<p>Sorry for this ignorant post, but aren't 'traders' and 'i-bankers' simply euphemisms for stockbrockers, sitting in the stock exchange with a screens and a telephone? Aside from being able to trade the firm's assets if you're really good, is there anything more to the job?</p>
<p>not at all ibankers are not any where near that</p>
<p>traders do not necessarily need to by on the floor, thats what computers are for. Not to mention many companies are opening more quant funds reducing some expense costs and utilizing only computers to monitor and trade. </p>
<p>Things to think about for the future</p>
<p>You mean they are moving towards algorithmic market making (significantly different from a quant fund).</p>
<p>actually i was specifically talking about quant funds, more so becuase the vangaurd and fidelity quants have been featured recently in many business articles. Thought it was something interesting to point out.</p>
<p>Now algorithmic market making i dont know much about, but i do know some people that are helping write the code at some quant shops.</p>
<p>And just to make sure, are you talking computer run portfolios that allow users to make some of the strategy decisions, but the comp does the trading. If so its something that doesnt interest me, niether do quant funds since i find the research that goes into the search for suitable investments interesting. Only benifit i see to comp assisted/run is the loss of all biases, greater ability to manage a more diverse portfolio, ability to monitor thousands of equities instantly, supposedly cheaper costs (well for assisted obviously it is cheaper, because of reduced brokerage costs etc etc, but for quant funds, the assets invested isnt high enough yet to bring expense costs down enough to compete with some of vanguards lower expense funds) but you lose the human mind. Now what fun would it be without that</p>
<p>I don't know if you know this but every investment bank, most of the major hedge funds and private trading firms run quantitative models in order to manage their entire portfolio. There is more than enough assets being managed by quantitative funds out there (Jim Simons' place manages everything quantitatively). It is simply impossible to conduct various strategies manually. Try putting out tens of thousands of orders per day manually, it doesn't really happen. </p>
<p>Mutual funds cannot conduct such strategies and are either A) index funds (aka vanguard), or actively managed funds. Using mutual fund research to broaden ones understanding of cutting edge investment procedures isn't wise either as most are still stuck a decade or two behind.</p>
<p>Also you simply don't compare something like Vanguard index funds to an actively managed portfolio. Vanguards are there to be passive investments which essentially tracks a specified benchmark. An actively managed portfolio seeks to beat that benchmark (alpha) which is a completely different beast.</p>
<p>Now when as you said reduced brokerage costs you are referring to algorithmic market making. This reduces costs as buy sides can place orders directly into the market making system reducing overhead, increasing efficiency, and decreasing commissions.</p>
<p>Traders don't trade for fun, they trade to win.</p>
<p>Some coding does go on at quant shops. Otherwise I would be very, very suspicious of any operation without one ;).</p>