Everything you want to know about Quant Internships
What quantitative finance internships entail and how you can find one yourself.
What does a Quant Intern do?
Quantitative Finance internships are highly coveted as the competition to land one can be quite fierce. These internships typically span 10-12 weeks, come with high compensation, and can often result in a full-time return offer.
At most quantitative finance firms, internship programs tend to be highly structured with the goal of intertwining learning opportunities with periods for deep work. Overall, the internship can be divided into the following three components.
Most quant firms don’t expect you to enter the internship already having sophisticated financial knowledge. Rather, the first two weeks will be geared towards ensuring you are up to speed with the financial concepts you'll use on the job. Oftentimes an intern will partake in courses on programming concepts (Python, SQL, Machine Learning, etc.) and Financial Concepts (market-making, arbitrage, hedging, etc.).
Near the end of the educational period, you will be assigned a large project to work on for the remainder of the internship. These projects typically mirror what a full-time quant may work on and will be the primary means for your performance assessment. The project can range anywhere from researching/investigating a new trading strategy to improving performance monitoring of existing systems.
Mock trading is common amongst quant firms as a way of helping build trading intuition and confidence. This often manifests itself in the form of dice/card games or an in-house trading simulation game. These events are often meant to be an intellectually stimulating yet fun way of developing your trading skills.
How are Quant Interns Compensated?
Quant interns tend to have the highest salaries amongst interns in other fields. While the exact number may vary depending on the firm, the top 10 highest-paying quant firms over the past year had an average salary of $130/hour. To put that into perspective, this totals over $270,000 a year. Needless to say, quant interns are compensated as if they're full-time employees.
Last year the top three highest-paying quant firms were Radix Trading, Vatic Investments, and Arrowstreet Capital. Not only did these firms over very high salaries, but they also offered large sign-on bonuses (over $10,000) and free food at the office.
Here is a table of quant intern salaries that were gathered from Levels.fyi
|Vatic Investments||$150||New York|
|Hudson River Trading||$128||New York|
|Jane Street||$120||New York|
|Five Rings||$120||New York|
|Susquehanna International Group||$100||Pennsylvania|
How to Land a Quant Internship Interview?
In order to land a quant internship you must first land the interview. While this may sound easy, it can often be more challenging than passing the interview itself. The three primary ways to land an interview, in order of relevancy, are as follows:
A referral is the surest way of actually landing an interview. Since the person giving you the referral already works for the company, there is an understanding that the person would only vouch for someone that they know would be successful in this role. Getting a referral, however, can be quite challenging. There are often headhunters that will reach out to students and share referrals with them, but often these students already have strong backgrounds.
Attending an Event
Attending a quant event is one of the most underrated methods for landing an interview. Each year, there are quant conferences, trading competitions, and hackathons that are held for students. Winners of these competitions often get direct interviews with the companies sponsoring the event. However, even if you don't place highly in the competition, students are given the opportunity to network with recruiters who are sent to these events on behalf of the sponsoring companies.
Applying for quant internships online is one of the most common ways of landing the interview, albeit the most difficult. When applying for quant internships online, the first step is to make sure your resume is optimized with the right keywords in order to pass the initial resume screen. Next, you should try to cast a wide net in terms of the companies that you are applying to. It's important to understand that many people will be applying for these positions, and therefore it is important to apply to as many openings as possible to maximize your chances.
How to Pass the Quant Internship Interview?
Quant internship interview questions tend to closely resemble the questions that full-time quants receive. In general, there are four categories of questions that you should be aware of.
Logic games are focused on assessing your ability to reason through a problem that you have never seen before. These questions force you to think creatively, clearly communicate your ideas, and demonstrate your perseverance. Oftentimes, these questions are referred to as "brainteasers".
Math questions consist of problems that assess your quantitative skills. These questions can range from mental math to statistics and expected value. For these questions, you're often in a position where you need to make estimations rather than arrive at the perfect answers.
Strategy games are problems in which you are presented with a game environment and are asked to figure out what the most optimal decision to make would be in this scenario. For these questions, you often have to think critically about the expected value of various actions. These questions hone in on your appetite for risk and reward.
Fermi estimations gauge your ability to reason about uncertainty. For these questions, you are often presented with a random situation and have to guess a particular quantity in that situation. For example, "How many airplanes are flying above the United States at this moment?". For these questions, the correct answer isn't as important as the reasoning that you provide.
Thank you for reading our article on quantitative finance internships. Feel free to check out more informative articles on our Quant blog.