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Algorithmic Trader Vs Quant Developer

Algorithmic Trader Vs Quant Developer

Posted August 28, 2020
Chainika Thakar

This article is all about discussing the algorithmic trader and quant developer individually as well as the relevance of their roles when combined together. We have discussed the main aspects of each such as the jobs where each can fit in, the salary, and how each role can be successfully achieved.

Let us find out all of the above mentioned things in detail, as this article covers:

  • What is an algorithmic trader and a quant developer?
  • What is the salary of an algorithmic trader and a quant developer?
  • Educational Qualifications
  • Difference in the job roles of an algorithmic trader and a quant developer

What is an Algorithmic Trader and a Quant Developer?

An algorithmic trader is the one who designs algorithms for generating trading signals as well as for placing orders in the financial market. Speaking of algorithms, each algorithm can be assumed to have access to current and historical prices of instruments. The decision to buy or sell is based on the computations performed by the algorithm with the help of the information of these prices. The algorithm may even split the order into small pieces and execute them at different times to get the best possible prices. We just discussed the core of algorithmic trading and what algorithmic traders do.

Nevertheless, if you aspire to become an algorithmic trader, this step-by-step guide can provide you with detailed knowledge.

Now, another profile we are discussing in this article is of a quant developer. This profession requires one to be a programmer who develops the solutions for quantitative finance and the quantitative trading industry. A quant developer is knowledgeable in subjects such as maths, advanced finance, algorithms, and data structures. A quant developer role usually fits the best for investment banks, hedge funds, brokerage services, and financial securities companies. Also, a quant developer uses complex mathematical computations and quantitative analysis so as to create algorithms for trading.

What is the Salary of an Algorithmic Trader and a Quant Developer?

Below, I have mentioned a list of average algo trader salaries which are specific to each country:

CountryAverage Base Salary
IndiaRs. 1,036,126
Hong KongHK$636,632

Source: Glassdoor

Next, I have listed down a quant developer’s average salary for each country in the following manner:

CountryAverage Base Salary
Hong KongHK$1,000,000

Source: Glassdoor

Let us now find out the educational qualifications of both algo trader and a quant developer.

Educational Qualifications

Although both algo traders and quant developers need programming knowledge, the educational qualifications may vary since an aspiring algorithmic trader will benefit more from subjects such as economics and finance.

Nevertheless, basic programming knowledge is also important for an aspiring algorithmic trader since it helps to be on the same page as the quantitative developer.

An aspiring quant developer, with regard to educational qualification, will benefit from a computer science degree as the particular role requires a professional level of coding knowledge.

A quant developer is required to code the algorithms for executing the trading strategies developed by algorithmic traders.

An aspiring quant developer, as well as an algorithmic trader, must learn a coding language, especially out of the most common ones such as Python, C++, R and Java.

Also, the knowledge of tools is required to become a quant developer since these tools help with backtesting and finalising the strategy for trading. Some of the general tools are BlueshiftQuant Lib, and JQuantLib.

Difference in the Job Roles of an Algorithmic Trader and a Quant Developer

Roles of both the algorithmic trader and a quant developer go hand in hand.

An algorithmic trader is responsible for designing the strategies and a quant developer is responsible for programming or coding the same.

Both the jobs are equally important and have some similarity in their skill sets since they both are from programming backgrounds.

An algorithmic trader is someone whose primary skill and expertise lies in trading and developing strategies. An algorithmic trader needs to be able to communicate the strategies with the quant developer so as to help code the strategies.

Quant developers need not always have their own strategies. They need to understand and adopt strategies to perfectly automate them.

Algorithmic traders are paid higher than quant developers because of the sensitivity of the job.

Nevertheless, an algorithmic trader has the knowledge of coding so as to be able to backtest its trading strategy. The backtesting gives an algorithmic trader an idea of whether the trading strategy is successful or not. Then the trader can implement the strategy based on some analysis.

A quant developer needs to be skilled at coding for being able to code the strategies of the algorithmic trader and convert them into algorithms.

This was all about the job role of an algorithmic trader and a quant developer and both thrive on the algorithmic trading domain which is growing rapidly.

Moreover, it is estimated that the market size in the algorithmic trading domain is expected to grow from $11.1 billion in 2019 to $18.8 billion by 2024. This was estimated by economic times recently and it also shows that there is going to be a lot more job opportunities in the algorithmic trading industry with the passage of years.

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