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Buy Side vs Sell Side Quants - Which is right for you?

For a career in quants, it’s vital to know the distinction between the  Buy side and Sell Side beyond a superficial definition. While both overlap, there are also distinct differences, thus, both sides require different types of quants.



Buy-side vs Sell-side Roles


In general, the sell-side features institutions who develop and sell securities while on the buy-side, institutions invest in buying securities for Money Management or Trading



Sell-side tends to feature banks and firms producing + selling securities for clients. For buy-side, market participants tend to be hedge and pension funds. There’s more hierarchy on sell-side whereas buy-side tends to be flatter, structure-wise.


For quants, the sell-side tends to focus on more formal math & favours mathematicians/physicists. For the buy-side, quants tend to have degrees in actuarial science, computer science (CS), and even economics (focusing on modelling).



On the buy-side you’ll often see quants in research roles with asset managers, hedge funds, etc. They tend to oversee risk and generate returns. They also play a role in investment and trading decisions pertaining to securities, and need to manage PnL generation. For the sell-side, quants are often involved in selling research and reports to the buy-side, which can influence investment decisions.



At present, many professionals have been more keen on buy-side quant roles, with a number of sell-side quants switching to buy-side. This is due to both the salary and the appeal of the sector. Several proprietary firms and hedge funds are changing by switching to Quantitative Investing, with a sharp growth occurring in systematic trading research.



Compensation 💰 


For entry-level positions, salaries tend to be similar for both sides at around $80K to $120K. Senior positions tend to earn more on the buy-side, with a hedge fund manager’s salary potentially reaching millions of dollars when considering bonuses. Sell-side tends to have a ceiling.



Skills and Qualifications 👩‍💻 


For quants, regardless of side, there is a focus on more math/technical degrees. Some roles may require you to have Master’s degrees and researchers are often required to have a Ph.D. In fact, having a Master’s degree in Financial Engineering from a prestigious program is often sought after on the sell-side.


Buy-side quants tend to rely more on empirical branches of maths, like ML, whereas sell-side quants tend to rely on stochastic processes.



Which one should YOU go for❓ 


Based on your degree and interests, If you have a strong background in maths and enjoy diving into research, the sell-side may be a good fit. If you have a CS background and enjoy the idea of profit generation, buy-side may work for you. Ultimately, you need to consider your skills, background, and longer-term goals to decide which is best for you.


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The global quant trading academy programme is open for the Fall 2024 applications.

Asia Quant Academy will only be enrolling 30 students for the Fall 2024 Cohort till 12 July 2024.

Submit your application directly through our website https://lnkd.in/gfm3GsK6

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