If you’re getting ready for a quantitative job interview but don’t know what to expect, this chapter will tell you what kinds of questions you can expect. Building on this, the next chapter will give you introductions to Mathematical Finance, Econometrics, and Statistics. These will cover some basic topics that all people who want to become Quantitative Analysts should know.
There are a lot of questions in this chapter that have nothing to do with quantitative finance. However, they are designed to test your ability to think through quantitative problems. As you can see from these questions, being a good Quantitative Analyst isn’t just about knowing a lot of complicated formulas. Rather, you need to be able to think on your feet, and these questions test that ability.
It’s likely that most of the questions you’ll be asked in the interview will have something to do with math, statistics, econometrics, or programming. Â Think of interviewing as an opportunity to demonstrate how many skills you have accrued in these areas. If an interview question covers a topic you have never heard of before, don’t worry about it. The point is not to show that you know everything. It’s to show that you know a lot and can use what you know. Focus on your answers, but don’t forget to include relevant techniques you might use to solve a problem. Also, be ready to explain how you’d use these techniques.
Hereâs an example. Are you being asked to figure out how much a customized stock option is worth? If so, talk about how you would figure out its value and how you might use a Monte Carlo simulation to guess what prices will be in the future. (What kind of drift and volatility process will your simulation use?) Remember that you should be ready to explain any idea you bring up in a conversation in full. Do not use the terms “Markov process,” “risk-neutral measure,” or “Bayesian inference” unless you can clearly explain what they mean. In the event that you fail to answer a specific question correctly, you may be able to redeem yourself by discussing other ideas you are familiar with during the interview.
Also, don’t be afraid to ask questions! A well-thought-out question about how something is modeled, how portfolio risk is calculated, or how an asset is valued can show that you are the kind of employee who will be interested and willing to go the extra mile to find answers or make a process better.
As a recent graduate with a passion for markets and mathematics, I know firsthand how coveted and competitive quantitative trading roles can be These jobs sit at the lucrative intersection of finance, technology, and analytics, so they attract scores of ambitious applicants. But while the potential rewards of breaking into algorithmic or high-frequency trading are immense, the interview gauntlet is intense
Fortunately, with the right preparation and insight, you can set yourself up for success when interviewing for these highly-specialized positions. I spent months analyzing real interview questions, researching common technical tests, and gathering study materials to create an ultimate guide for quantitative trading interview prep. Consider this your insider source for acing the quant interview process!
In this comprehensive article, I’ll share:
- The types of questions to expect
- How to master the key technical skills assessed
- Tips for writing flawless coding samples
- Strategies for communicating your qualifications
Arm yourself with this intel, and you’ll navigate interviews with the confidence needed to land top trading roles. Now let’s break down what these interviews entail and how you can ace every stage!
Common Quant Interview Question Types
While each firm has its own style, most quantitative trading interviews evaluate a standard set of skills and knowledge areas. Expect questions like:
Math and Probability
- Calculating probabilities, combinations, and expected values
- Identifying trade-offs and formulating optimization problems
- Analyzing risk-reward ratios for strategy decisions
Programming and Coding
- Algorithms and data structures (recursion, trees, graphs, sorting)
- Object-oriented design and architecture
- Writing clean, efficient code to solve math/logic problems
Financial Markets and Trading
- Understanding mechanisms and microstructures of markets
- Explaining arbitrage opportunities and market-making strategies
- Assessing risks and returns of financial products
Brain Teasers and Puzzles
- Logic questions and complex word problems
- Estimation challenges requiring quick mental math
- Riddles probing analytical thinking and creativity
They’ll also ask directly about your interests, qualifications, and motivations for pursuing this career path. Be ready to articulate your background knowledge, share trading ideas, and demonstrate your aligned passion!
Mastering the Key Technical Skills
While you can’t predict every curveball question, you can enter interviews fully prepared in the core skill areas.
Probability and Statistics
Probability is the foundation of measured risk-taking and expectancy, so brush up on calculating combinations, binomials, Bayes’ theorem, and other probability distributions. Know the formulas and concepts cold, and practice applying them to trading scenarios like expected payoffs, win rates, and statistical significance testing.
Equally vital is a command of statistics – hypothesis testing, regressions, parameter estimation, and distributions. Study up on concepts like p-values, standard errors, Pearson coefficients, and how to interpret results.
Quantitative Finance Models
Dive deep into the classic quantitative models like the Efficient Market Hypothesis, Capital Asset Pricing Model, Black-Scholes Option Pricing, binomial trees, and the Greeks (delta, gamma, theta, etc). Understand the assumptions and mechanics behind these models and how they’re applied in algorithmic trading systems.
Coding Fluency
Expect coding challenges and be fluent in languages like Python, C++, Java, or MATLAB. Review data structures, algorithms, and design principles. You’ll need to write clean, efficient, well-commented code on the fly.
Practice coding algorithms for sorting, searching, graphs, dynamic programming, and combinatorics. Brush up with resources like LeetCode, Project Euler, and Quantstart programming drills.
Mental Math and Estimations
Traders make snap judgments, so get comfortable with quick calculations involving fractions, percentages, ratios, and approximations.
Drill mental math across statistics, probability, and finance concepts. Estimate things like standard deviations, expected values, confidence intervals, Sharpe ratios, arbitrage profits, and transaction costs. The key is worked examples and repetition.
Crafting Flawless Coding Samples
Many firms require submitting coded solutions to screening challenges before interviews. Treat these like short thesis projects showcasing your programming, statistics, and financial modeling skills.
Aim for 3 robust coding samples illustrating your capabilities across:
- Core programming principles
- Statistical analysis and modeling
- Financial concepts and applications
Showcase skills like function optimization, OOP design, Monte Carlo methods, portfolio modeling, risk metrics, and backtesting systems. Comment extensively, document assumptions, and highlight key steps.
ABOVE ALL: Ensure your code is flawless, efficient, and produces the correct results! Triple check your work.
Communicating Your Qualifications
Now let’s prep you to nail the qualitative aspects of the interviews. Convey your motivation, demonstrate aligned competencies, and emphasize your potential for contributing from day one.
Discuss Your Interest in Trading
Articulate what draws you to markets – the complex systems, the data-driven decisions, the thrilling pace. Share any trading experience you have, even just paper trading or simulated portfolios. Explain the aspects of the job that excite you and don’t be afraid to show enthusiasm!
Highlight Relevant Coursework
Don’t just list classes on your resume – discuss them! Explain how your economics, statistics, programming, and math major courses equip you with the foundations to thrive in this field. Translate course projects into real-world applications.
Provide Examples of Relevant Skills
Extract tangible examples of skills needed for the role from your past internships, research, or extracurriculars. Frame academical and analytical projects in terms of core competencies like data analysis, critical thinking, and modeling. Leave them in no doubt that you can create value from day one.
Ask Insightful Questions
Ask smart questions about their proprietary models, trading strategies, and risk management protocols. Inquire about key technologies they leverage and challenges of electronic trading. This shows genuine curiosity and interest.
Express Your Passion
Most importantly, communicate your passion! Convey your dedication to mastering complex models, your thirst for analytical challenges, and your long-term drive to succeed in this competitive industry. They hire for attitude and aptitude, so demonstrate both unequivocally.
Ace the Quantitative Trading Interview – Recap
In this comprehensive guide, we covered how to:
- Anticipate and prepare for common quantitative interview questions
- Master key technical skills like statistics, programming, and mental math
- Write flawless coding samples to showcase your abilities
- Effectively communicate your qualifications and passion
With diligent study, practice, and a strategic approach, you can land your dream quant trading job. You’ve got this! Now go into those interviews armed with the confidence to prove you have what it takes to think on your feet, code like a machine, and thrive in the world’s most frenetic markets.
I’m rooting for you to launch an incredible trading career – you deserve it!
Basic Personality/Standard Interview Questions
In any interview, expect the hiring manager to request that you âwalkâ them through your resume. This question may come up because the interviewer didn’t have time to look over your resume before meeting you. Or, he or she might want to see what parts of your background you choose to talk about and how well you can communicate. You have the chance to show why your past work experience makes you a good fit for this job. Â Emphasize any classwork, projects, work or teaching experience that is relevant to the Quant world.
Keep in mind that when answering non-technical questions, it’s not just what you say that matters—how you say it is exactly as important. Are you sure of yourself? Can’t think of what to say? Be quick on your feet, but also think things through.
Some other questions in this area might include:
- Please tell me something about yourself that isn’t on your resume.
- What is the riskiest thing you’ve ever done?
- Are you more risk-averse or risk-seeking? Give me an example.
- What is your greatest weakness?
- What do you think about getting up early or staying up late?
- What are your interests outside the classroom/office?
- Why should we hire you?
- What is your favorite class that you took?
- Which person has had the most impact on your life? Name someone you’ve never met but who has had a big impact on you.
- Tell me about your worst mistake or a hard time in your life.
- Discuss a difficult ethical decision you recently faced.
- Whatâs the last book you read?
The quant trader interview guide
FAQ
What questions are asked in a quantitative trader interview?
How hard are quant trading interviews?
What is a quantitative trader job interview?
A series of interview questions that may appear in quantitative trader job interviews. Quantitative trading interviews typically consist of a series of brainteasers/puzzles, mental math questions, and statistics problems.
What questions should you ask in a quantitative trading interview?
Because quantitative trading encompasses different disciplines, the interviewer can ask a wide variety of questions from mathematics, probability, finance, and programming. Thus, make sure to refresh your memory on these topics before heading into your interview.
How many interview rounds are there for a quantitative trading position?
There may be multiple interview rounds for your quantitative trading position, but the questions asked can be sorted into one of three phases. The first of which is the technical interview. These interviews dive deep into your qualifications and knowledge.
What is a quantitative interview?
A quant interview, or quantitative interview, is one in which the interviewer asks questions to assess your quantitative analysis skills. An individual applying for a position as a quantitative analyst or another role that involves highly developed quantitative skills may encounter this type of interview during their job search.
