats hard. This is always good idea, even if your current boss is not a terrorist, just
so that you can think through in which ways (if any) that this new job matches what you really
want. You dont get to change jobs all that often, so you want to make the right decision. This
obviously goes beyond money, though that doesnt hurt. You should try to see what parts of the
new job you would particularly enjoy doing.
You may well be asked why you want this job
Make sure that the reasons you give for leaving
and although its a soft question, people often
your old job are not those which scare off the
manage to get it wrong.
people who will give you the next.
Another reason for not sounding too negative
about your current job is that if you seem too eager to jump ship, it undermines your negotiating
position.
Apply for the right job

You may feel you are unique individual and an obvious match for the job. Sadly, that turns out
not to be the case. If you are applying for a job called Henchman to Assistant Quants Minion P&D0701067, then do try to include that in your application, prominently. If you dont include
this, then you are critically dependant upon whoever opens your application guessing what job is
best for you. If any. Its entirely reasonable to apply for a job where you dont quite match
exactly what they are asking for. Many job specifications are a wish list rather than a set of
critical skills. It is possible to get hired because strength in one area overcomes weakness in
another. But make sure that this is a decision, not sloppiness. It doesnt come across well when
candidates who are selling themselves on being smart, have failed to understand the one or two
paragraphs of the advertisement.
Spam
When a web site asks, Shall I send this stuff to your friends? do not say yes. Dominic gets a
stream of emails via one candidate asking him to join some sort of SMS dating agency. The
candidate name is on each one. This does not make you friends.
However we have a presence on Facebook and LinkedIn to see if it adds value to the service we
provide.
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Focus
Forging a rapport with the interviewer is a good thing, but some interviews drift off topic as the
people involved chat. However, there is a time budget for each interview and most managers have
specific objectives in checking your ability. If they dont get covered it can hurt your progress to
the next stage. Although it is the interviewers responsibility to get things done, its your problem
if he doesnt. This is where the politeness we mention elsewhere is important. When you feel that
time is moving against you, ask to make sure that everything they need to know is covered. This
is a good thing to say in any case.
Asking questions
Actually, there are stupid questions. Bad questions are ones which embarrass the interviewer, or
force them into corners. Thats their job. Do not try to score points off the interviewer, either you
fail and look silly, or worse still, you succeed. Its a bad idea to bring up any screw-ups that the
bank has been involved in, or where the manager has to admit that he hasnt read your CV.
Buzzwords
Your interrogator will often come from a similar background to you, but even within maths and
physics there are many specialisations that are mutually incomprehensible. Youre just emerging
from a discipline where you think in terms of these names and equations and its easy to emit a
stream of noises that your interviewer can barely understand. Its actually worse if they are from a
similar background, since they may feel embarrassed to ask what you actually mean. Use of
obscure technical terms may be good for impressing your buddies at college, its not a great way
of getting a job. You can lose points here. But it is generally polite to enquire about the
background of your audience when asked to explain some part of your work. This both shows
consideration and prevents you making this error.
Learning
Your first interview will not be as good as your last. As you will read in the interview section
there are distinct interview skills. Thus your early interviews have less value than your later
ones and if you suspect that your face to face interaction is not 100%, you might as well go for
some interviews to gain confidence and make mistakes that matter less.
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Be polite
Your mother told you manners would be important one day, and this is the day. Please, Thank
you, and actually looking as if you are listening are good things. Fidgeting, playing with your
tie, or looking like youd rather be somewhere else is not polite. Standing when people come into
the room is good, preferably holding out your hand to be shaken. Occasionally you will find it
appropriate to disagree, this is good since it can show that youre thinking about what theyre
saying, but get in the habit of using phrases like Im not sure if thats the case, perhaps it is.
You cant just wake up one day and be polite on a whim. (Hint: Pretty Woman is fiction, we
know this for a fact.) Without practice, politeness may even come over as sarcasm. In some
languages Please and Thank you are implied in the context of the sentence and that habit can
spill over into English. Break that habit, break it now.
The Volatility Smile

Version 1.x didnt tell you to smile, thats why
You will spend more hours with the people you
we have upgraded to version 2.0. Smiling is
work with than who you sleep with. It is important
good on several levels. It softens the arrogance
in both cases that you get along.
that sometimes is felt when interviewing smart
people straight out of education. In conversation with hiring managers the word arrogant is
surprisingly common. Yes, you are smart else you would not have got this far, but you are in the
big boys game now, on a global scale. Merely being the smartest person you know, or getting
awards from your national government for extreme cleverness in no way makes you unique here;
a fact you may well not enjoy learning. Often when arguing over points in real subjects, the issue
is that one person (or both) have failed to understand a given point, there is no real legitimate
position that may be taken on either side. One is right, and the other doesnt grasp what is going
on. That is why most people in bars and dinner parties prefer arguing over soft subjects like
politics, where almost any position can be validly held. If you cant argue both sides you dont
understand the topic.
Smiling without eye contact, is bad, and as far as we are aware this is true in all cultures. It is
easily mistaken for arrogance, and looking away whilst smiling might be interpreted as some
communication with yourself where you and yourself are sharing some private joke at the
interviewers expense. That may be seen rude or mad, or probably both. So smile into peoples
eyes. That may sound like an over reaction to a minor personal quirk, and maybe it is. But that
appears to be a significant cause for this common criticism coming as feedback for candidates
who did not get a job is that they exhibit this arrogance. Confidence is good, the trick is to find
the right balance.
Practise sounding positive about things.
You can become better at presenting yourself as someone whos easy to work with. This is so
important because your team will spend more waking hours together than most married couples
and senior people want to know you will fit in. Like much of this whole process, its a game.
No one really cares if you have a deep respect for your fellow man, but if you can emulate it well
under pressure its a difference that makes no difference.
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Be true to yourself
You are selling yourself, so obviously you will be putting a positive spin on things. However, this
is a career, not a job. If you feel the job may really not be what you want, then its important that
you think that through. If in the interview you hear something that sounds bad, ask about it. This
does not have to be confrontational; you can use phrases like how does that work out in
practice? and what sort of flexibility is there to choose the work? when told youre going to be
counting buttons for the first six months.
Do not sound as if you work for Accenture

Even if you do currently work for Accenture or Arthur Anderson, you dont want to sound like
you do. Avoid the sort of management consultant pseudospeak that resembles Dilbert cartoons. A
common type of soft skills interview question is of the form: You find that X has gone terribly
wrong, what would you do about it. An Accenture style answer is: I would see it as a challenge
that would allow me to work as a good team
player, as part of the global strategy, being
You are a science graduate talking to other
careful to solicit input from business
science graduates, even if their focus has moved
stakeholders; or perhaps you might respond:
from expanding human knowledge to expanding
their wallets.
I will grasp the opportunity to show excellent
leadership in integrity which is interview
suicide. Or to quote one person: I love pressure, thats why I want to work for a bank Sounds
good, but at some level, also slightly worrying.
This warning may sound quite silly, but there is a growing trend for some universities to have
formal coaching in interview technique. In theory this should be very useful. In theory. In practice
is comes across as rather scary. It frustrates interviewers a lot to be faced with an obviously bright
candidate who parrots clichs that some consultant has fed into him. We say at the beginning that
you need to stand out and given that the people you are competing with may well include people
from your current institution, it does you very little good. By all means listen to these people, but
take it with a pinch of salt. When you know little about the process, its easy to give too much
weight to the few things you get told.
We also ought to include something that nearly contradicts everything else we say on this subject.
Dont be too self conscious. Many of us have had recordings made of presentations on subjects
were supposed to be experts in and given a professional lecture. Which we do, usually.
Except, of course, no one can talk for hours without sentences that make no sense or lack verbs,
or saying something thats so flatly wrong, youd swear you never said it. Dont sweat about this.
Interview overlap
It is tempting to schedule lots of interviews as close together as possible, because travel does eat
into your budget. You should be very conservative about the amount of time you allow for each
interview. Its not easy to get a manager to speed up his process because you want to get across
town to talk to one of his competitors. The worry about time, just like lateness, can reduce your
effectiveness, so make sure this doesnt come up.
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Odd questions
You will be asked some rather strange questions, not just brainteasers. They include Can you
work in a team?, Do you want to work in a bank?, What motivates you?, What sort of team
do you want to work in? and variants on impossible questions like As you dont know what we
do precisely, what difference is there between this kind of work and some other job you know
nothing about?
You may think this is because the interviewer cant think of anything intelligent or useful to say,
and frankly this is sometimes true, but you cannot know that for certain, and you must not assume
it.
Treat them as serious questions and although some like Do you want to work here? have
obvious answers, you do best by thinking about them, preferably in advance. You should be able
to articulate something that makes you want to do this job for this business in this bank. You
should have views on teams. For instance, now that you arent competing with me for jobs I can
share with you that when asked about the ideal team size for me, I have said For me, what is
important is the quality of the team, rather than its size. Which has the virtues of not cutting
yourself off from whatever size of team you might join (by not actually meaning anything) and
also sounding positive and upbeat.
A bad answer is I like small teams because you dont really know what strangers are thinking.
Even the largest banks are typically a large number of smallish, 5-20 person groups, thats
basically because we evolved to work best that way.
Vague questions are an opportunity for you to slip into the conversation plugs for skills or
experience that have not yet been covered. Some managers ask them for just this purpose.
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Who will interview you

You will be interviewed by several people for any given job. They will have different levels of
seniority and different areas of specialization. It comes as a surprise to some people that firms
such as Goldman Sachs want you to meet anything from five to twelve managers and members of
your new team. Other firms prefer to get it over with in one day.
Quant prejudices
There are many types of quant and we dont just mean that they work in different product areas.
Very often there can be a great deal of technology transfer from one product area to another. For
example, the quant skills needed for credit and for interest rates have a wide overlap. No, we
mean that quants come from different mathematical backgrounds and it is this rather than product
area that will dictate the nature of a technical interview. Quants come in two varieties: the pure
mathematician and the applied mathematician.
The pure mathematician quant

This quant will have studied finance as a branch of probability theory, often quite abstract
probability theory. Their degree will probably be in either finance or mathematics from a
probability theory department. In their interview they will talk about martingales and change of
measure, Girsanov and numeraires. Ninety-nine times out of a hundred the punchline of the
probabilistic approach is the simple concept that the value of a financial contract, such as an
option, no matter how complex is the expected present value of all cashflows. The expectation
comes in because cashflows will vary depending on how the underlying instrument behaves and
the present value appears because cashflows will be in the future and we are valuing the option
today. The catch in this is that the expectation must be with respect to the risk-neutral random
walk of all underlying random variables, not the real random walk.
Many problems in finance can be addressed by either the pure or the applied mathematician.
However, because many interest rate models are constructed from a simulation point of view they
are easier to deal with by the probabilistic approach. These models are known as the Heath,
Jarrow & Morton (HJM) and Brace, Gatarek & Musiela (BGM) models. When it comes to
number crunching and writing code, which is invariably what you will be doing, you will find
yourself writing a lot of Monte Carlo simulation code. At a basic level, Monte Carlo code is easy
to write. There are really just the two problems with it, making it fast (including finding the
Greeks) and using it for contracts with early exercise.
Key areas to brush up on

You ought to be able to understand and be able to discuss knowledgeably the following.
Risk neutral versus real
Change of numeraire
Martingales
Monte Carlo methods
Techniques for speeding up Monte Carlo
Monte Carlo methods for contracts with early exercise
The last two are popular areas of research, so have a few recent articles at your fingertips.
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The applied mathematician quant
The applied mathematician may have studied anything but finance. They will have degrees in
physics, electrical engineering, chemistry and some field of applied mathematics such as fluid
mechanics. They will talk about calculus and partial differential equations. To applied
mathematicians the problem of pricing a contract is about finding a differential equation which
must then be crunched numerically. The differential equation will almost certainly be of parabolic
type, also known as the heat or diffusion equation. This equation also has the same interpretation
as giving the expectation of the present values of cashflows but this is seldom mentioned.
Applied mathematicians cant easily write certain interest rate models in the partial differential
equation framework. However, they have other counter-balancing advantages over the
probabilist. Using the tools of calculus they can derive models with fewer assumptions than the
probabilists, they can incorporate transaction costs, optimality, nonlinearity and other fun stuff
into their models. Number crunching to the
applied mathematician can mean either Monte
The market can stay irrational, longer than you
Carlo again, or finite difference methods.
can remain solvent.
Finite-difference methods are sophisticated
versions of the binomial method. No, strike
that, it would be better to say that the binomial method is a prehistoric version of a finitedifference method.
Key areas to brush up on
Diffusion equations generally
Finite difference methods
Finite difference methods in several dimensions
The different types of finite-difference method: Explicit, implicit, etc.
You ought to have coded up some of these in C++ or at least VB or Matlab, otherwise you wont
sound at all convincing in the interview.
Final trick
Often you will know the name of the person interviewing you. If you do a simple search on
Google or wilmott.com may give you information about the style of the person, their interests,
perhaps even weaknesses in their own knowledge.
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HR Interview
Typically the HR interview is the last one before they offer you the job and after everyone else
has signed off that they want you. Although it is not very common for candidates to blow it at this
point, you really dont want to fall down at the last fence. HR are typically the only people
involved in the hiring process with any real formal training in staff selection. Thus although they
are not in a position to evaluate your maths or programming skills they are still responsible for
trying to make sure that the bank is not hiring a dud. From the forums we get the impression that
many people see HR interviews as a complete waste of time, and yes, many are. They are filters
and sanity checks and in theory they shouldnt be necessary.
Except when they catch a dud that everyone else has missed.
At that point people appreciate that HR
interviews are not a complete waste of time.
You should make very sure that all the date on
HR are usually the people who understand the
your
CV make sense, and if they do not join up be
internal bureaucracy best, so gather together
able
to
explain why.
all your issues about interview expenses, start
dates and when precisely you will get your
first pay cheque for this meeting. They are the only people who can tell you the truth about the
pay and benefits. All sorts of people will in good faith tell you about these. But if you think that
because a bank pays 600K a year to your new boss to understand complex financial issues that he
might stand some chance of getting these things right, you are sadly being a little optimistic.
Headhunters try, but we know from experience that this second hand information is not of the
best quality.
However it is best to leave your give me money and time off questions until the part where they
ask you for your questions. In many cases, they will go through this without being asked because
better HRs use this phase to convince you of the wisdom of choosing their firm.
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Audit
Many HRs see their role in these interviews to be catching these duds and thus although the
questions they ask may be extravagantly banal, they are in fact checking that you are what you
say you are. Since they have so little objective data to work on, they seize upon any perceived
defects and give them a good hard shake. Back when he had a real job bossing people around,
Dominic once interviewed someone who not only could not remember why they had chosen
particular options on their degree course; they actually struggled to remember half of their names.
This would have been a mildly bad thing if it had been ten years after, but this candidate was
between finishing their course, and formally graduating.
They didnt get the job.
HRs often pick up on errors in your CVs like mismatched dates and are trained not to like gaps at
all. If the dates do not join up, be prepared to explain why. Part of the background check that
most banks perform involves checks on employment dates. Some peoples dates are rather
confusing, for instance you may have studied at two places during the same period, and worked
during vacations as well as internships. Thats fine, but worth telling P&D about it so that we can
set the right expectation. The short version is that you can get away with a lot more that you state
up front than if you are found out.
HR will ask about how you made various choices in your life. Lets be honest here, we all have
choices that were in reality some combination of bad judgment, ignorance, showing off and
improvements to the chances of meeting people of a compatible sex. They know this as well, but
they are also checking that you are capable of expressing yourself, as well as trying to guess how
you make important decisions.
The better type of HR people see their role of supporting the business decision to take you on by a
combination of checking you out and selling the bank to you. They actively want you to take the
job, and you should make sure you get their contact details because sometimes they are in the best
position to kick the process into moving when it jams.
Give examples
A common theme in the way many people in HR approach the intangible issues is the notion of
finding examples of the trait in question through your experience. Thus when you are asked
whether you are happy working in teams, the wrong answer is yes (although it is obviously
better than no). Most often they are looking for examples of when you worked well in a team
and what you gained from it, or whether youre not really that good at teamwork. There are a lot
of questions on this theme and yes, they do include, Why do you want to work for us? People
sometimes get that wrong. Yes, really.
You should prepare yourself for the most obvious questions, since both HR and line management
may ask them.
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And then we hid the drugs under our mothers bed
Even major governments find it hard to work out whether people they take on should be trusted;
and thats with quite intrusive checks on your life and people you are associated with. Thus you
should feel some sympathy for the HR who has the job of working out whether you should be
trusted with millions based upon a ten minute segment of an interview. But that sympathy should
be tempered with your resolution not to dig a hole for yourself. As above they may well ask for
some example where you were found yourself having to make a difficult ethical choice, or how
you dealt with a situation where some wrongdoing happened around you. They may ask follow
up questions just to check that you are a normal law abiding citizen.
However, it may be a good idea to review your life and think of a good example. What you really
do not want to happen is to find it hard to think of such a case, then remember something and start
a story about the errant behaviour of your little brother and how you had to keep him out of
trouble. Thats fine, but think the anecdote
through, because it may just end with the way
Everything you say about yourself in your CV at
you solved the problem paints you as an
interview should be provable from either
incompetent drugs dealer. For obvious reasons
education you have received or better from
of personal confidentiality the drugs idea is
experience in real life that supports your claim.
radically changed from what someone actually
said, but is loosely based upon what happened.
The HR manager is handing you rope by letting you talk about your life. Do not tie a noose in it
and stick your head through.
Some HRs have been taught the technique of aggressive silence. Most people from Western
cultures find long gaps in conversations embarrassing, and so will fill them in, often without
thinking too hard about the content. If you start along an interesting track, and the HR goes
quiet, smiles in a polite way, and keeps on being silent, you know that they are interested to see
what will crawl out from your past.
One candidate when asked about a test result that seemed well below their ability replied that they
had been to a really good party the night before and had been in no fit state to take the exam.
They didnt get the job.
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Background Checks
Nearly all banks do at least some sort of basic background check. This includes trying to make
sense of your transcripts, references from previous employers and looking for unexplained gaps
in your employment history. You may gain a little personal satisfaction from your progress in life,
when your ex-boss at some grim fast food joint you worked one summer finds out that a really
big bank is hiring you for such an important position that they contact him to check out your past.
These investigations include a credit check. There are several reasons for this. The first is that the
bank may simply not be allowed to hire people who are bankrupt, or have certain types of court
judgment against them. It also serves as an extra confirmation that you are who you say you are
and that your life bears some resemblance to the one on your CV.
The final reason is that its cheap. For a tiny amount of money one can get more raw information
quite legally about a person from the credit
agencies than a 300 per day private detective
It is very rare for entry level candidates to lose
can get in a few weeks.
out on their desired job because of some minor
debt whilst a student. If in doubt get both your
At this point a certain number of you will be
headhunter and human resource specialist on
worrying that the rather stochastic view you
your side before the credit check comes back.
took to paying your credit card is going to
come back to bite you.
Not yet.
It turns out to be the case that HR people usually know a lot about student finances, most of them
are graduates and many have a Masters degree and thus have a relatively relaxed filter on low
level student cashflow problems. So a few misplaced bills or arguments with landlords or phone
companies rarely disturb them very much. That is unless the amounts are so large that they imply
either substance abuse or an unacceptably flagrant contempt for money. Credit checks will of
course flag up potential fraud and it should come as no shock to you that banks really dont like
dishonesty at all.
AT P&D weve helped any number of people get past this, and weve yet to see a case where debt
stopped someone getting the job they wanted. So again this is a case where telling the truth up
front is usually the best way forward. By bringing it up you present yourself as honest, and you
can put a good spin on it. This is better than the cold impersonal view that a credit report will
have of your unpaid bills.
For the avoidance of doubt, unless you come from a country that is currently at war, the odds are
that the bank can get some sort of credit check on you. It costs a bit more, but the global economy
has several large firms who exist to do this.
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The Different Types of Mathematics Seen in Finance

The real-world subject of quantitative finance uses tools from many branches of mathematics.
And financial modeling can be approached in a variety of different ways. For some strange reason
the advocates of different branches of mathematics get quite emotional when discussing the
merits and demerits of their methodologies and those of their opponents. Is this a territorial
thing, what are the pros and cons of martingales and differential equations, what is all this fuss
and will it end in tears before bedtime?
Financial modeling
Heres a list of the various common approaches to modelling and a selection of useful tools. The
distinction between a modelling approach and a tool will start to become clear.
Modeling approaches
Probabilistic
Deterministic
Discrete: difference equations
Continuous: differential equations
Useful tools
Simulations
Approximations
Asymptotic analysis
Series solutions
Discretization methods
Greens functions
While these are not exactly arbitrary lists, they are certainly open to some criticism or addition.
Lets first take a look at the modelling approaches.
Probabilistic
One of the main assumptions about the financial markets, at least as far as quantitative finance
goes, is that asset prices are random. We tend to think of describing financial variables as
following some random path, with parameters describing the growth of the asset and its degree of
randomness. We effectively model the asset path via a specified rate of growth, on average and its
deviation from that average. This approach to modelling has had the greatest impact over the last
30 years, leading to the explosive growth of the derivatives markets.
Deterministic
The idea behind this approach is that our model will tell us everything about the future. Given
enough data and a big enough brain, we can write down some equations or an algorithm for
predicting the future. Interestingly, the subject of dynamical systems and chaos falls into this
category. And, as you know, chaotic systems show such sensitivity to initial conditions that
predictability is in practice impossible. This is the butterfly effect, that a butterfly flapping its
wings in Brazil will cause rainfall over Manchester. A topic popular in the early 1990s, this has
not lived up to its promises in the financial world.
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Discrete/Continuous
Whether probabilistic or deterministic the eventual model you write down can be discrete or
continuous. Discrete means that asset prices and/or time can only be incremented in finite chunks,
whether a dollar or a cent, a year or a day. Continuous means that no such lower increment exists.
For reasons that weve never understood, the mathematics of continuous processes is often easier
than that of discrete ones. But then when it comes to number crunching you have to anyway turn
a continuous model into a discrete one. In discrete models we end up with difference equations.
An example of this is the binomial model for asset pricing. Time progresses in finite amounts, the
time step. In continuous models we end up with differential equations. The equivalent of the
binomial model in discrete space is the Black-Scholes model, which has continuous asset price
and continuous time. Whether binomial or Black-Scholes both of these models come from the
probabilistic assumptions about the financial world.
Simulations
If the financial world is random then we can experiment with the future by running simulations.
For example, an asset price may be represented by its average growth and its risk, so lets
simulate what could happen in the future to this random asset. If we were to take such an
approach we would want to run many, many simulations. Thered be little point in running just
the one; wed like to see a range of possible future scenarios. Simulations can also be used for
non-probabilistic problems. Just because of the similarities between mathematical equations a
model derived in a deterministic framework may have a probabilistic interpretation.
Discretization methods
The complement to simulation methods, there are many types of these. The best known of these
are the finite-difference methods which are discretizations of continuous models such as BlackScholes. Depending on the problem you are solving and unless its very simple, you will probably
go down the simulation or finite-difference routes for your number crunching.
Approximations
In modeling we aim to come up with a solution representing something meaningful and useful,
such as an option price. Unless the model is really simple, we may not be able to solve it easily.
This is where approximations come in. A complicated model may have approximate solutions.
And these approximate solutions might be good enough for our purposes.
Asymptotic analysis
This is an incredibly useful technique, used in most branches of applicable mathematics, but
almost unknown in finance. The idea is simple; find approximate solutions to a complicated
problem by exploiting parameters or variables that are either large or small, or special in some
way. For example, there are simple approximations for vanilla option values close to expiry.
Greens functions
This is a very special technique that only works in certain situations. The idea is that solutions to
some difficult problems can be built up from solutions to special solutions of a similar problem.
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Volatility
Classically, volatility plays many roles in finance.
For the holder of an equity, for example, more volatility is bad since it is closely associated with
risk. However, for the holder of an option, it can be good, the value of simple options increase as
volatility increases.
Unfortunately, volatility of a stock or an interest rate is impossible to measure at an instant in
time. Yet we need to know its value, and forecast it over the future, in order to value options. This
leads to people talking about (and muddling up) all sorts of different types of volatility. If you can
distinguish between these volatilities while all around you are confusing them then youll be a
quant, my son.
Actual volatility means the amount of noise in the underlying. You cant measure it accurately.
But youd really like to know what its going to be so you can price derivatives.
Realized or historical volatility is a backward-looking statistical measure of what volatility was in
the past, but depends on the statistical technique you use.
You might use historical, statistical measures of what happened in the past in order to forecast
future volatility. If you are in the business of vol arb you will need such forecasts in order to
make trading decisions in which case you may live or die according to the accuracy of such
forecasts.
Implied volatility is what quants talk about a lot, of some of them confuse it with actual volatility.
Implied vol means the volatility put into a Black-Scholes formula in order to match a theoretical
model price with a price seen in the market. Its sort of what the market thinks is likely to be
volatility in the future. (Although when speaking to a trader you should say that implied volatility
is simply where supply meets demand. This isnt sort of correct, this is exactly correct. Here
we have an example of using different language depending on your audience.)
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Time Series Analysis
This is the evil twin of modelling, where instead of trying to apply a model to a system, based
upon what you think is happening you are examining a very noisy data set to try and find patterns,
or to extract some quantity like volatility.
We find that as well as the econometrics skills of ARIMA, Fourier, de-lagging, spectrum
analysis, principal component analysis, and the variants on GARCH that signal processing skills
from electronic engineering are in increasing demand, so if you are pushing this aspect of your
skill set, we would advise you to bone up on Kalman and particle filters.
You should be wise in the ways of not only finding the various parameters of a mean reverting
model, but how to detect regime change.
There is even a healthy market for Quant C++ developers who understand how to work with very
large, high frequency data sets, and no, this does not mean Oracle SQL.
Often there is no notion of a real physical system at all, merely a result that says x correlates
with y, or a rather heuristic algorithm for getting the right sort of value.
Another aspect of the work is simply cleaning up the data that hits your system, and this varies
from highly automated real time processes through quite literally looking at the graph and
thinking about it, though of course that extreme isnt usually given over to quants to work on.
Market data is so noisy that classical models like Black Scholes can usefully treat it as completely
random. The noise
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Reading List
Background
Derman, E 2004 My Life As A Quant. John Wiley & Sons
http://books.globalinvestor.com/books/19770.htm?ginPtrCode=10202&identifier=18932b1e1d2bc6d5a1ae69160e8d
a035
Poundstone, W 2005 Fortunes Formula. Hill & Wang
a035
Taleb, NN 2001 Fooled by Randomness. Random House
a035
Brown A 2006 The Poker Face of Wall Street. John Wiley & Sons
a035
Taleb, NN 2007 The Black Swan. Penguin
http://books.global-investor.com/books/168555.htm?ginPtrCode=10202
To get a feel for the recent history of quantitative finance and the working environment for a
quant see Emanuel Dermans autobiography. This is a very personal account of his own career
from physicist to Wall Street quant. However, it doesnt really convey the role played by
programming in a typical quants life, since Dr Derman is far from being a typical quant.
Bill Poundstone writes about some simple money-management ideas well known to all gamblers
yet under-appreciated by risk managers. To back up his case he describes the Long Term Capital
Management fallout and the role played by leverage. This book will give you plenty of nuggets to
drop casually into an interview to show that crucial market insight and how to relate markets and
mathematics in a very pragmatic way.
You will either love or loathe Nassim Talebs non-technical book on the part played by risk in our
lives, not just finance. It is compulsory reading. But whether you love it or loathe it dont let on to
your interviewer until you know their feelings towards it. Again, a lot of useful interview
material, but unfortunately nothing mathematical.
Again, a lot of useful interview material, but unfortunately nothing mathematical. The same goes
for the even more opinionated The Black Swan. This book was on the New York Times best-seller
list for aeons. Your interviewer will have read it, and have strong opinions about it. Be prepared
to agree or disagree (both vehemently), but make sure your reasoning is sound not just based on
emotions.
Dont expect too much detail about either poker or Wall Street in Aaron Browns book.
Nevertheless it is highly informative, youll get a lot out of this on the non-technical side of quant
finance and, importantly, introduce you to ways of thinking that will help you to lose not too
much money.
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Introductory
Haug, EG 2007 The Complete Guide to Option Pricing Formulas 2nd edition. McGraw-Hill
http://books.globalinvestor.com/books/66956.htm?ginPtrCode=10202&identifier=80d939a1914d743ad6d46738510
85ba8
Hull, J 2005 Options, Futures and Other Derivative Securities. Prentice Hall
http://books.globalinvestor.com/books/9233.htm?ginPtrCode=10202&identifier=18932b1e1d2bc6d5a1ae69160e8da
035
Paul Wilmott Introduces Quant Finance Second Edition
http://books.globalinvestor.com/books/168530.htm?ginPtrCode=10202&identifier=a89ab6672523e235bd844e19210
a4358
Espen Haugs book concentrates on presenting pragmatic results for the practitioner without
going into all of the modeling details. This book finds a nice balance between theory and practice.
Do you want the perfect model that is impractical because it takes too long to find an answer? No.
Do you want a model that is quick but gives useless results? No. A chain is only as strong as its
weakest link and this book focuses on models where all the links are similar in strength. Very
practical. It is now in its second and greatly expanded edition.
Paul Wilmotts book is of course famous, partly for its more practical approach to quant finance
and relatively relaxed writing style, presumably if youve reached this point you already have a
copy, if you dont then you should get one. According to the Financial Times, Paul is a cult
derivatives lecturer. There is a now a considerably extended and revised second edition.
Knowing Hull is compulsory. Everyone has read it. Unfortunately that means that to some extent
that knowledge will have been discounted by interviewers. The book is great for definitions of
things financial and mathematical. However, if you have only read Hull you will have a strange,
fragmentary understanding of quantitative finance because of the picknmix nature of the
contents and because there is no common theme holding the book together. There is also too
much on the binomial model. Although this is great for teaching it isnt great for hardcore,
practical quanting. If you think that you can get a job after merely reading Hull you are in for a
big shock.
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Advanced/research level
Jaeckel, P 2002 Monte Carlo Methods in Finance. John Wiley & Sons
a035
Peter Jaeckel goes into the details of Monte Carlo methods. It can be quite heavy going at times,
but for interview purposes you wont need to have understood everything in this book. As long as
you can show an appreciation of random number generation methods, how to speed up Monte
Carlo and using Monte Carlo for pricing American options then you should be fine.
Glasserman, P 2003 Monte Carlo Methods in Financial Engineering. Springer-Verlag

http://books.global-investor.com/books/16497.htm?ginPtrCode=10202
Paul Glasserman also writes in an accessible manner on the topic of Monte Carlo. He begins by
covering the basic, then moves on to advanced techniques, e.g. for speeding up the technique, and
then moves on to specific financial problems. Yes, the book is yellow,usually a bad sign of a
simple subject made complicated, but dont let this put you off.
Morton, KW & Mayers, DF 1994 Numerical Solution of Partial Differential Equations.
Cambridge
a035
The other main numerical methods you will need to understand are the finite-difference methods.
There are books on finite differences in finance (such as Tavella & Randall) but for extra kudos
you would be better off reading one of the classics such as that by Morton & Mayers. It has no
reference to finance whatsoever, but explains beautifully the numerical solution of various partial
differential equations.
Neftci, S 2004 Principles of Financial Engineering. Academic Press
http://books.globalinvestor.com/books/17107.htm?ginPtrCode=10202&identifier=9984462dc967c88392532199278
5d117
Salih Neftcis book explains the probabilistic side of quantitative finance modeling. Although this
subject can be a bit daunting because it appears so abstract, Neftci does a fantastic job of making
the topic intuitive.
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Schonbucher, PJ 2003 Credit Derivatives Pricing Models. John Wiley & Sons
a035
Philipp Schonbucher is another challenging read. Entirely on the subject of credit risk modeling,
if you are able to understand (and more importantly, show that you understand) just 25% of this
book then you will go far, my son.
Taleb, NN 1997 Dynamic Hedging. John Wiley & Sons
http://books.globalinvestor.com/books/3768.htm?ginPtrCode=10202&identifier=18932b1e1d2bc6d5a1ae69160e8da
035
Nassim Talebs technical book (as opposed to his popular science books mentioned earlier)
combines theory and practice very successfully. This is another book that will give you useful
gems for your interview.
Wilmott, P 2006 Paul Wilmott On Quantitative Finance, second edition. John Wiley & Sons
a035
Paul Wilmotts three-volume opus is from the other side of the tracks from Salih Neftci, it shows
how the applied mathematician thinks of quantitative finance. The book starts at the standard
level of explaining Black-Scholes, moving on to discussing modern quant models as used in
practice, ending up with some ideas from the cutting-edge of research. One important point about
this book, which distinguishes it from others, is that it does criticize many of the models
commonly used by practitioners. Again, you will find many modeling insights and bon mots in
this book that will be useful during your interview ordeals.
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What you must know

The following is not an exhaustive list and is only the general broad brush strokes, but it will
ensure that you dont make an idiot of yourself by having major gaps in your knowledge.
Products
Fixed income, bonds, swaps
Equity, dividends, derivatives
Currencies, role of foreign and domestic interest rates
Commodities, convenience yield etc.
Exotics, main types,
Credit derivatives
Concepts
Risk, return and efficient frontiers
Delta hedging
Risk neutrality
The no-arbitrage argument
Market price of risk for non-traded quantities
Calibration
Static hedging using exchange-traded vanillas
Models
Binomial model
Lognormal
Jump diffusion
Stochastic volatility
Interest rate model (single, multi factor, HJM, BGM)
Credit models (hazard rate, structural)
Transition matrices
Numerical methods
Monte Carlo simulation techniques
Binomial scheme
Finite-difference methods
Numerical quadrature
Which method to use for which type of contract
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What you must have coded up

Key areas
You must be comfortable with the four main numerical methods used for pricing derivatives:
Binomial/trees
Monte Carlo
Numerical integration
Although the first of these (binomial and trees) are rather inefficient they still have their
proponents and you should show willingness to lower yourself to this level. We know of a world
class numerical analyst working in computational fluid mechanics who left his academic job for
the bright lights and ended up coding the binomial model. A certain amount of pride-swallowing
was necessary in the short term, but his recent progress has certainly made it worthwhile.
Aim to code up as many different types of exotic contract as possible, in as many markets as
possible (essentially the lognormal markets of equity, FX, etc. and fixed income and credit).
When pricing an exotic such as an equity Asian option you should use both Monte Carlo and
finite difference. The two methods are completely different but the exercise will give you
invaluable experience and plenty to talk about in your interview.
(The next few sections are taken from Paul Wilmott On Quantitative Finance, second edition,
2006, John Wiley & Sons.)
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Finite-difference methods are designed for finding numerical solutions of differential equations.
Since we work with a mesh we find the contract value at all points in stock price-time space. In
quantitative finance that differential equation is almost always of diffusion or parabolic type. The
only real differences between the partial differential equations are the following:
Number of dimensions
Functional form of coefficients
Boundary/final conditions
Decision features
Is the contract an option on a single underlying or many? Is there any strong path dependence in
the payoff? Answers to these questions will determine the number of dimensions in the problem.
At the very least we will have two dimensions: stock price and time, for example. Finite
difference methods cope extremely well with a smaller number of dimensions, up to four, say.
Above that they get rather time consuming.

The main difference between an equity option problem and a single-factor interest rate option
problem is in the functional form of the drift rate and the volatility. These appear in the governing
partial differential equations as coefficients. The standard model for equities is the lognormal
model, but there are many more standard models in fixed income. Does this matter? No, not if
you are solving the equations numerically, only if you are trying to find a closed-form solution in
which case the simpler the coefficients the more likely you are to find a closed-form solution.
In a numerical scheme the difference between a call and a put is in the final condition. You tell
the finite-difference scheme how to start. And in finite-difference schemes in finance we start,
strangely, at expiration and work towards the present. Boundary conditions are where we tell the
scheme about things like knock-out barriers. When we write our code wed like it to be as general
and reusable as possible. That means writing it so that it doesnt have to be changed too much in
going from one contract or model to another. So we might put things like final conditions in some
external function, to be changed easily.
Decision features
Early exercise, instalment premiums, chooser features, are all examples of embedded decisions
seen in exotic contracts. Coping with these numerically is quite straightforward using finite
difference methods, making these numerical techniques the natural ones for such contracts. The
difference between a European and an American option is about three lines of code in a finite
difference program and less than a minutes work.
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Program of study for finite-difference methods

If you are new to finite-difference methods and you really want to study them then you need a
program of study.
Explicit method/European calls, puts and binaries

To get started you should learn the explicit method as applied to the Black-Scholes equation for a
European option. This is very easy to program and you wont make many mistakes.
Explicit method/American calls, puts and binaries

Not much harder is the application of the explicit method to American options.
Crank-Nicolson/European calls, puts and binaries

Once youve got the explicit method under your belt you should learn the Crank-Nicolson
implicit method. This is harder to program, but you will get a better accuracy.
Crank-Nicolson/American calls, puts and binaries

Theres not much more effort involved in pricing American-style options than in the pricing of
European-style options.
Explicit method/path-dependent options

By now you'll be quite sophisticated and its time to price a path-dependent contract. Start with an
Asian option with discrete sampling and then try a continuously-sampled Asian.
Finally, try your hand at lookbacks.
Interest rate products

Repeat the above program for non-path-dependent and then path-dependent interest rate
products. First price caps and floors and then go on to the index amortizing rate swap.
Two-factor explicit
To get started on two-factor problems price a convertible bond using an explicit method,
with both the stock and the spot interest rate being stochastic.
Two-factor implicit
The final stage is to implement the implicit two-factor method as applied to the convertible bond.
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Monte Carlo methods

Monte Carlo methods simulate the random behaviour underlying the financial models. So, in a
sense they get right to the heart of the problem. Always remember, though, that when pricing you
must simulate the risk-neutral random walk(s), the value of a contract is then the expected present
value of all cashflows. When implementing a Monte Carlo method look out for the following:
Decision features
again!
A common interview question is to ask the pros and cons of MC vs FD. This should be an easy
point to score.
For each random factor you will have to simulate a time series. It will obviously take longer to do
this, but the time will only proportional to number of factors, which isnt so bad. This makes
Monte Carlo methods ideal for higher dimensions when the finite-difference methods start to
crawl.
As with the finite-difference methods it doesnt matter too much what the drift and volatility
functions are in practice, since you wont be looking for closed-form solutions.
These play a very similar role as in finite differences. The final condition is the payoff function
and the boundary conditions are where we implement trigger levels etc.
Decision features
When you have a contract with embedded decisions the Monte Carlo method becomes
cumbersome. This is easily the main drawback for simulation methods. When we use the Monte
Carlo method we are only finding the option value at todays stock price and time. But to
correctly price an American option, say, we need to know what the option value would be at
every point in stock price-time space. We dont typically find this as part of the Monte Carlo
solution.
Improvements to basic MC
It is worth revising antithetic sampling, variance reduction, importance sampling and Sobol &
Quasi Monte Carlo methods. A good point to reach is where you can describe the effect on
apparent Greeks by calculating prices by MC and what you can do to make this less bad. A key
advantage of MC is that it is so simple to distribute the work across multiple CPUs that even
Accenture consultants can do it (eventually). Thus even though some methods like finite
difference methods can be more efficient, they are harder to make spread the load.
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Program of study for the Monte Carlo path-simulation methods
European calls, puts and binaries on a single equity

Simulate a single stock path, the payoff for an option, or even a portfolio of options, calculate the
expected payoff and present value to price the contract.
Path-dependent option on a single equity
Price a barrier, Asian, lookback etc.
Options on many stocks
Price a multi-asset contract by simulating correlated random walks. Youll see how time taken
varies with number of dimensions.
Interest rate derivatives, spot rate model
This is not that much harder than equities. Just remember to present value along each realized
path of rates before taking the expectation across all paths.
HJM model
Slightly more ambitious is the HJM interest rate model. Use a single factor, then two factors etc.
BGM model
A discrete version of HJM.
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Numerical integration
Occasionally one can write down the solution of an option-pricing problem in the form of a
multiple integral. This is because you can interpret the option value as an expectation of a payoff
and an expectation of the payoff is mathematically just the integral of the product of that payoff
function and a probability density function. This is only possible in special cases. The option has
to be European, the underlying stochastic differential equation must be explicitly integrable (so
the lognormal random walk is perfect for this) and the payoff shouldnt usually be path
dependent.
So if this is possible then pricing is easy you have a formula. The only difficulty comes in
turning this formula into a number. And thats the subject of numerical integration or quadrature.
Look out for the following.
Can you write down the value of an option as an integral?
Thats it in a nutshell.
Program of study for numerical quadrature

Here is a program of study for the numerical quadrature methods.
European calls, puts and binaries on a single equity using Normal numbers:
Very simple. You will be evaluating a single integral.
European calls, puts and binaries on several underlying lognormal equities, using Normal
numbers
Very simple again. You will be evaluating a multiple integral.
Arbitrary European, non-path-dependent payoff, on several underlying lognormal equities,
using Normal numbers:
Youll only have to change a single function.
Arbitrary European, non-path-dependent payoff, on several underlying lognormal equities,
using low-discrepancy numbers:
Just change the source of the random numbers in the previous code.
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Summary of Numerical Methods

The following table summarizes when the various methods excel and where they fall flat.
Subject
Finite difference
Monte Carlo
Quadrature
Low dimensions
Good
Inefficient
Good
High dimensions
Slow
Excellent
Good
Path dependent
Depends
Excellent
Not good
Greeks
Excellent
Not good
Excellent
Portfolio
Inefficient
Very good
Very good
Decisions
Excellent
Poor
V. poor
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Programming skills
This is central to the notion of doing things. As a Quant, you will be writing code, it will be a
significant part of your work. That is the way it is. Before you consider a career in quant finance,
you need to be brutally honest with yourself on how you view dealing with computers. The
standard figure across the industry is 60% of your working hours, and hopefully you understand
statistics enough to work out that it follows that you will often be spending more than 60% of
your time fighting computers, and some weeks will have no other work at all. We emphasise this
because some new entrants to the market have somehow that programming is something they can
avoid, or even worse, that it is somehow beneath them. Frankly that is rather like the view of
physics you get in the media where no maths are involved. Some people really do seem to come
to this line of work with a model that is like the one you might have of space travel you get from
Star Trek. No zero g toilets for a start. Yes, people do think great deep abstract thoughts, but you
can no more be a quant who doesnt program
than a physicist who doesnt do calculus. Both
It is as hard to be a successful quant who doesnt
animals exist of course, but they are rare, and
do programming as a physicist who doesnt do
most attempts to pull this trick off lead to
calculus.
misery, unemployment or both.
This is made worse by some of the various Masters in Finance programmes which either dont
teach programming at all, or fail to allocate enough time to it. Overwhelmingly the skill that
employers tell us is lacking in newbies is programming. Sadly there is no quick fix. The
Certificate in Quantitative Finance places a great emphasis on practical techniques, numerical
methods and programming and has become something of a market standard for this reason, and
now has a substantial C++ component. But no course, no matter how good will make you a
programmer. Dominic may spend quite literally days explaining how to beat C++ into
submission, but in the final analysis, Dominic teaching you about C++ is like Sharon Stone doing
your sex education at school. Its the practical that matters. However you come to learn about
programming you have to write code with your own bare hands, everything else is like watching
cheap 1970s porn on a tiny iPod screen. No one is going to pay you to do either of them based
upon that level of expertise.
It is very easy to spot people who havent written much code, and although often they get a job,
they frequently miss out on the job they really want.
The programming ability of quants varies
enormously, but since a large percentage of
Expect that 60% of your working life will be spent
your time will be spent fighting computers,
fighting computers. If you cant take that, quit now.
showing aptitude is frequently a deciding
factor. Most quant jobs ask for C++, with
much smaller demand for C# and Excel VBA and Java. Although Excel is the second most
common skill, alas Excel VBA is regarded as trivial so few employers will be impressed by
mastering it. This attitude is responsible for major efforts at the large banks to defuse the vast
number of actively disruptive, yet critical spreadsheets that enjoy the reliability of a British train.
Although VBA is very common in quant work, an employer who is particularly keen that you
have it is slightly worrying. Some quants get sucked into roles that we call Excel Jockeys.
Although some Excel work is cutting edge trading floor work that makes money every time you
get the sheet to work properly, the majority is looking after risk reports, data ingest and sheets
that even users dont know why they have.
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MatLab is common in both academia and finance, and it does not harm to have used it, but again
like Excel VBA the view amongst managers is that if you are smart enough to do real quant work
you can pick up whatever MatLab you need though we do see a few jobs for extreme high end
MatLab gurus.
Fortran is still quite popular in academia, but has only a tiny market share in banks. If you have
the choice for which language to use in a project whilst studying it is worth considering C++.
However you should budget in extra time to master it properly. But if youve got good skills in
numerical analysis in Fortran, then youve proven you can do the work. Some managers
appreciate this, although others do not. Much C++ code in banks is really much like C, and one
does see C++ code that is written using the C subset but trying to be like Fortran.
Apart from understanding the subtleties of the language, you may need to demonstrate a general
understanding of software engineering. Although efficiency is, of course, good, what matters
more is that the thing actually works and in financial markets you have to show a pragmatic view
of how you trade off these things. There are at least two pertinent programmers sayings:
Fast, Reliable, Ready Soon: Pick any two
Easier to make correct code fast, than to make fast code correct
Academic code is light on things like error handling and checks to ensure input data is of the right
range. Get in the habit of thinking of sanity checks for all numerical values. Working code is
not code that happens to produce the right result when you feed in carefully chosen values in a
tight range. It means functions that have been tested across a wide range of values and whose
output has been compared to known good values.
A common symptom of a bug like uninitialized variables, or a stack error is for floating point
numbers to contain absurd values like 6.12122*10302
Deterministic routines should always return the same result and Monte Carlo should have known
convergence characteristics.
You should get in the habit of making your code tougher, assuming that people will actively try to
break it, because that is rather close to the truth.
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C++
C++ is a topic in its own right and well soon be releasing an upgraded version of the C++ for
interviews notes. An outline of skills required for C++ is:
Variables
You should know about scope, stacks, and static variables, that comparison of unsigned and
signed integers can be interesting, that doubles are not reals, and that comparing them for
equality is not safe.
Pointers
You should know the difference between new and malloc, when to choose either, and that you
must not ever mix them together. Returning a pointer to a stack variable, and allowing resource
leakages are common interview bugs for you to find. Knowing ** as well as * seems to separate
those who are seen at interview as having only a superficial skim from those who have
understood the language. You should also understand the relationship between pointers and
references.
Classes
Obviously you should know private, protected and public; but you should know why the default
is private, and use good programming practices like avoiding data members being public. Learn
the difference between a class and a structure.
Passing by value and reference

C++ passes by value, unlike languages like VB. This means if you change a vaue in a function, it
doesnt change as far as the calling function is concerned. Think about why it can be much more
efficient to pass a reference rather than a value, and how const can make that safer.
Templates
You should be able to create basic templates as well as use them. You must be very clear that the
overhead in templates is extra code space which is normally trivial, but that that at runtime it is
essentially zero. This is why STL code which uses templates is typically faster than the code you
might craft by hand, which as well as not being obvious may be a misconception shared by your
interviewer.
STL (strings, vectors and algorithms)

Very dangerous to put C++ on your CV these days without at least basic competence in the use of the
STL. Common, if silly, interview questions include being asked to write the declaration of a vector of
linked lists of queues.
Inheritance up to the level of virtual functions

You need to have a grip on polymorphism, and please do not confuse it with templates, expect to be
asked which function gets called questions at interview.
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Basic OO
OO is not just inheritance it is a way of thinking about things in a way that models behavior in a way
that makes them robust and easy to use.
All of the above represents a lower bound, below which you should seriously consider whether to
put C++ on your CV without a qualifier such as basic knowledge. C++ is a rich domain for
questions about syntax that look like someone banged their head on the keyboard. It is better to
have a good grasp of the core concepts of C++ than in a short time attempt to read up the whole
language. Common interview questions are of the form which function is called, and whats
wrong with this code. Often you will be expected to describe things like virtual inheritance or
template specialisation.
Boost
If you want to be taken seriously as some sort of quant developer or for your claims of being an
expert in C++ then be prepared to justify this in terms of keeping up with current technology by
mastering at least some of this set of libraries.
Numerical algorithms
Its good to have at least a basic grasp of the basic methods for solving PDEs and other maths
problems. Most QF uses a mix of Monte Carlo, trees and finite-difference methods. Its worth
getting to the stage where you can sensibly say when youd choose one method over another and
their limitations and advantages. There is also some demand for Matlab and Mathematica. These
are mostly used for prototyping ideas, although they are also doing live work in trading.
Similar issues apply to quiche languages such as Java and C#.
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Reading list for C++
If you are going to be selling yourself partly upon your C++ skills, then you must read the latest
edition of Stroustrup.
If you are making the assertion that you are strong in C++, then you should read one, or
preferably both of:
Exceptional C++
More Exceptional C++
By Herb Sutter, published by Addison Wesley.
Sutter takes the approach of taking specific aspects of C++ and drilling down so that you
understand them at a deep level. Neither are good as your first C++ book, Stroustrup is still about
the best for that, but a more gentle introduction, and one that is preferred by many is Bruce Eckel,
Thinking in C++
http://books.globalinvestor.com/books/20552.htm?ginPtrCode=10202&identifier=889da2f4043309ec6be6ce8b0667
c79c
It can also be downloaded free at:
http://www.mindview.net/Books/TICPP/ThinkingInCPP2e.html
Two good books on C++ for quants are:
Financial Instrument pricing using C++
By Daniel Duffy, published by Wiley.
This combines financial methods with patterns and is best thought of as your second book in C++
after you have worked through Stroustrup. Includes interfacing with Excel, important because a
large percentage of C++ is front ended by Excel.
http://books.globalinvestor.com/books/17081.htm?ginPtrCode=10202&identifier=a49d71be25a99088bb7a3d4aac82
ff74
C++ Design Patterns and Derivatives Pricing
By Mark Joshi, Cambridge University Press
Mark manages to get books into both the mathematical finance and quant programming sections
and this is a relatively gentle, yet rigorous first book of C++ quant development.
http://books.globalinvestor.com/books/17705.htm?ginPtrCode=10202&identifier=a49d71be25a99088bb7a3d4aac82
ff74
If you want practice understanding some of the more gruesome things that people do with C++,
then the International Obfuscated C++ contest will provide you with a different perspective of
how you build code.
http://www.de.ioccc.org/whowon2005.html
www.PaulDominic.Com
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Dealing With Offers
The Tipping Point
At some point during the process, it will switch from you selling yourself to them, to the bank
selling itself to you. After what may be a protracted series of interviews, tests and meetings they
have decided they want you. You now represent the payoff of a serious amount of investment in
time and effort and they will try quite hard to make sure it does pay off. Its not uncommon for
them to have interviewed anywhere between 10 and 20 people, and we hear tales of some firms
sucking in 50-60 for every one they actually hire. It is also the case that your headhunter will be
very close to actually getting paid, so he will want you to accept as well. A decent employer will
not expect you to make a decision on the spot and will allow a week or two for you to choose the
option that works best for you. Unless the other interviews are for very inferior jobs, then its not
wise to cancel them, no matter how much a HH tells you they are a waste of time.
The better type of HR people see their role of supporting the business decision to take you on by a
combination of checking you out and selling the bank to you.
What is an offer?
Currently the market for quants is pretty good, so a verbal offer of a job is perfectly acceptable.
But times change and it is only a real offer when the paperwork arrives from HR. Do not turn
down your 2nd or 3rd best offer unless and until you get a piece of paper from your new
employer. This will usually take far longer than you might expect, because of bank bureaucracy.
If the market goes into a decline, then you should be very conservative about shutting down any
offers until you have a written offer in your hand. For the avoidance of doubt, that means
continuing to go to interviews no matter what the headhunter has placed you says. Some get very
pushy about ending your search when their client makes a verbal offer.
Delaying Job Offers

This is not as impossible as many entry level candidates seem to fear. The trick is to put this into
the process at the right point and in the right way. The two wrong times are at the start, and at the
end of the interview cycle. Many headhunters flatly refuse to deal with candidates who are not
available within the next couple of months. Partly this is because they personally may not be paid,
and often it will make you harder to sell to the firm.
Conversely, it can be a terrible mistake to wait until the offer is made before letting your hiring
manager in on your plans. This is because it takes significant effort by the hiring manager to get
official permission to hire you. Most large firms have excessively bureaucratic and political
processes whose sole function seems to make hiring as hard as possible.
The trick is to get the manager on your side, once you feel he is coming around to the idea of
hiring. Your attitude should be to make sure that he knows what he is buying.
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Process
It is sometimes the case that there is no formal approval for the position yet, so your new boss has
to go through internal processes to get it approved. This especially affects quants since your work
will often be paid for and used by multiple groups and each has to both approve of you and the
headcount that you will fill. This may take place in a short meeting soon after they see you, or
over a few weeks as they see others and someone tries to coordinate the process enough that a
consensus arises. As these people will be in more than one business area and sometimes different
countries, this is not always rapid and is quite badly affected by Christmas and the summer
holidays.
In a slow market, many firms make the recruitment process considerably more bureaucratic and
slow, as a primitive Soviet style mechanism to push headcount down.
You may not be the first choice, but especially at the entry level we have many people going for
many jobs, so they may miss the one they want, although of course this is not usually
communicated to you.
They then tell HR to send out an offer. They will have processes of their own and it is not exactly
unknown for the first thing for HR to know of your employment is when they are told to make
you an offer. In some firms the generation of contracts has been outsourced. This is done for cost
reasons, not efficiency in time or stress. We have heard HR managers use the same language
about getting their outsourcer to actually send the offer letter that you might hear from someone
lobbying their government to change policy, with the same air of resigned low expectation, of a
good or quick result.
All these steps may not sound like a robust or rapid process and we are sad to say that is quite
often the case that things go wrong or take more time than it should. If youve got a headhunter
helping you through this, we will (very gently) pester the various people to help move the process
along and give feedback where possible. One person who applied personally without our help
recently had to wait several months while the process ran its rather random course, the record is 5
months between verbal and written offer and we expect that to be beaten in the current market. If
were involved we can make this a little less stressful, but in the final analysis the bank will do
what it wants, when it wants to.
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Turning down offers
You should be careful about turning down other offers until you are confident that it is a firm
offer for the job you want most. Earlier versions of the Guide were considerably more relaxed
about what exactly made an offer. We now strongly suggest that under no circumstances do you
turn down any offer from anyone until a piece of paper arrives in your hands from the firm you
want to work for.
This will not make you popular with some headhunters, to which we respond tough, feel free to
quote us on this.
Legally, a firm can usually kill your offer, with no greater cost than a month or two or salary, so
even a written contract is not a risk free instrument. As we say above in the description of the
headcount process, there are now more approval barriers to you being hired, and if one gets in
your way it can lead to severe delay, or the
verbal offer never actually making it all the
Things have changed since we wrote Guide 1.x
way to a contract of employment.
Our advice now is not to even consider ending
your
search for the right job unless and until you
They will typically set a deadline of 1-2 weeks
have physical paper in your hands.
for you to make up your mind and even if you
have no other useful options, take some time
to think it through. If youre applying personally, then you have to make sure you tread a path of
keeping in their minds and really irritating them. No one likes nagging emails, no matter how
polite you are. Either they remind them of the fact thats theres more bureaucratic work to be
done, or theyre waiting for someone else. The politeness we mentioned above is really valuable
to you here.
Once you have an acceptable offer, then this can form a useful hedge when trying to get other
firms to speed up their processes (but not Goldman Sachs). Since you have a limit on your
exposure, you can take a slightly more assertive line with the laggards. They will know that the
offering bank will be putting pressure on you to accept and that you have limits on how long you
can wait.
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Getting More Money
Once you have a firm offer, you have hedged against the downsize so volatility has a strictly
positive value, which means you can ask for more money, or some other concession from the
firms that have yet to make a formal offer. A straight demand is almost certain to fail, but
dropping it into the conversation is good, or if you are not dealing directly informing your
headhunter he has a number to beat is the best, since he has a straight Heaviside function for
placing you: no job no fee.
It is important to understand the details of the utility function of any headhunter in thi context.
You probably know that in 80% of cases, the HH gets a % of your starting salary from the bank
or hedge fund, and thus the more you earn, the more they get to spend on drugs and alcohol, or in
the case of Dominic, funding a remake of Captain Scarlet. But they also care about the probability
of placing you, because of the binary nature of the option they are trying to sell. Once they know
that the only way they can get any money is getting a better option, then they have a simple clear
incentive, which is always a good way to manage people.
Some managers and headhunters will try and get you to accept extremely quickly. If this is the
job of your dreams, then no real harm is done by accepting quickly, indeed in a tight market,
delay does have risks. But if you are being sold-to heavily then its worth making sre you are
making this big decision with the clearest view you can get. It is of course flattering to have a
major financial organisation offer you good pay
and really want you to join them, but do not let
It is as hard to be a successful quant who doesnt
that blind you to the situation. One very senior
do programming as a physicist who doesnt do
manager at a global firm once described his work
calculus.
as persuading smart people to join us. These
bosses can be very persuasive when they want to
be. Its fine to enjoy the moment, but as a new entrant to the market you can say that you are very
keen but because you are new to this, you think its best for all concerned if you make sure that
its the right thing for you.
Sometimes a headhunter may say that you have to accept today, or theyll walk away. This is not
likely to be true, both the HH and the bank have invested quite a number of hours in finding you
and theyre not going to let that go to waste, unless you provoke them. Do try to get the
managers direct line, for just this sort of situation.
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Spotting bad jobs

Objective Information
Once a bank has decided it is interested in you, then they will try quite hard to paint a good
picture of the job, and its prospects and opportunities for you. They are selling to you, sometimes
quite hard, and its important to try and get as much hard information as you can. The odds are
that if one bank wants you, then so do others, and you may need this information to help you
decide. The trick of this is to get useful data, without appearing arrogant or difficult. Your
questions should be pitched as those of an interested person trying to understand a large complex
outfit. There is no need to be confrontational, or to appear arrogant.
Were always happy to offer personal advice on how to evaluate offers via the website or email.
Questions you should get answers to
Most managers are not trying to deceive

you, but they have a lot to communicate
Where will I be sitting ?
in a short space of time, and as a
What is the actual name of the area which I be
manager they have a different point of
joining ?
view from the face workers.
Who would be my boss on a day to day basis ?
Whose group am I in ?
Which bonus pool will I be in ?
What sort of work is the group doing now ?
How will the work of the team change over the next year ?
What other groups do they interact with, and how much ?
Will I be using Perl ?
Most of these questions are at least partly stealthed as positive interest in the work and your
contribution, except maybe the Perl, and well come to that
Not all of these questions sound useful, and we suspect are not very intuitive, especially the first:
Where will I be sitting ?
Interviewers like emphasize that you will be close to the money. Some use this exact phrase, or
variants such as working closely with the traders. A slightly worrying version is when they say
working with the business. That implies that you arent part of it, and is a common term used in
IT roles. Physical location is a big thing in banks, and whereas the majority of quants arent on
the trading floor, distance does matter.
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What is the name of the area which I will be in ?

Which bonus pool will I be in ?
These two questions have distinct answers, and you need toask both. Sadly we observe that
headhunters are themselves sometimes lied to on to these important questions, or at the very least
not given correct information.
The name of the area is also a real issue, and it is not the same as your bonus pool. It is pretty
common for your work to be with Team A, but you to be in an entirely different bonus pool. It is
not exactly unknown for you to be told you will be working for Credit Derivatives Trading, but
for you to be in IT or middle office. This can make a huge difference in what you get paid, and
your future career progression. The work will also be different, perhaps in subtle ways but careers
look remarkably like Martingales, so if you start down one path, the expectation is that is your
direction for a long time.
And yes, it is not unknown for you to be told explicitly that you are in one group, but actually be
put in another. Sometimes it is not an issue, but 80% of the time it means that you arent exactly
where you wanted to be.
Who would be my boss on a day to day basis ?
Is of value, since you can focus upon the sort of work he does as a proxy for what you will be
doing. Its also useful from this part of the information gathering to try and form a model of the
background of senior staff. Its generally a good sign if senior people look like you. Of course
working for X does not equal in same bonus pool as X.
What sort of work is the group doing now ?
How will the work of the team change over the
next year ?
Ask yourself two questions about your bosses :
1) How much like me are they ?

This question has at least two payloads; not
2) How much do I want to be like them ?
only does it give you firm information, it is a
hook you may use to mention skills and
experience you have that are relevant. Although you are being hired for years to come
(hopefully), the idea that you may be immediately productive can be very attractive to the hiring
manager.
What other groups do they interact with, and how much ?

As above quants often work in what is usually called matrix management, and thus you can end
up with more than one boss. One candidate referred to this as a mother boss and a day care
boss. The degree to which this happens controls the work you do, what you learn, and the money
you get for it. A particularly bad case is where the boss that sets your bonus does not see your
work. There is upside, since exposure to other areas helps you learn, and at entry level this should
be a higher priority than money.
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Which other groups will I interact with?

Entry level roles involve a lot of learning, so its good for this set to be relatively large. A few
entry level quants are tightly bound to one or two people. This is an amplification term rather than
being simply good or bad. If you build up a rapport with experienced people in your chosen field,
then they can teach you a vast amount. However, your diversification is much lower, and thus risk
goes up as well, if it doesnt work out.
As we say elsewhere in the Guide, you will spend more time with the people you work with than
who you are sleeping with, and you need to try and evaluate if you can get along with them. In
our experience the probability of this going badly wrong is actually quite small, but the tails are
quite long
Perl
At P&D we had to think hard about whether we share this piece of information so publicly because it
is so useful, but here goes. If you are a quant developer, then Perl is a good way of pumping and
probing data with less effort than C++, even if it is a somewhat slower. However is you are a quant,
then almost any mention of this tool should worry you.
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IT
Its normal for a good percentage of your interview to focus on programming. However it is not
unknown for people who think they are being interviewed for entry level quant jobs to get sucked
into IT roles instead. Its worth asking what percentage of your time will be IT and what
percentage analytical. Many people express to us the notion that they dont want to program at
all. This is a worrying view of the work of a quant. The consensus is that the average quant
spends 60% of his time in some form of programming. This may be C++, Excel VBA
or Matlab. More than one manager has described to us the first year of a quants career as
learning to code. As Peter Jaeckel, a famous quant put it, coding is how we turn maths into
money. You must be prepared to be self sufficient in coding. Many firms have specialist
developers for the final implementation, but you will still have to prototype and manipulate your
own data.
Probably the greatest single concentration of difficult career decisions and pitfalls are those
experienced by people involved with computers. As we say elsewhere programming is a critical
component of being a quant, but it is very easy to be landed with a job that is pure IT with no
quant aspect to it at all. Sadly it can start with the description of the job you get from a
headhunter, which may lose important facts about the role. Though this is less of a problem
than it might have been since most are tragically bad at hiding the truth. If you are in any doubt,
ask for a copy of the original job specification, since these are usually more honest. However they
may decline to do so, sometimes because they havent been given one themselves, and sometimes
because they just want to get you in front of the hiring managers, just in case they get lucky and
you take the job.
There is no single simple test for what sort of job has the right balance of technology and other
work for you, but we will give you some tips on avoiding the blackest holes.
You may not be a star programmer, but you have to attain basic competence, if you want to make
a success of this career.
Were always happy to offer personal advice on how to evaluate offers via the website or email.
www.PaulDominic.Com
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Being Foreign
We dont care
Quant finance is a business area where nationality or other superfluous characteristics are not of
any real significance. Turn up to a Finance Focus or Random Walkers and you will see a very
wide range of people, since the core issue is how well you do the work. Some managers at banks
are quite smug at having succeeded in an environment they regard as a global meritocracy. Banks
are sensitive to discrimination issues, not least because it has cost them a lot of money in the past
when they have got this wrong. Thus you may be asked about your age, race and some guess
made about your sex. We say guess because a scary percentage of people whove seen
Dominics online details thinks hes female. Whilst working at IBMs research labs, the HR
department became quite intense about Dominics maternity leave at one point. Dominic was
not even an employee of IBM.
Some banks now directly ask applicants to fill in diversity forms ; this information is mostly to
make sure that they can honestly say that although only 4% of their quants are women this is
because only a tiny percentage of the applicants were women and similarly amongst various other
groups. Like many other HHs we dont put irrelevant stuff on your CV, and our policy is that we
dont change your CV at all. If we spot a wretchedly bad error, then we ask you to fix it, but the
important word is if
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Visas
Most of the good jobs are in London, New York or Chicago, so a large percentage of people
applying to be a quant, are not from the country that they want to work in. Although Paris had a
viable finance centre, pay is typically around half that in the major centres. Banks will sometimes
help with visa applications, but they generally dont want to, partly for reasons of cost, but mostly
because its more work. The more you can reduce the effort of hiring you, the better your
chances.
In the US market we see a general random tightening of the criteria for non-resident students
wishing to pursue long term careers in the states. In most cases you will get a year, but that clock
starts ticking rather quickly, and in that time you need to find a firm that will fight the good fight
on your behalf.
Employers are increasingly asking only to be sent details of candidates who can start work
without these issues. The core of the problem is not merely the time and cost, which can easily be
outsourced, but the apparent lack of any real way of knowing whether you might be allowed to
stay or not.
If applying to a bank in London then you should look at the Highly Skilled Migrant Programme,
which is neutral about your country of origin and is optimized for people whose presence brings
financial benefit. We are now finding that it actually is a useful minor qualification in its own
right since it means that some official has actually checked your earnings and academic
qualifications, and of course it mean they dont have to worry about visa hassles, so please make
sure that it is at the top of your CV. Most HHs and HRs understand it, which makes it a good
brand.
The system seems to be scrupulously fair, but alas it is run by a section of the British government
whose own minister refers to as dysfunctional and not fit for purpose, occasionally they
rearrange its structure on a random basis. Thus you must make sure you dont expect them to
think at all. You must include every bit of paper they ask for, and preferably support any fact by
more than one written piece of evidence. You need to make sure all translations of qualifications
have the right translation and that it is certified in the right way.
You may wonder why we make jokes about Accenture and EDS in this guide. Guess who does
Home Office systems and consultancy ?
But at least it isnt as bad as the US system
Fortunately, the large banks have people who can deal with this nonsense, so your goal should be
to motivate them to press that button. What they do not want are surprises, so you need to
research your current status properly so that you can give them a reasonable idea of chances and
effort.
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Highly Skilled Migrant Programme
The HSMP is a points based system for those intending to move permanently to Britain. You get
points for education, age, and how much money you have earned. There are currently no quotas
based upon country of origin. Although slightly bureaucratic it is scrupulously fair, but you
should allow time for the process to grind away.
To make the most of your HSMP, you need to make sure that you have every single piece of
paper that they will ask for, and if possible more than that supports each issue. In one case a
candidate we were helping, found that the British authorities would accept Indian pay statements,
but not British ones as proof of earnings. No, we dont know why either, we said fair, not
efficient. This was solved by acquiring copies of the relevant tax records. If your documents are
not in English you will need translations.
The HSMP is recognised by nearly all banks, and with a bit of prodding hedge funds and
consultancies can understand that this is the gold standard of visas. It is not dependant upon you
having a specific job, and after a number of years you get a full British passport.
The HSMP is actually treated in many cases as a form of academic qualification, since it means
that your background has been officially checked and found to be good, so you should make sure
that if you have passed, it is on your CV.
Education
If you have spent any part of your education or work experience in an English speaking country,
then it is worth including this in your CV, just to emphasise that your language skills are OK,
even if otherwise it has little value.
Multiple Languages
Again on the point of language skills, we sometimes see an impressive list of several tongues, but
once you have demonstrated skills in English, it does not help your case to list many other
languages since it may give the impression that English is not even your second language. Unless
the role you are targeting will definitely use a given foreign language, it is probably best to leave
it out.
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Being Female
This is actually one of the harder elements of the guide to get right, not least since Paul &
Dominic arent female, but here goes anyway.
As youve already spotted, the % of female quants is so low that we find it hard to accurately
measure, but looking forward we see from our work with entry level candidates that the trend is
sharply up, especially amongst people entering via the Wilmott CQF or a Masters programme.
Although the banks are at pains to talk of their equal opportunity policies, informal conversations
paint an entirely different picture. It is the case that the hiring managers we talk to are quite
positively inclined to interview more female candidates, and so the prior probability of getting an
interview is significantly higher. That sharply moves the game in your favour. For this to benefit
you, the hiring manager must know that you are female. This is pretty easy if you have a name
that he (and it almost certainly will be he), recognises as female, but it does not hurt to put Miss
or Mrs. in front of your name.
P&D has a variety of contracts with banks for the supply of quants, and almost without exception
we are explicitly forbidden to add details about sex, age, race, etc. This applies to other firms as
well. For some reason this is rare in hedge funds, but we assume that is because they have yet to
experience large scale lawsuits. However, P&D do not meddle with your CV, so if you want to
put this stuff in, that is your choice.
This is not a sure fire 100% guarantee, since some managers and headhunters have an attitude
towards women, but it is low cost since if they dont want to employ you, they wont, so there is
little to lose, though we do advise against the use of Ms which is dying anyway.
Most of the larger banks have adopted some sort of diversity strategy, and several have
introduced networking groups, which can be useful, once you have a job. As with race, the banks
track applications from women, but their systems are set up so that ticking the F box is
separated from your application, and is used for statistics and reports.
We have seen a variety of groups which purport to help women into finance. Firstly we genuinely
do not believe that women actually need more help in quant finance, provided they have the right
stuff, and second we have yet to find any female quant who has actually benefited from such help,
but we are always happy to learn more.
Networking
Related to this is meeting people in this industry, both to learn how things really are, tricks of the trade
and to make useful contacts in terms of getting employment. It is easily noticeable that the % of
women who turn up for Finance Focus, Random Walkers and other events where you will meet your
peers and older hands is far lower than men. Maybe you have better things to do with your life on any
given evening, but the cumulative effect is quite harmful to your career progression, made worse by
the fact that the loss you incur by missing them may fall below a level that you notice.
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Being Older
In the USA people tend to emerge from PhD programmes in their very late 20s or early 30s, and
in Britain slightly sooner, but in either case they mean that the average age of people entering
quant finance is rather older than many people suppose. Further, people in banks have relatively
short time horizons, so the fact that you have couple of fewer years left in your career simply does
not matter to them, usually. Of course some managers will reject you for that reason, and the fact
that it is against the law of is relatively little use to you. But in our experience the principal
emotion in the mind of a manager when he finds an older candidate that can do the job well is
relief that he can stop looking at get on with doing the job he is actually paid for.
How Older Quants Fail

Some managers fear that you will not be able to cope with the hours and stress of working in a
bank, and before you start down this path we would seriously urge you to think this through
honestly for yourself. Banking hours vary quite a bit but 8 to 6 is pretty common, with 7 to 7 far
from unknown, and this may include weekend work. Bankers like to characterise themselves as
results driven but sadly a large number of managers like face time where you show
commitment by being there not only when its not necessary but often working hours past your
personal maximum so that you actually achieve less.
If you feel your age is hurting your chances, then leave it off entirely. This works better than you
might think since the first pass at CV reading by interviewers rarely is sophisticated enough even
to include simple arithmetic from graduation and other dates. Again repeating a message given
elsewhere, you should try to have more than one variant on your CV, and dropping age is an
obvious and easy approach to adopt.
Hours
Typically the closer you are to the trading part of the business, the longer and less flexible the
hours, but the more money you get per hour, though very few people are paid on an hourly basis.
This means that there are roles in risk management, model validation and IT which allow a better
work/life balance. There are also jobs in software houses, ratings agencies and regulators where
although you will typically earn less, the hours will be rather better. The picture for consultancies
is less clear, some work very close to normal office hours, and in some cases they seem to put
in longer days than anyone else.
It is quite possible that age discrimination laws actually work against you here. Ideally a manager
will be able to ask questions that allow him to work out that you can do the hours he expects, but
of course HR will have told him that this is legally risky, so he will just make up his mind without
your input. This is probably not going to help you, so you need to take the initiative, without
drawing attention to age by saying things like although Im old, I can still hack it. You should
instead go for dropping into the conversation, a few examples of long hours and stressful
situations in your recent history. Naturally, these should not seem to much like complaining how
tough your life is, but as amusing anecdotes.
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Things you need to show
The single most common failure mode for older candidates is where they do not show that they
have done something with the extra time. Of course in an ideal world these are things that have
direct relevance to finance, but it is not always necessary, if you can show that your non-finance
career was a success, and that you are not bailing out into finance because it isnt working for
you.
That means mentioning progression based upon success, projects completed and that you have
continued to learn even after your formal education ended. You have the opportunity to
demonstrate that you have done things, and if you do not, the silence will speak loudly. You also
need to review your experience in some detail and think through how it may be applied to
finance. This should be done in parallel with the reading we encourage you to do as you start this
change in your career. This should not be as difficult as it might at first appear, since quant
finance is a new field which has stolen most of
its techniques from physical sciences,
Make sure that you can demonstrate the extra
engineering, standard mathematics, computer
time in your career has been used to some good
science and of course gambling. However, if it
effect.
does turn out to be very hard, then we would
counsel you to seriously consider whether you
are doing the right thing.
Being an Old Newbie

You will have to be clear in your own mind that you are not going to be joining at anything that
resembles a management position, no matter if you get called vice president or anything else.
From above, the sort of person who makes this transition successfully has typically earned the
respect of their peers, and carries weight in the organisation they work for.
This ends now.
When you turn up at a bank, you are a newbie, you will be taking orders from people much
younger than you, and quite possibly less intelligent, and apparently for no good reason, you may
even be right and them hopelessly and expensively wrong.
Tough.
Not only do you have to deal with this, it is good to express the fact that you can to the
interviewer, and again if you can think of examples of the variety of people you have reported to,
and how well this worked out. Please dont use anecdotes of the form we once had this kid as a
manager, but we soon sorted him out.
Management experience has to be handled carefully, since in many organisations your use of
analytical techniques and real programming drops off very quickly the more people you get to
boss around, and although your current employer may value your skills at budget management,
Powerpoint presentations, and the way you rapidly answer mail on your Blackberry, these do not
help you in quant finance one little bit.
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Being old at Interview
Some of the factors above are things that you cannot influence greatly, but Bayes law is also on
your side here once you get an interview. If a manager is interviewing you then it means that your
age is anywhere between neutral and positive, so there is no reason to be defensive. In any quant
recruitment, you have to bear in mind that they want you to be useful. Weve calculated that each
candidate that walks into a bank or hedge fund for an interview process is going to cost them
about $2,000 to 3,000, and at firms like Goldman Sachs with their more extensive process and
rather expensive people its nearer $10,000 in time that could be spent making money. You
should therefore assume that they wont bother if you clearly dont meet their specification.
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Dealing with Headhunters

Disclaimer: OK, we are headhunters so apply whatever discount factor you feel appropriate,
but weve tried really quite hard to be objective.
We started a headhunting business because we saw that quants needed help from people who had
hardcore experience of working in banks and as well as quant finance. This guide is part of our
ambition to go beyond the standard of being a meat market to a resource that people turn to when
going through a quite stressful and important part of their lives. <advertisement ends>
Warning
On the Forums, P&D often refer to ourselves self-mockingly as pimps. Were fine about being
called this in return. Most headhunters do not like this at all, so dont alienate the person who
might be getting you a job this way.
How to work well with a Headhunter

When applying for a job realize that he has to try and sell you to the bank, so arm him with
information to pitch you to the client. Explain how you fit, both verbally and in the cover letter,
and ask him what else he knows about the job so that you can review your background and find
more of what the client has told him you are looking for, and so build a CV for this particular
target. Be aware that you are not the only person he is trying to place, so will not be devoting
every single waking hour to your cause.
How to spot a good headhunter

A good HH has good jobs and understands the work. At any point in time a HH may not have a
role for you, simply because the market is so fragmented. A good HH will be honest about this
and chat to you about the sort of direction to head in. The majority of HHs are sales people; they
get paid for selling you, not for building up relationships beyond getting you placed. That focus
can work to your benefit, since their objectives and yours are to get you into a job as soon as
possible. He should be able to describe the job and should advance at least some idea why he
thinks you are right for the job. A good HH will have read your CV and identified things from
your experience that need to be expanded to make your application stand a bigger chance.
How to spot a bad headhunter

Some HHs will spam your CV to every bank on the planet, regardless of which job you actually
applied to. This is for their benefit rather than yours. They also try to push you into giving the
names of the managers youve spoken to at other banks, as we see later thats not good at all.
They may ask you to make them your exclusive HH, which is very bad for you at entry level.
Some HHs are more than a bit optimistic about a jobs quality. This ought to be hard to spot,
but often it is surprisingly easy. This is because they lack the knowledge of banking to cover their
tracks. Thus you may well find a job in housekeeping IT described as a quant job. Yes, really,
that is a daily occurrence.
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Multiple applications
HHs get paid for finding people like you. But banks really dont want to get involved in dealing
with different HHs who have sent your CV and both want money if you get hired. Some have a
simple policy that if you apply twice, then your application is rejected for both. HHs hate that a
lot and it makes them look bad as well as costing money. Some HHs wont tell you where theyre
sending your CV. This is bad news and can cause this sort of problem. Of course it may stop you
applying to other banks because you dont know where your CV is being sent.
You should insist on knowing the name of the bank before they send in your CV, some will
refuse. None of the motivations for doing this are good.
Some HHs will send your CV out without asking you and this causes all sorts of problems, yes it
is illegal but sadly the organisations tasked with enforcing it do not bother. It is deeply frustrating
when a HH cant get hold of a good person to
get permission to send and banking clients are
The way some headhunters work is by sending
not known for their patience. Typically it is
your
CV as part of a stream so large that it
some sort of race, with more than one HH
activates
the spam filters at some banks.
chasing each job. In several countries, it is
illegal to send in a CV without permission, but
it does happen. We (P&D) dont do this at all, hence the slightly frustrated tone when we tell you
to make sure your contact details work reliably.
Carpet Bombing
Some HHs take this to an extreme. We have reports of senior managers getting a couple of dozen
CVs from each such spamhunter per week, one apparently sent so many CVs it triggered the bank
Spam filter. Its hard to imagine that the candidates as cannon fodder actually agreed to be part of
this human wave, or that it serves their best interests. But it does work for the HHs that do this,
even if it harms the people they claim to be representing.
If youve been spammed into a bank, then it may be the case that only the spammer can represent
you there. Since they work by carpet bombing, there is no notion of them trying to engineer the
process, so it means you may well be stuck with them. You can see why they like this, but even
then many banks have a policy that if two HHs submit the same candidate then you will not be
considered at all. They do not want to be caught between two firms arguing over who owns
your application. This sort of collateral damage may be acceptable to the spamhunters but can
have drastic effects upon your career prospects. The flipside of this is that your contact details
must work and be on your CV. We do get CVs without working contact details and its not hard
to see that that this does not advance their position at all.
You will change your employer or university at some point, and if youve given that as your
email address it will mean that you stop getting future versions of the guide, and make it harder
for us to get in contact with generally.
It is possible to get yourself free of being owned by a HH who has spammed your CV to a
bank, and blocks other applications. Obviously as HHs ourselves, we have a variety of
techniques, but a surprisingly effective one is to simply ring the HH and ask them to let you go.
The fact is that in some countries this is illegal, and in most cases violates the contract that the
HH has with the bank, so they really dont want a fuss.
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Names
HHs need to keep their list of contacts at banks up to date in the face of continuous change. As
above the HH needs to know if youve been put forward for the role hes currently working on.
Sadly some HHs get a bit carried away with this and put pressure on newbies to give up the name
of the managers theyve been seeing. This can of course work against you, since he may have
other people who he can use to compete against you for that job, so it is not a good idea to be too
free with this. A HH only needs to know a little information such as the division and bank, Fixed
income, Credit Suisse is easily precise enough to make sure there is not a clash.
Big banks are in some ways like a franchise operation. Different divisions rarely share recruiting
processes and in some firms they have separate HR people. Also if you are currently in a job, you
should be very careful about giving out your current managers name. It does not make friends to
have your boss pestered aggressively by a HH before youve got your next role.
This is of course easy for us to say, but if youre reading this guide, the odds are that youre new
to this sort of thing. Some HHs are good at making you feel as if they personally are the only way
youll get a job and that youll starve in some isolated village unless they rescue you. Remember
of course that the HH thats pressuring you to give up names doesnt want the names he owns
spread around either. Thus a good line to use is that you were told this information in confidence
and that you will treat the other HH with the respect you treat this one.
But in the final analysis, there is no shortage of headhunters and if one is giving you a really bad
time, its not that hard to find another.
However, contact names are rather valuable information and if you feel a HH has done a good job
helping you in a move, you may feel that you want to reward that with some useful work. Think
of it as a tip for good service.
Multiple targets
For your later jobs, you want a relatively high degree of precision and it can be entirely rational to
deal only with one headhunter, or even none at all. However at entry level, it is a bad sign if a HH
wants any sort of long-term exclusive on you. The market is too fragmented for any single source
to offer the degree of exposure you need. If the HH is pushy on this, it is worth remembering that
there are about the same number of HHs as banks.
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Exclusives
Some Headhunters will try and push you into dealing only with them. At entry level we think that
is a truly bad thing for you. It is far more beneficial to the headhunter than the candidate and can
cause serious harm to your job prospects. The simple reality of the market is that any given
headhunter only sees a relatively small percentage of jobs on offer and at entry level considerable
recruitment is done directly, without any search firm being involved. Also at this point there is
significant competition for each role, so your chances of any particular application succeeding is
not high enough to rely upon one or two shots.
At P&D we dont demand such exclusives for these reasons and although it does mean we spend
effort on people who get placed other ways we are not in the business of damaging peoples
career prospects. A headhunter who wants exclusivity from a new graduate is not a good person.
(Wed use stronger language, but wed probably get zapped by spam filters.) Once you are
established with a good amount of experience, then you will want to apply a more targeted
approach and at the point it can be rational to deal with a small number of HHs, possibly
only one.
Multiple offers
You may get offered more than one of the jobs you apply for and sometimes this seems more
stressful than actually trying to get a job. Some HHs will see their commission slipping away and
try to put pressure on you. This is made worse by the fact that the bank has put a lot of effort into
finding you as well and may blame the HH if you dont accept. Youve got to take the job that
suits you best. A good HH will of course put a case, but will realise when the game is up and
store goodwill for next time. However, its not always clear cut what you want and again P&D
are quite happy to provide a sounding board for talking through the pros and cons. We do this
quite a lot, even when we arent the firm placing you; our view is that youll remember good
advice for next time.
Typically the ideal job will be a mix of the offers you have, especially in your first couple of jobs.
So there may still be a value to the relationship with the HH that came second. He will usually
be keen to try and keep the game going, given that hes close to the final line and never ever
forget that HHs are paid for placing people and they dont get paid if they dont.
See it from their side

You should be aware that recruitment isnt just hassle for you, but that the people at the bank
dont usually like it that much either and have other high priority tasks as well. Having to
interview 10 people is not uncommon and at some banks anywhere between five and 12 people
are involved in the process, which makes for a lot of work that they didnt want to do in the first
place and wont earn them any bonus. So they will be quite sad about your rejection, and try to
make you accept.
There are two basic scenarios, either you narrowly beat the next best person, or were the first one
they found who was any good. If it is the second type, then they are going to try harder to suck
you in and this can help the negotiations.
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Auctions
Banks do not like being drawn into auctions. The obvious reason is pushing the price up, but its
worth looking at how people make decisions on what they offer. Typically the hiring manager has
to explain his boss that he believes that offering X will get you on board. Often he has had to
make this pricing judgment before hes interviewed anyone, sometimes before even talking to a
headhunter. This exposes him to risk and yet more of the recruitment process he so keenly wants
to escape. This is a bank, so he will value his reputation as someone who can make good
judgments about money and a process where he has to keep asking for higher levels of pay or
rank for a new hire may risk making him look weak or foolish. Since these increases will require
justification, an unrealistic set of expectations can easily be generated. If on the other hand he
loses a good candidate because he wasnt allowed to pay for him, a politically astute manager
may have an edge for a future discussion on what his people are paid.
There is also the delicate balance between what you pay people to join your teams vs. the people
already there. In a rising market its not impossible that last years intake may be being paid less
than is necessary to get good people now. Many banks try to keep pay rises to a single period
each year, and that can amplify this situation more.
Thus hiring managers have strong incentives to avoid auctions.
All or nothing
If two jobs are close, then its worth seeing if you can make the second-placed one better.
Although auctions are likely to fail, you can structure it so the losing manager can have one last
shot. If you have a good HH, you can work together to see if there is a change in your level or pay
structure which means you will definitely take the second-placed job. For this to work its
important that both the HH and second manager feel that this is a real deal. To get you a
worthwhile change they will have to sell the idea and risk some of their reputational capital. If
they think that even after getting the better offer you wont accept, then they wont even try.
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How to Quit
Often you can simply tell your boss you are going, wait a month or so and never look back.
However there are a few obstacles that may well get in your way...
Notice periods and Gardening Leave

As banks have become more concerned about the intellectual property you gain doing a quant job
is that notice periods seem to have gradually grown. This can slightly interfere with getting a new
job, since often the new employer will want you to start sooner. In general most notice period
clauses are enforceable, so you will need to check on these. However, it is rarely a big issue and
of course if youre so valuable your firm doesnt want you to go, that looks good. However, its
worth telling your HH the terms, so that he can set the right expectation with your new employer.
Some firms have no compete clauses and
these are a naked attempt to improve their
negotiating position when you leave. It is of
course quite hard to get these removed until
youve reached a stronger negotiating position
with the bank.
The elegant way to negotiate your exit is to agree

with your boss certain fixed targets that can
definitely be delivered in the time remaining, then
you leave free and clear.
Notice periods are usually enforceable, as are exclusion clauses on who you may move to.
However, in legal terms it is technically difficult for them to get this right, since there is a lot of
employment law to deal with. One of us was once offered a contract of employment that
effectively meant that he could not work for any financial institution, company, the British
government, the American government, or anyone who might ever do business with any of these.
That essentially meant that he could only work in a coffee shop in Libya and then only if he
didnt handle money. This is not enforceable, surprisingly enough, but most banks are not that
crude, so please feel free to contact us if you get one of these, and if necessary we can put you in
contact with one of our reassuringly expensive lawyers.
It is worth remembering that notice periods are usually enforceable, but a rational manager does
not want a seriously unwilling member of staff in his team.
Although it is rational, your boss may need a little time with himself to get in the right frame of
mind for rationality to kick in.
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Negotiation
If you find yourself with an inconvenient notice period, then by far the best way forward is to talk
things through with your boss. Some people take resignations very personally, but its in
everyones interest to make this as painless as possible. Before you quit, look at your current
work and try to work out which ones are important to be finished before you leave, which really
require you personally and those that can be finished relatively quickly. Then make a hard,
realistic estimate of how long it will take. The best deal for both sides is that you finish these jobs
and go. You have an incentive to finish and your boss has some confidence it will happen. One of
these jobs is to help recruit your successor, since of course you know what skills are required. As
we say earlier, your boss wont be looking forward to the prospect of going through piles of CVs
and interviewing people of rather variable quality. You can also write a good job spec and if
youre dealing with the smarter end of HH then they will want to talk to you about the right sort
of person. This helps make your ex-boss remain less stressed and means you can fade out leaving
a good impression. The trick is to offer these
things as part of a package. You are offering to
Try quite hard to leave a good impression when
leave well and in return they wont give you
you
leave. The future is a big place, and there is a
hassle over inconvenient parts of the contract.
good
chance that paths may cross again.
Most people in banks are quite honourable
about these things, but they may be secondguessed by some more senior or generally awkward person in the bank. It is not exactly unknown
for your manager to remember a different version of events. Thus you should confirm the
agreement in a mail and make sure a copy is sent to your personal email. It is now rare for banks
to lose inconvenient emails ever since a large bank got hit for a serious legal bill when it
apparently genuinely lost some correspondence that would have helped its case. The courts
apparently took the view that the bank could not have been as incompetent as it claimed. Clearly
the judges had never dealt with an outsourced IT department.
Buy backs
Its hard to work out what people are really worth and obviously part of your reason for leaving is
that you think they have priced you wrong. If you are important to the team, then they will
consider offering you more money. The same logic applies to the work you do and your
conditions, or whatever else is driving you away. Some areas such as model validation are usually
subject to quite high staff turnover because of a combination of all three, plus the feeling of many
people who work there, that if they dont get out soon they never will.
However it is generally accepted that about 60% of people who are bought back after quitting
leave within a year anyway. Leaving your job cleanly is worth doing well. The people you leave
behind may crop up again in your career and it is far from unknown for you to consider going
back to the same firm again later. For an example of how not to show your unhappiness with your
current firm :
http://www.wilmott.com/blogs/dcfc/index.cfm/2006/5
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Money
This is the easiest to fix, which may surprise those whove been told quite strongly that there is no
money available. This is often an industry standard lie, as you may find when you hand in your
notice. Money has the advantage that its simple, to get more, if your boss can make the case with
his superiors or allocate money from some other pot. It may be hard to do this, but is usually
simpler than altering your work. Usually they will top the offer youve just been made, though
with one person we know his boss only offered half the difference. No, we dont know why they
did this either, but as you can imagine it completed his resolve to leave. You have to ask yourself
why you had to resort to this level of threat to merely catch up with the market. You cant
realistically go through this very often, so the clock is ticking on you leaving anyway. Investment
banks are the nearest thing to pure meritocracies on the planet and given that merit implies
money, being underpaid means they dont value you, which is not a basis for a long-term
relationship.
Work
Your boss may offer to change the work you do. This is typically very hard for him to do, since
the bad work still has to be done. It is also hard to objectively define and such promises are
often made in good faith, but not delivered. If there is a specific thing you want to work on, then
its worth negotiating on. You may be offered the chance to move to a sexier group which is
attractive, if true. This needs to be tied down well, a vague promise to try and get you more
interesting work does not count for all that much.
References
One obvious reason for being reasonable as you leave is that your boss may by asked to give you
a reference. This is a murky legal area. Many banks are very hard line on giving references and
require that all requests must be channelled through HR. They will issue a reference that says as
little as possible to minimise possible problems. This is to try and avoid the possibility of being
sued and even then is not foolproof. One large bank was sued after it appeared that theyd given a
hostile reference for the wrong person. Thus many have a policy of minimal references, typically
stating little more than when you started and finished.
We have seen that some candidates feel quite offended by years of service being treated in a way
that they perceive as abrupt and ungrateful. It is nothing personal, just the bank protecting
themselves.
However, HHs have the job of making sure youre right for the job and that often includes trying
to get a verbal reference and some managers will contact your previous boss for an informal chat.
This is a dark art. Your boss will usually be very wary of saying anything that gets him or the
bank sued, but most people are quite reluctant to actually be dishonest. Thus a code evolves of
pregnant silences, emphasis on words and euphemisms. This is far from perfect and quite a noisy
signal, but is often all one has. The clarity of the reference is a function of how motivated your
ex-boss is to say things and if he has strong views these come out.
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Quitting under fire
We dont recommend this, except in the most exceptional circumstances. It is a simple fact that it
is considerably easier to get a job when you have one, than when you do not. Yes, it may of
course be clear to everyone involved that your time is up, then of course you can apply the
negotiating posture we discuss above. Quitting because you cant work with you boss looks bad,
especially to the person who is thinking about being your next boss. Thus you need to tough it out
as long as you possibly can, whilst looking for another job.
Being a Blame Sink

Some people worry quite a lot about how people will think about them when they leave, and
however reasonable you are, in some places it is inevitable that blame for something will be
attached to your name. Maybe it is because you left something in a less than perfect state, or that
it is expedient for your boss to cite your departure as a reason for targets being missed. Some
managers even go the other way, using the fact that they are losing staff as a concrete proof that
they need more money for the people in their team.
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Being Fired
References
Managers are mostly reluctant to say very bad things about you, even as weve seen in some
cases where they fired someone because they could not bear to work with them any longer. This
is a difficult area to give precise advice, but there are some general principles you need to try and
use.
Firstly in most firms it is quite hard to sack people, even if the country you are in makes that
relatively easy. The bank does not want to be sued, as so often happens, and its messy for
everyone involved. In particular, it is messy for your boss. He may by now be an enemy (weve
seen the emails, it does happen why your boss is a jerk is entirely based upon experience), but
you still both have interests in common. A manager can end up looking bad to his peers and
seniors if he seems to be incompetently or even maliciously managing his staff. He cares about
that (usually).
You dont want to be sacked, and your goal has to make sure that you influence the timing and
conditions of your departure. Leaving with no job to go to has to be viewed as a last resort, since
it is much easier to get a job when you already have one. If you are unemployed many will
assume that was because you screwed up, whatever the underlying truth.
Sadly, HR is rarely on your side, although we know of any number of cases where HR took an
honourable stand against a defective manager. Quoting one HR director of a household name firm
(with her permission), our job is to protect the firm against the staff. That is certainly how
senior management would choose to define the job of people in HR. The big expensive legal
cases you will have read about are often seen as being caused by a manager not getting proper
legal and HR advice. These days managers are under instruction to get help early when its time
to let someone go. Done properly, an end of employment can be relatively stress free. To quote
one manager our HR are pretty crap but they are very good at sacking people.
However this is not always the case, and one gets the impression that some journalists live off the
pages they write about mismanagement by bank of this process.
Thus it may be the right course to sit down with your boss, and talk it through. By this point, you
are probably not going to be friends, no matter how much air is cleared. But you can reach an
agreement where you will make sure that you hand over your work in a reliable way, and wont
make waves for him. In return you set a flexible timescale for your departure. Once there is a cap
on the pain you are both enduring, work may progress better, and you should be able to buy
yourself enough time to get another job.
Whilst this process is going on, you will inevitably have some dark thoughts about your future. It
is pretty rarely that bleak. Unless you are being sacked for doing something illegal, this is not the
end, provided you try to negotiate where possible and are proactive in looking for another job. A
much higher % of people with decent jobs in finance have been sacked than you might think.
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Useful Links
www.wilmott.com
Lots of useful content, quant finance chat, articles, videos, job adverts. For the job seeker, the
Brainteasers Topic is incredibly valuable.
http://www.wilmott.com/blogs/dcfc/
Dominics Blog, on the job market.
www.PaulDominic.com
Register your CV with us.
http://www.gotw.ca/gotw/index.htm
Interesting puzzles and points in C++.
http://www.ieor.columbia.edu/forms/JobsRiskColumn.pdf
Dermans view on the way things are now.
http://www.wilmott.com/blogs/
The beta test for out new blogging environment, useful and interesting stuff to be found.
http://www.fooledbyrandomness.com/
Interesting thoughts on probability, finance and well pretty much everything.
http://math.ucsd.edu/~crypto/Monty/monty.html
The Monty Hall Problem.
http://www.mindview.net/Books/TICPP/ThinkingInCPP2e.html
Good free C++ book.
http://www.nr.com/
Numerical Recipes Home Site. This is a useful cookbook for number crunching. The coding style
however is not one we recommend. At all. Even slightly. Dont do it like that, OK?
http://archives.math.utk.edu/topics/
Math Archives, lots in useful stuff.
http://www.dartmouth.edu/~chance/teaching_aids/books_articles/probability_book/amsbook.mac.
Pdf
Basic Probability.
http://www.dartmouth.edu/~chance/teaching_aids/books_articles/probability_book/amsbook.mac.
Pdf
Intro to Numerical Methods.
http://www.7city.com/cqf
The Certificate in Quantitative Finance.
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A few basic C++ questions

What is Auto_Ptr for?
Write a piece of code to reverse the order of characters in an STL string
Why would you use a const ref?d
Is it safe to test two doubles for equality? Why?
What are lvalues?
Declarations
We include the 2 general answers to the what does this stupidly complex definition mean? In
general it of course means that either the interviewer or the person who wrote the code is an idiot,
but neither tend to make a good impression, so we present an overview. A simple one, what s the
difference between pd1 and pd2?
double const * pd2;
const double * pd1;
Answer: None.
int *a,b;
typedef int* PINT;
PINT a,b;
* or & only bind to the token next to them. So in the first declaration, we have a pointer and an
integer. In the second they are both PINTs, ie pointers to integer
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double *(*(*Ex1)(double const*))[42];

Ex1 is obviously a pointer to a
Function taking a pointer to a
constant double
and returning a pointer to an
array of 42 pointers
to doubles.
But you knew that anyway didnt you?
An algorithm:
double *(*(* Ex1) (double const *))[42];
98631247
1: Find the variable name Ex1
Ex1 is
2. Look Right )
3. look left *
A pointer to
4. Look right (
A Function that takes
Parse arguments (goto 2)
That Returns
6. look left *
A pointer to
7:Look right [42]
an array of 42
8 Look left *
Pointer to
9 Look left double
double
int& (*fn)( const double * a , double& b );
Pointer to a function that takes a pointer to a constant double and a reference to a double and
returns a reference to an integer.
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A Broken Class: Try to spot as many errors as you can

class TimeSeries
{
double * Price;
double *TimeStamp;
Tick * t;
public:
TimeSeries(const size_t count) {
Price=new double (count);
TimeStamp =new double (count);
};
~TimeSeries()
{
delete Price;
delete TimeStamp;
}
protected:
virtual double Volatility(void);
public:
TimeSeries &operator+(TimeSeries Operand);
};
Feel free to mail Dominic@PaulDominic with answers.
www.PaulDominic.Com
Page 129
Guide 2.0

Casting Off
Finally fix the following snippets of code:
unsigned int * pint =
static_cast<unsigned int*>(&i);
This wont even compile. Signed and unsigned integers are distinct types. Default in C++ is
signed. You need reinterpret.
double * d =
reinterpret_cast<double*> (&i);
Reinterpret will compile, but bad things will happen. Youve cast the pointer, not the thing. Thus
if you try to use the value pointed at, you will get some undefined value. If you assign to the
pointer, it will be worse.
char *pc =
static_cast <char *> (& uc);
This wont compile, signed chars are distinct from unsigned chars and chars. Again you need
reinterpret.
Its also worth looking at C style casts of the form
Z = (double *) q;
If presented with a piece of code and asked to talk about it you should home in on C style casts as
sources of cunning and vicious bugs. Even if the error isnt there, you will should earn a point for
spotting them as bad coding technique.
www.PaulDominic.Com
Page 130
Guide 2.0
Choosing Which Mathematics to Learn Next

One question we get reasonably often is the choice between applied maths and statistics. There is
a lot to be said for either, and our net position is roughly neutral. This is not because it is
unimportant, but because the factors mostly cancel out, and the ones that do not are more to do
with personal circumstances. It is the case that in most quant finance there is more applied maths
than statistics, but conversely there are more applications from applied mathematicians and
physicists.
But, there is another more important point; what are you best at ?
The career prospects when you are doing the type of maths in which you excel are much better
than being mediocre at something more popular. Also of course, we would never advise anyone
to stick to an entirely applied maths curriculum or pure stats if they want to succeed in quant
finance.
When you go for the best jobs, they will fire both types of question at you, and this reflects that
what you are being paid to do is solve problems and think up new ideas.
You are not being paid to be a statistician or an applied mathematician, or and we would
emphasise you are not employed to be anything at all, you are employed to do, and the doing is
the making of money.
That means if the problem involves stats you do stats, if it's PDEs, you do MC or FDM, if it's
programming you choose C++ or VBA.
One of the brainteasers illustrates our position quire neatly. It is World War 2, and you are asked
to work out where to put armour on the plane. You cannot put it everywhere because the plane
would not be able to take off, and you have full access to the records of where bullets hit the
bombers.
We hear many interesting answers to this, based upon theories of which parts of the aircraft will
be hit most due to things like the relative speeds of attacking aircraft and position of guns on the
ground. Engines and fuel tanks are often mentioned. Like so many brainteasers, you must focus
on the detailed wording of the question, and think why you were told about the records of bullet
holes ?
The answer is that for there to be a record, the plane must have made it home, after having have
survived a hit in that place, so it probably doesnt do much good to increase the armour there.
The lesson here for designing your skillset is that at interview you will be asked questions about
PDEs, even if you are a statistician who hasnt done serious calculus in five or more years.
Conversely we have seen candidates who can hack applied maths and programming but were
dumbfounded when asked why there is an N-1 term in one of the types of standard deviation. In
any reasonable data set the N-1 really ought not to be a critical item, but the sort of intellectual
curiosity that makes for a good quant will lead you to find out why.
www.PaulDominic.Com
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Guide 2.0
A lot of what people call "creativity" is actually someone smart enough to steal ideas from
different domains and glue them together.
Look at how the Black Scholes equation was solved and derived, bits of economics nailed
together with the maths of thermodynamics. You can get a Nobel prize for stuff like that.
...or at least a decent bonus.
www.PaulDominic.Com
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Guide 2.0

Internships
Banks see most internships as an extended interview, allowing you and them to see whether you
are good for each other. If they offer you an internship, it is because they think youre probably
worth hiring in the future, they even pay you for the privilege. This means that it you may find it
harder to get an internship than a real job. The current market conditions (Q4 2007), dont seem
to have collapsed the number of positions, but the continuing increase in the number studying
finance related subjects means that the competition is more intense than before, a trend we do not
see changing any time soon.
Most initial applications are handled as bulk processing which means application through bank
websites and automated systems. If you pass the first simplistic filter then you may actually get to
meet a human being. This is the area where applying as soon as possible is very much in your
interest. It is not good enough to just get your application in by the end of the period because
many banks work by going through applications until they are full, then stopping. They rarely
admit this on their web site of course. Do however, use whatever facility is available to check
your application made it into the system, as we hear a lot of stories about the reliability of these
systems, none of it good, some of it funny (if youre not personally involved).
Thus the vast bulk of internships are not done through headhunters, and most HHs dont handle
them at all. P&D do a few, where a specific business unit wants a particular skill set, but the only
reliable way to get an internship is to press every button available.
It is of course possible that when you apply, they say that youre too early. Fine, then you can
apply again later. You should not assume that they will keep your CV because a combination of
data protection laws, entertaining application management systems and the sheer volume of job
seekers mean the odds are that your CV will not be sucked into the process when it officially
starts. However, last year we became aware that one top tier bank was so unimpressed with its
applicants that HR was asked to go through the database of last years set, and re-interview those
who met certain criteria. We know this through talking to people who got jobs that way. And yes,
before you ask, it lowered still further our opinion of the IT involved.
Applying for a job does not have a high cost. The real cost is when you dont apply early enough
and miss it. Every single day, jobs you might have wanted are being consumed by people you are
competing with. Obviously the odds are against you getting any given one, but you are interested
in maximizing the area under the curve, as well as the chance of getting any specific job. This is
of course a conflict, since the weight of applications is already oppressive to firms, but that is not
your problem, google on tragedy of the commons if you dont get this idea.
There seems to be a clustering of PhD defences in the lead up to Christmas and it is tempting to
apply after your PhD. Thats wrong on a couple of counts. Firstly the bonus round is going on so
employers are distracted and Christmas causes a lot of processes simply to stop. Also you are
competing with the others who also waited for PhD completion and that doesnt help your
chances. Youve also missed the jobs that went out whilst you were waiting and theyre not
coming back.
www.PaulDominic.Com
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Guide 2.0
Transition from IT to Quant Finance

Since such a large % of quant work is software development many IT people see this move as
attractive, since it offers more money and greater choice of work. Quant finance often uses a
different mix of technologies from housekeeping IT. Central to this is C++, we talk about this a
lot, because lack of this skill is easily the most common barrier between an IT person and the lane
change they are looking for. It is also one that is fixable, because although C++ is not a trivial
language, the majority of its users are self taught.
Although typically IT professionals have weaker maths, and of a different type to those used in
finance the useful level of demand exists because of the importance of programming to this line
of work. Note we are saying programming, and most other aspects of IT are of considerably
less value, so operations, network management, and business analysis do not usually help you,
and in some cases act as signals that you are not suited.
For many IT people, this therefore means what
they will see as a backward or downward step
to getting their hands dirty. Thats just the
way it is, and you will need to make sure that
you can code well.
Learn C++. If you dont then expect to die alone,

poor and unloved. Probably your body will be
eaten by your mongrel cat which by now is your
only friend. Or it could be really bad.
IT Degrees
As you may observe from the Wilmott.com forums, we have certain views on the quality of many
Computer Science programmes. We hear tales of departments that teach operating system
internals using Java because it is easier. The fact that there are no O/Ses written in Java doesnt
seem to impact those responsible for this imbecilic decision. At the time of writing we are unsure
it is due to the low calibre of the lecturers, or the fact that their students are too dumb to learn
C++, partly because although we have written (politely) to several lecturers at Kings College
London, they are too cool to log in and use email.
For any subject we are entirely unimpressed by anything that is billed as the easy option, unless
the problem is itself impressively complex. Learning C++ doesnt count as impressively
complex.
Java is a perfectly adequate first language for teaching data structures, patterns and algorithms,
and even simple threading. There is a useful commercial demand for Java, but not in quant
finance, where it barely shows up as noise. Even for those roles that require Perl, VBA, C# and
occasionally Java, we often see employers ask for C++ though they expect only a small part of
the work. This is because mastery C++ proves that nothing a computer does is likely to scare you.
What seems to come as a shock to some IT graduates we meet is the expectation that they are
supposed to understand computers. By understand, we mean the ability to think at multiple levels,
as the task demands. That may be large scale grid architectures, processor architecture, patterns,
functional languages or bog standard C++ loops. You should know that doubles are not reals. If
this is news to you then dont bother sending us your CV. That may sound harsh, but we meet
people who claim to have studied CompSci who are ignorant of this but still think they are smart
enough to do quant finance. They are wrong.
www.PaulDominic.Com
Page 134
Guide 2.0
It is of course quite possible that your lecturers took the easy option of teaching you some quiche
language like Java, this is not quite your fault. However if you really understand programming
then you can learn C++ all by yourself. More than 50% of C++ programmers are almost entirely
self taught, so it is quite feasible. But that is not the same as easy. We include various good books
on the reading list. The time to start learning them may already have passed, so you need to make
up for lost time.
Quant Developer
Skills to help you become a Quant Developer
Yes, were going to say C++ again.
You need to have your numerical methods up to speed, understand O(N) notation, and be able to
trade speed vs space. Some SQL does not hurt though be aware that if they really seem very keen
on your database skills this job may be far more along the developer axis than the quant.
Excel
One thing we have learned the hard way is that most specialist Excel developers are really quite
amazingly incompetent. When we started P&D, we just had some vague worry about their
quality, but one day a large bank said Were your largest client, the sort of phrase that never
ends with something you want to hear. They had been interviewing Excel people, and by this
point they truly hated them, using words like chimps, and harsher words that would stop this
document getting through corporate firewalls. So we interviewed Excel people, and to be fair the
majority of them managed to make it to the interview without getting lost, but that was pretty
much the only skill that we could rely upon. Simple VBA confused them, and nearly half had to
have And explained to them. Yes, really. DDE was seen as anything from black magic to a
new feature. (It was around 1987) In the end we found a couple of good ones, but it was hard.
That is not to say that there are no good Excel people in banks, but that most of them dont do
Excel as their main job, indeed the authorative text on Excel addins was written by someone now
working as a trader at Tradition.
MatLab
This is one of the most common IT skill we see on entry level CVs, which has an effect on its
value in the market. To be effective on your CV as a QD, you should make sure you understand
programming it to include GUIs and C++ addins.
One of the most

common answers to
the question what do
you wish youd known
when you started job
hunting? is C++
Market Data
It is hard to get good experience with real market data sources before you get your
first real job, but if you are doing a good specialist course in finance they should
cover this, and yes we see this as a test for whether it really is a good course for
those who expect to do a lot of development in their careers.
www.PaulDominic.Com
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Guide 2.0

Model Validation
As the name suggests you will be looking at the models and systems developed elsewhere to see
if there are any holes. You will be looking at the assumptions they make, and applying different
data sets to see if their model holds up in different market conditions to the ones that the creators
assume.
The overall model will be made up of a collection of component sub-models, and so part of the
work is to see what happens if you replace (for instance) the Hull-White Model for interest rates
with the Vasicek. It is not so much whether this is better but if the proposed business model
betrays very different behaviours then it throws open the question of whether it is robust enough
to be trusted with real money. Most banks have a set of standard models for this sort of
component and your work will include making sure that either this rule is obeyed or asking why.
In theory, model validation should include verifying that the code replicates the mathematics and
business logic. This is indeed what the banks
say they do, and the regulators are dumb or
The goal of Model Validation is to reduce model
lazy enough to believe them. The simple facts
risk, by looking at a range of market scenarios
are that in only a small minority of cases do
and identifying risk factors.
MV departments have the resources in time
and skilled staff to do this properly. To
validate a complex program requires skills as least as sharp as the person that wrote it, but sadly
MV does not pay anything like as well as front office work, and a depressing amount of software
testing in banks is not done by the A team, but instead include a large number of people who
couldnt cut it as hardcore developers, or who are busy getting their skills up to speed so they can
get a real job.
MV does have several attractions as a job. Although few roles in a bank can be classed as easy,
there is considerably less time pressure, and on average you can expect to work more reasonable
hours than in a front office job. It is very easy for people who give careers advice to assume that
money is the only motivation, but if you have a life, or want to acquire one then MV has a lot to
offer. The staff turnover is many areas is high enough that you can become relatively senior
simply by not quitting, and the nature of MV means that in bad times is hard to cut, and in good
times there is little pressure to lose headcount.
However to the higher parts of the MV food chain, its critical to get some direct experience of
front office and other parts of the business. This is where the look at your boss model of
predicting your career works rather well. Most heads of MV have pulled back from front office,
and are typically former quants or in some cases traders. This means that a gentle drift up to the
top is not very easy, unless you manage to get this experience. One reason for this is that you
must have credibility with traders and other kids of risk management, the sort that comes from
having done it yourself. Also you need to build judgement in what risks are worth taking, what
risks you should walk away from, and know when to run.
One solution to that is to get an internal placement into a related front office position to build this
experience. The smarter end of traders and quants recognise that a more informed MV group is
good for them, especially if informed means seeing the world from the saMe point of view.
The more cynical reader will of course see this as a possible route out of MV to a higher paying
job, but of course their manager probably has a copy of this Guide as well
www.PaulDominic.Com
Page 136
Guide 2.0
What TV Gameshows Can Tell US about Mathematical Finance

Monty Hall
This is one of the oldest Brainteasers dating back to a 1960s US TV gameshow. It goes like this:
You are asked to pick one of three doors, A, B, C. Behind one door is a Ferrari, behind the two
others there are goats. You pick a door, A, for example, and the host of the game show (Monty
Hall), who knows what is behind each door, opens another door, B, to reveal a goat. He then asks
Do you want to change your choice of door, from A to C? Is it to your advantage to switch? Or
should you stick with the original A?
This is a very subtle problem, the answer depending on the precise statement of the problem.
Since there has been so much written about this problem we shall here only mention the various
presentations of the problem and the corresponding results.
Warning: We know of one person who was asked about the Monty Hall problem in an interview
and who knew what we are about to tell you inside out. Unfortunately the interviewer was not so
well informed, he only knew the classical result. He refused to believe what the interviewee was
telling him, even though it was correct, an argument ensued and a job was not forthcoming.
Presentation 1: We are told that Monty Hall will always open another door after we have made
our choice, regardless of whether we have chosen the car or the goat. This is what is commonly
meant by the Monty Hall problem. In this case one should always change door when (inevitably)
asked. If you dont change then the odds are 1 in 3 that you get the Ferrari, if you do change, the
odds are 2 in 3.
Presentation 2: If Monty Hall opens a door and offers the chance to switch only when you have
first chosen the correct door (we are here assuming you want the car not a goat) then you should
never change because then you are guaranteed to lose.
In an interview situation the rules should be made clear right at the start. If they arent then either
the interviewer is being careless, perhaps doesnt know the problem in great depth, or is making a
double bluff assuming that you sort of know the Monty Hall problem and are making assumptions
you shouldnt. If very brave you could turn the tables on a careless interviewer, but then youll
probably end up like our friend above, so forget that piece of advice!
www.PaulDominic.Com
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Guide 2.0
How to Compare Multiple Job Offers

As youve probably picked up from the Wilmott.com forums, at P&D we frequently give one to
one advice on choosing jobs. Each person is of course a unique case, and so before you contact us
you should know that we almost never give a straight answer the form of this job is clearly better
than that one, since if it was that clear and simple you would not be asking for our input. Instead
we typically ask questions to help you make up your mind. We dont do hard sell in any aspect of
our business, its your life, and if youre smart enough to be a successful quant you only need the
help of our experience with fine details and awkward questions not a major personality upgrade.
There are however some general principles for this important dilemma in your life. Central to our
approach is to look further forward to the jobs you can do as a result of having done this one. This
operates in more than one dimension. The obvious parts are what you will learn, and what you
will be able to demonstrate that you can do.
History as a predictor of your

future.
One of the industry standard lies is that if you

take a job in model validation in a top investment
bank, they will bring you into a sexy front office
Stat Arb role. Its not true, and not even a good
lie. Most banks would rather have high staff
turnover than develop their careers.
Looking at people who have been taken on by

the firm is like looking out into deep space.
The further up and away you look, the further
back in time you are looking. You cant watch
a firm for 5 years to model the main sequence of career evolution, and more than even the most
patient astronomer can observe a billion year interval for a star.
It is a good idea to ask to meet the people who are roughly your peers, or a year or two ahead to
find out what people like you really spend their time doing. Of course this should be spun nicely,
as something like it would be great to meet the rest of the team, not I want to get the truth.
When looking at the levels above you, try to do some pattern matching. These people have done
well in this environment both from a skill position and their ability to work in that culture and
market. The first thing to ask is how much they resemble you. In some areas, the people running
things have quite different backgrounds from those on the front line. For instance, to be a good
manager in risk or model validation you ought to have experience on the trading floor, but if you
join that sort of department, you may find that going directly up the food chain very difficult.
Martingale Careers
Be aware that you are choosing the expectations people have of what you can do, since the
default assumption has to be that your next job will be some variant of your first. Sometimes it
can be quite difficult to get out of a track and into another. This means you should be quite
conservative about accepting jobs that seem to lead away from where you want to be.
Were not a charity.

At this point, a cynical type might be asking why we at P&D do this, and it is remarkably simple.
Not only are we nice people, but we recognise that if you can get multiple offers now, in a couple
of years time when you are still more valuable, wed like to be in touch. Short version is that we
are quite prepared to take the long view.
www.PaulDominic.Com
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Guide 2.0
Brand Name
The prospect of working for a highly prestigious firm can lead people to take an inferior job, just
because of the brand name of the employer. We know that may well be a rational trade off since
having a big name on your CV is a good thing, but it needs to be a reasoned choice.
When valuing a brand name, make sure that you are pricing it in the right market. This is simple
when the firm is well known as a pure investment bank, but many enjoy a high reputation because
they have a substantial retail operation which makes them better known, but this adds little value
to the aspiring quant who needs to focus on the quality of the investment banking operation. Just
because your target bank has a branch in your home town, doesnt mean they are wise in the way
of credit derivatives. Hedge funds are an important issue here, since DE Shaw, Citadel,
Renaissance, et al are often entirely unknown to many students, but are important well known
outfits in the eyes of those who you would
want to employ you later in your career, this is
It
The
is easier
most important
to upgrade
term
the in
quality
choosing
of bank
a job
that
is you
net
where you really need to go on the forums to
present
work
for,
value,
than
not
to
present
make
a
cash
radical
flow.
change
of
lane
check out the level of respect your future
from an area like IT to structuring or trading.
employer commands in the market.
If you are faced with a less attractive job at a more prestigious firm, you can use the job at the less
well known outfit as a hedge to try and get the bigger name to be more flexible. Once you have
decided that you can live without the job at the better bank, it is worth saying to them, that you
want to work for there, but that you have a better offer at the less prestigious firm. You can try to
get the bigger bank to see if they can find you a better job.
We will be entirely honest with you that this strategy is most likely to fail. However, it can work
sometimes, and in those cases is of huge value to your career. It is viable because you are walking
away from the larger bank, so you have nothing to lose. You need to frame this as a business
negotiation, not as some moral I deserve a better job, maybe you do, but that is not their
problem. By saying that you would prefer to work for them, you are using a little flattery, and
express your choice in terms of regret that it
wont work out this time. Try to put the
Since hedge funds have gained in
initiative with them, and ask if there is anything
size and credibility, banks have
they can do. Perhaps there is a better role in the
same area, or it is possible that they know a
found
themselves
competing
manager in a more attractive business unit.
directly for good entry level
people. This has led some

managers to push very hard the
notion that a mundane job at a top
bank is always better than any at a
less well known firm. This can
sometimes be so obviously wrong,
that the manager loses credibility
with the candidate, but sometimes
it is harder to tell.
The real situation is often more
complex, and we advise you to seek
independent advice if you have any
doubts.
www.PaulDominic.Com
Page 139
Guide 2.0

Or not
Even if this does not work, this is some of the most valuable business experience you will get. As
you progress up through your career, you stop being seen as someone who does a specific role
that is defined by their superiors, and more by how you negotiate what you will be working on.
This is an acquired skill, and here is a chance to start building it, especially as this is a situation
where there is not so much downside if you dont get it right. The time to mistakes is when it
doesnt cost you much, rather than when you are in a job negotiating with you boss.
www.PaulDominic.Com
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Guide 2.0

Highly Skilled Migrant Programme
The HSMP is a points based system for those intending to move permanently to Britain. You get
points for education, age, and how much money you have earned. There are currently no quotas
based upon country of origin. Although slightly bureaucratic it is scrupulously fair, but you
should allow time for the process to grind away.
To make the most of your HSMP, you need to make sure that you have every single piece of
paper that they will ask for, and if possible more than that supports each issue. In one case a
candidate we were helping, found that the British authorities would accept Indian pay statements,
but not British ones as proof of earnings. No, we dont know why either, we said fair, not
efficient. This was solved by acquiring copies of the relevant tax records. If your documents are
not in English you will need translations.
The HSMP is recognised by nearly all banks, and with a bit of prodding hedge funds and
consultancies can understand that this is the gold standard of visas. It is not dependant upon you
having a specific job, and after a number of years you get a full British passport.
The HSMP is actually treated in many cases as a form of academic qualification, since it means
that your background has been officially checked and found to be good, so you should make sure
that if you have passed, it is on your CV.
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Guide 2.

PAUL & DOMINICS GUIDE TO QUANT CAREERS

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

My Interview is in two days time

Dont read a textbook

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

Paul & Dominic Quant Recruitment

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

Why you shouldnt get a job in Quant Finance

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

How to write a good Quant CV

Start with a big list

should not include it in

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

Who is going to read my CV?

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

Almost no one will ever read your CV.

This is actually one signal we have seen for

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

Make sure you can be contacted

Get your CV checked

If you are doing a

At P&D we do read all CVs and where we spot a tragically

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

Lose them now

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

Make sure your CV is easy to read by getting a

Print out your CV, and

We see shading on some CVs, and although it can be useful for

(yes, we printed the guide...)

2005-2007 Paul & Dominic Ltd

Paul & Dominics Guide to Quant Careers

You can help set the agenda of your interview by

It is easy to get lost in that.

2005-2007 Paul & Dominic Ltd