Going into finance after physics PhD

In summary, the conversation discussed the prospects of a physics PhD pursuing a career in finance as a quant, as well as the necessary skills and knowledge required for this field. It was mentioned that knowledge of probability, PDEs, and programming languages such as C++ are important, as well as having a background in statistical mechanics, fluid dynamics, and brownian motion. Recommended literature for this career path includes books by Shreve and other authors on stochastic calculus and arbitrage theory in continuous time. It was also noted that economics knowledge is not required, and that the books do not need to be read in a specific order.
  • #1
EL
Science Advisor
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I have seriously started considering going for a career in finance (as a "quant") after finishing my PhD in physics (theoretical astro/particle physics).

Anyone who knows what the prospects for getting good jobs in finance (Europe or US) as a physics PhD looks like today? After the "rocket scientist" boom on wall street starting something like a decade ago or so, what is the situation now? Are physicists still as sought-after?

What kind of merits are typically important in the eyes of the employers? How much knowledge in pure economics is typically required? What kind of physics knowledge is required/preferred?

Of course my above questions are very general, and I cannot expect anything but very general answers, but my hope is that someone can give some advice out of their own experience.
 
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  • #2
What do you know? I'm doing my PhD in experimental astroparticle physics. Anyway I'll be watching this thread closely. Never hurts to have as man employment options as possible.
 
  • #3
They still hire physics PhD. However it is important that you have knowledge of probability (stochastics analysis, martingales, etc) and PDEs. Also it is preferable if you know C++ and other languages. The books by streve is a very good indication of what technical skill you would need for quant.
 
  • #4
Surprisingly, they also look closely at your area of research. From what I've read over at wilmott.com, statistical mechanics/fluid dynamics/brownian motion is highly sought after because of the similarities to the stock market.
 
  • #5
leon1127 said:
They still hire physics PhD. However it is important that you have knowledge of probability (stochastics analysis, martingales, etc) and PDEs. Also it is preferable if you know C++ and other languages. The books by streve is a very good indication of what technical skill you would need for quant.

Good to here. Do you have personal experience from finance?
Could you (or anyone else) please provide a link to these relevant books by Streve?

If someone has more suggestions of quant litterature suitable for physicists, please let me know!
 
  • #6
zhentil said:
Surprisingly, they also look closely at your area of research. From what I've read over at wilmott.com, statistical mechanics/fluid dynamics/brownian motion is highly sought after because of the similarities to the stock market.

Nice! Looks like an interesting website.
 
  • #7
arunma said:
What do you know?

At the moment, not very much at all...but I have almost two years to do some reading before I'll finish my PhD!

At first I just started to think of this option simply because of the bad employment situation in the research community: it's hard to get a top, or even decent, position anywhere (and probably it will get even harder now that both US and UK are cutting down the fundings severely), and even if you do, the position is often limited in time and the sallary basically sux. On the other hand I love to do physics research, but I won't do it for whatever price. Now that I have started to look more into finance I have actually noticed I find it very interesting. There seems to be a huge amount of untouched data to analyse (e.g. from the stock markets).
 
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  • #9
EL said:
Good to here. Do you have personal experience from finance?
Could you (or anyone else) please provide a link to these relevant books by Streve?

If someone has more suggestions of quant litterature suitable for physicists, please let me know!

https://www.amazon.com/dp/0387401016/?tag=pfamazon01-20

I am actually in some computational finance programme near NY. I believe that the employment of master student in this kind of programme will be bad in next one-two years. It is because many universities are developing such programmes while there aren't as many positions for master student. For example, my university's programme triple the size from last year. PhD is not restricted to this trend because there aren't as many PhD around as Masters.
 
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  • #10
George Jones said:
http://latticeqcd.blogspot.com/2006/02/interview-with-matthew-nobes.html" [Broken] went from a posdoc at Cornell to life as a quant.

Interesting. Thanks.
 
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  • #12
EL said:
What about Stochastic-Calculus-Finance-I? Do I need to read that before nr II?
Of course. One of my friends was actually accepted into the CMU program that Shreve directs. He is certainly the best-known quant finance professor in the US. Another book to check out would be Arbitrage Theory in Continuous Time, and any number of fantastic books on stochastic differential equations.
 
  • #13
Thanks for the suggested litterature. Do you have any idea of what math and economics knowledge is required to read Shreves books?

Everyone, please feel free to inform me about appropriate litterature!
 
  • #14
EL said:
Thanks for the suggested litterature. Do you have any idea of what math and economics knowledge is required to read Shreves books?

Everyone, please feel free to inform me about appropriate litterature!

They should be in your library. One is discrete time which is less relevant for your situation. Continuous time is the case when all the important probability comes into the play. You need to know calculus and probability really. No economics is required.

YOU DONT need to read 1 before reading 2. I even suggest reading 2 directly right after knowing discrete time martingale.
 

What career opportunities are available in finance for physics PhD graduates?

Physics PhD graduates have a wide range of career opportunities in finance, including roles in quantitative finance, risk management, data science, and financial analysis. These roles require strong analytical skills, problem-solving abilities, and a solid understanding of mathematical and statistical concepts, making physics PhD graduates highly desirable candidates.

Will my physics PhD be relevant in the finance industry?

Absolutely! A physics PhD demonstrates a high level of quantitative and analytical skills, which are highly valued in the finance industry. The ability to think critically and approach problems from a scientific perspective is also highly transferable to the finance industry.

Do I need to have a background in finance or economics to get a job in finance after my physics PhD?

While having a background in finance or economics can be beneficial, it is not a requirement to enter the finance industry. Many employers value the diverse skillset and unique perspective that physics PhD graduates bring to the table. However, it may be helpful to take some courses or attend workshops to gain a basic understanding of finance and economics concepts.

What skills do I need to develop to be successful in a finance career as a physics PhD graduate?

In addition to strong analytical and problem-solving skills, communication and teamwork are important skills to develop for a successful finance career. It is also important to have a good understanding of financial markets and products, as well as the ability to use financial software and programming languages.

How can I make the transition from physics to finance after my PhD?

To make a successful transition from physics to finance, networking is key. Attend career fairs, reach out to alumni in the finance industry, and join professional organizations to expand your network and gain insights into the industry. It is also helpful to gain relevant experience through internships or part-time positions in finance-related roles. Additionally, highlighting transferable skills and experiences on your resume and cover letter can help make you a more competitive candidate for finance positions.

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