Matt Markham, now in his 3rd year of a Chemistry degree here at Edinburgh decided to do something a bit different recently and entered a "Quant" competition. He didn't expect to get very far but ended up coming 2nd in the whole of the UK. A great example of pushing yourself beyond your comfort zone and trying things out for size. You might want to think about doing something different too- after all, what's the worst that could happen?
- How did you hear about the International Quant Championships competition? My flatmate is a computer science student and he showed me an email he had received - It was a circular inviting students to take part in the 2019 International Quant Championship (IQC), organised by WorldQuant, a hedge fund which specialises in quantitative trading. I decided to give it a go!
- What is Quantitaive Trading? Quantitative trading is buying and selling of securities based on computer pricing models. The competition involved making, testing and submitting these models. Higher scores were awarded to ones that made more money, were consistent in their returns and traded with a lower frequency. The competition ran through exam season, ending just before my final exam.
- Was the competition time-consuming in the first instance? It seemed an interesting opportunity and so for the next few weeks I made algorithms, fitting the time in where I could in the evenings alongside revision for my second-year exams. It was only an hour here and an hour there initially but previous experience in similar areas allowed me to quickly become familiar with the platform. I’d previously used Quantopian a bit, a platform for creating trading algorithms using the Python programming language and had some other experience recreationally using Python.
- Were you expecting success? I ended up focusing more on the exams and the competition was at the back of my mind as the first stage came to a close, I assumed I hadn’t made it through, having only joined halfway through the competition. It wasn’t until a week or so later that I got an email through congratulating me on making it through to the second round. If I remember rightly it was about the top 200 or so teams from the UK had made it through to the second stage. This time I decided to really give it some effort.
- How did you prepare for the next stage? I picked up a book - The Intelligent Investor by Benjamin Graham, and crawled through investing pages on Wikipedia and Investopedia as well as using WorldQuant’s own learning resources to improve my knowledge base. For the next month or so, I committed to producing as many alphas as I could. Working a full-time job and using their platform, Websim, in the evenings. I slowly saw my score improve and I crawled my way up the leader board. When the out of sample testing had come through in the following weeks, I had moved through to sixth place on the U.K. leaderboard.
- What happened at the Final? The next challenge was to present three of my algorithm ideas to WorldQuant executives at the national final, held at the Lansdowne club in London. It was held on a Wednesday, which fell in the middle of a weeklong family holiday in France. With some apologies to my parents, I booked a set of return flights to London and put together some slides both before and during the holiday. The final was exciting, but I was quietly confident. I figured that most teams would get bogged down in the technicalities of the code they had written and that instead I should be focusing on the broader ideas which had inspired each algorithm. I had 3 slides, one for each algorithm. Each with a chart and almost no text to avoid the age-old trap of reading from the slides.The judges seemed to be impressed, and I was awarded second place.
- How did chemistry help? I think being a chemistry student helped me during the development process. The goal was to create algorithms that were unique in their approach and the first two years of my degree had provided me with analytical ability but allowed for a fresh perspective when thinking of original ideas for algorithms.Quantitative finance seems a natural fit to people working within chemistry. The degree focuses heavily on data analysis and this translates well to looking at pricing and stock data, as well as cultivating the manner of thinking required.
- What were the other contestants like? Most were economic students (some who now work at investment banks), as well as computer science, but also including a surprisingly high proportion of chemistry students.
- What next? There’ll be an IQC 2020. WorldQuant plans to advertise directly to chemistry students this time and it would be great to see more participants from Edinburgh.