How to get started with a career in Algorithmic Trading, Quantitative Finance

If you are fascinated with the world of Finance, Trading and love Coding or Mathematics you probably might be wondering how could I enter this multi-billion dollar industry of Quants?

Let’s get some fundamentals clear and bust some myths:

• You don’t have to be a World Class Programmer for being best at this
• Also you don’t have to have a PhD in Math or Stats

Now, I would provide insights into what I have learned in past 2 years about best ways of learning Quantitative Finance

Basically what you must have is love for fundamental math, basic understanding of Probability & Statistics, intermediate knowledge of some Data Science language like Python or R along with basic knowledge of different instruments of Investments(like Equity, Options, Futures) and 6 months of dedicated efforts i.e. “Burning Desire” of continual learning !!

What level of knowledge is required before going in for a job?

1. Mathematics & Statistics: Probability Axioms, Distribution Statistics, Random Processes, Random Walk, Markov Chain, Martingale, Geometric Brownian Motion, Stochastic Calculus
2. Financial Engineering: Normal & Lognormal Distributions, Binomial Lattice Pricing, Derivative Pricing, Fixed Income Pricing, Black Scholes Model, Option Greeks
3. Programming(I use Python): Basic Data Structures like List, Dictionary, Classes and Advanced Data Structures like Binary Search Tree, Stacks, Queue, Some Data Science Libraries like NUMPY, Pandas, MatPlotLib

But I just said Basics of Math, Stats, Coding…

How is this possible??

Basically you need to have access to proper learning materials and a proper timeline to follow that is really difficult to obtain without having spent a ton of Time and Money Resources.

You should start with Math & Stats part

1. Stochastic Processes: Theory for Applications by “Robert G. Gallager”
   Its Chapter 1 introduces you to important and relevant concepts of Probability Theory that is quintessential as a base for further understanding.
2. Stochastic Calculus and Finance by “Steven Shreve”
   Its first two chapter could be used for solidifying Probability Theory learned in Part 1.
3. NPTEL Lectures on YouTube by Prof. Joydeep Dutta of IIT Kanpur
   Link: https://www.youtube.com/watch?v=732bzOEhQpM&list=PLEYrMI37wMbplhGJmqhlYv0VUSwC6zMsU
   This contains 20 Lecture series of around 40 minutes length.
   This should be followed along with references in “Steven Shreve’s” book

While doing this NPTEL Course you could work on you Programming & Data Analysis skills

1. codebasics YouTube channel:
   Data Analysis: https://www.youtube.com/watch?v=q_BzsPxwLOE&list=PLeo1K3hjS3uuZPwzACannnFSn9qHn8to8
   DSA: https://www.youtube.com/watch?v=_t2GVaQasRY&list=PLeo1K3hjS3uu_n_a__MI_KktGTLYopZ12

• Jupyter Introduction: 1 Hour
• NUMPY Library: 1 Hour
• Pandas Library: 6 Hours
• MatPlotLib Library: 1 Hour
• Data Structures & Algorithms Basics: 3 Hours for Advanced DSA Topics

Now, comes the final step Financial Engineering Topics

1. Very Important Coursera Course:
   Financial Engineering and Risk Management Part I and Part II by Columbia University(You could apply for Financial Aid from India)
   This would provide Basic Understanding of Different Concepts being used in Quantitative Finance in Pricing
2. IIT Bombay Course SI527: Introduction to Derivative Pricing by Prof. S. Baskar. The concepts not properly understood from Coursera course could be studied again from this course which heavily focusses on Theoretic Aspects of Derivative Pricing
   YouTube Link: https://youtube.com/playlist?list=PLjAj1Z92T7LTcyjV-Di2_a4mij9_5fKkM
3. Option Volatility and Pricing: Advanced Trading Strategies and Techniques by “Sheldon Natenberg” This is Very Important Resource for Practical Understanding of Trading Strategies and Option Greeks which is used as a reference in Trading Industry: All chapters are important but to start with Read from Chapter 6 –12 with a special emphasis on Chapter 11 & 12 which talk about trading strategies.

Now, all you need is a good project and a good resume to showcase your knowledge level and skills. We would touch upon these topics in next posts.

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Thanks for reading! My name is Shreyas Sarda, I’m a Trader who has gone through this arduous journey.

Please feel free to contact me:

• LinkedIn: www.linkedin.com/in/shreyassarda
• Twitter: https://twitter.com/shreyas_sarda