What do quantitative traders do?
What are they doing all day?
Quantitative traders are financial market traders who implement and execute quantitative strategies. They generally do very little research and development themselves. Think less "candlestick charts" and more "Markov chains and stochastic processes."
Traders monitor the markets, execute trades based on strategies developed by the entire team (including quants and developers), and act as "puppeteers" to the models.
Quantitative traders form new ideas/strategies
Traders form new trading ideas and strategies through weekly meetings with operations managers. Traders propose ideas, which quantitative analysts and researchers then investigate.
These proposals pertain to model development progress, problems running current models, updating old models, back-testing models, model parameter tuning, and more.
The "true quants" dive into available datasets, create new ones if needed, transform data, and model new strategies. They assess profitability on historical data and consider risk profiles.
Quant developers (software engineers (SWEs) and machine learning engineers (MLEs)) work on making the model deployable into live production and make sure all the pipelines are available, ready to support, monitor, and risk manage the new model, and working correctly.
Quantitative traders test trading ideas/strategies
If everything is ready to go and all signs point to the model work, the model runs in a testing environment.
If it still looks good after running in the testing environment, then live testing begins over a short period with a small amount of capital.
When live testing happens, a quantitative trader will "babysit" the model while keeping their eyes glued to the markets. They work with the quantitative developers and quants to monitor the model and execute trades as the models run in real-time.
Quantitative traders run trading ideas/strategies
Once a model graduates, the traders execute what the entire group has designed, researched, developed, and deployed.
Quantitative traders work with others
From the above, getting a model across the finish line is a giant group effort. Developers, analysts, operations managers, researchers, and traders had a hand in getting the model into a live environment.
That’s all for today :) For more Quant Finance treats, check out our archives.
Stay quanty!
All the best,
Sebastian Gutierrez