How To Get Your Dream Quant Internship


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It has been a little while since my last post. I have been very busy with interviews and the recruiting season. It has been quite a ride. I have interviewed with several firms as I had mentioned in my last post. I have narrowed down my offers to the firm I will be doing my internship at. It is a large European BB. I will get out more details later.The purpose of this post is to give out as many tips as I can as to how I believe a person can secure their dream internship. I am relatively new in finance but I worked VERY hard the last few months to attain my internship. I was lucky enough to have the option of having a couple offers to choose from.

So here are my tips…

1. Location – This is probably the most important thing. If you go to a school where there are strong placements you literally have to do absolutely nothing but show up to the interviews since your career services takes care of the rest. But if you don’t goto a target school then you have to be in New York. There are many that will say Chicago is a good alternative but your choices are basically restricted to prop firms.

There is very few BB trading happening in Chicago. It literally comes down to New York or nothing. The proximity to New York is the most important. So pick a school in New York City or in the tri-state area. If you get into Harvard or Yale or any of the target schools then it doesn’t matter where you are, but if you don’t, be as close to NYC as possible. I have found this to be VERY effective.

During my first four months in New York I went to almost every finance conference I could find. Many conferences will let you in as students. But more about this in next tip..

2. Networking– This has been my strongest suite. I have networked networked networked like a maniac over the last eight months. As I mentioned during my first four months in New York, I went to as many conferences as I could find and talked to everyone I could. I tried to get as many business cards as I could get and tell as many people my name. I made my own custom business cards and basically gave them to everyone I could meet. I tried to speak to everyone, big or small. I spoke to John Hull, I spoke to a tech analyst at a small hedge fund. I did not leave anyone out.

My motif was to get my name across to as many people I can in finance. I had built up a good database of emails after a while that I used later on for internship requests.  I made a lot of good friends during this period too. I would say the friendships and the mentors I have built during this period are the most valuable to me. I am able to call Managing directors of large banks (CS, JPM, GS) hedge fund traders, private equity portfolio managers and quants my friends.

People might say, “I don’t have the money to go to all these conferences.” I have taken significant loans to pay for my schooling. Even though I go to Baruch where tuition is low, I live in midtown Manhattan and my cost of living is high. I chose to live in manhattan since I wanted to be in the middle of it all. I did not have money to goto conferences. My loan was just about enough to pay for tuition, food and rent. I literally was eating less so that I could save money to go to conferences. I was emailing the conference organisers and pressuring them into giving me significant student discounts so that I could attend. You have to make sacrifices. I did, and it was all worth it now. Be pro-active.

3. Applying – Many people say applying online does not result in much. This is not true. It does have a very low probability of working out into an interview but there is a chance that you might get called for an interview.

My friends have got interview calls from Goldman, UBS and JPM by just applying online. I myself have got interviews at two large hedge funds and a big bank by just applying online and having no connections inside. So, take the time and work on your applications and apply to AS MANY companies as you can. You apply to 100 firms and maybe one of them will hit, so apply to as many as you can.

Quantnet maintains a list of firms with quant internship positions.

4. Be Flexible – Everyone wants to be a trader and become rich overnight. That is most likely not going to happen. Even if you want to be a trader it won’t happen for a very long time. But there are possibilities that it might. Be flexible in terms of what you want to do. Risk management is an area of big growth right now. It will be a lot easier to get full-time offers if you do internships in risk management compared to Sales and Trading.

If you are so fixated on money, trust me you can make a good living in risk management. One of my friends is working at a large bank in their risk management group and is a fresh graduate of an MFE program and has been working for almost a year now and his total compensation for this year was around 120K. I think that is pretty awesome. So be flexible, and look into risk management, technology and analytics and don’t just be fixated on getting trader jobs.

5. Knowledge– No one is going to ask you to code a finite differencing scheme during your interview or to solve stochastic differential equations. Here are some basic things you MUST know before going to ANY interview. These are things you should know in GENERAL even if you don’t go to an interview as it could come up during a conversation at a conference or event.

  • Black-Scholes – You must know black-scholes like the back of your hand. It has come up in EVERY interview I have had. You should be able to derive the BS equation by ATLEAST one method. Wilmott’s FAQ book has 12 methods.
  • Greeks – You should be able to say exactly what happens to the Greeks when variables in Black-scholes are manipulated.
  • Bond – Know how duration and convexity work and how they are used in portfolios. You must know absolutely how yields work.
  • You must know these values:
  • S&P Index Dow Jones Index
  • Stock of the company
  • Market Cap of the company
  • Fed Funds rate
  • 6 month, 10 year US Treasury Yields
  • 10 year Bund Yield
  • WTI Oil
  • Coppe
  • Latest Employment Data
  • Always be ready to pitch a stock. This is VERY common in Sales and Trading interviews. Be ready to pitch a stock with accurate price target and reasoning behind it.
  • Read the WSJ or FT as often as you can. Know what Bernanke has said the day before.
  • Product knowledge – In internships you are not expected to have a significant amount of product knowledge. You should the following products:CDS , IR swaps, Vanilla
  • Options(European and American), Asian options, Barrier options, Corporate Bonds, MBS, CDO, Index’s , Equity, Futures, Forwards
  • VIX

At the end of the day, what I have noticed is that most of the decisions made for finance positions are purely based on fit. If you answer every answer wrong, but show strong enthusiasm and personality, you will probably get the job. It is all about communication.

This post originally appeared at Quant Network.