quantitative finance

chasing the high score

when i first got to carnegie mellon, i had no idea what quantitative finance was, except that the companies came and gave out free food and free swag.

without questioning, i donned the citadel, hrt, jump, and jane street merch and gobbled up the food. in fact, these logos were so prevalent on campus that i thought it was a meme to see them.

the cmu poker club chip lol

come sophomore year, i started seeing my peers apply to internships and then saw on levels.fyi that these companies paid a lot more than any of the other tech companies. i was confused because i had never heard of them before coming here.

i saw their names at hackathons, and began to notice that the smartest people in my class chose their internships over others. it seemed like some sort of status symbol because it was so hard to get the internship. it must mean something if someone was able to get in, because it meant they bypassed a feat that most people couldn't.

it wasn't until this summer, and talking to more people who've worked in this field, that i realized what it was.

there's this trope that artists and game designers often use to portray a really sad trader. like how in disney's soul it references the lost souls, the stanley parable, job simulator, this short film on happiness, there's a lot of commentary on the human condition in how we've created this hamster treadmill for ourselves that we're aimlessly running on.

and it's easy to feed into this.

a couple months ago, i thought that if i really didn't have any passion for anything i should just do whatever makes the most money rather than pretending i really loved something i wasn't passionate about. and i was like 'yea if i played club penguin i'd rather just optimize for money, and go earn it in the easiest possible way to then go spend it and have fun with my friends in my free time.' i could have fun playing the minigames to earn money, but there was a certain point to where i'd get bored and then just go do the game that makes the most money with the least amount of effort. since that was my line of thinking, why don't i just go do something related to finance and only care about money when i wanted to make money instead of pretending i like something for money?

so i briefly decided to try to be a finance bro.

i got some intro to quant finance books and learned about how wall street worked, went to a poker tournament because that's where all the other finance bros were, tried my hand at doing some competitive programming problems. i had quite a few friends who did these as hobbies and we liked a lot of the same things so it wasn't really that difficult to ask them to get started. i didn't really get that far, but this short phase left me feeling really hollow.

i realized that the culture of trading was playing a zero-sum poker game on the world, it's intentionally sitting at table of poker players that are worse than you and swindling other's money. it's getting all the smart people to your team to make your decision so that the table is slightly more in favor of you. they say the robinhood story is to steal from the rich and give to the poor but i realized that there's this idea of stealing from the poor and blaming the poor for being poor, saying 'why didn't they go do this to be rich? that must mean i am smarter than them.'

should the optimal way to win the game be to optimize? should it be to make the score as high as possible? or would it be to realize when it's time to stop playing it, shut it down, take a step back and realize that there's a world outside the game, a world that is yet to be experienced?

though i never actually worked in quant, seeing it from this close was really formative. it made me realize what all the artists meant by how hollow a hedge fund manager's soul must be. it made me recoil as i read sbf's story because so many people i know are on their way to the same fate, rationalizing the amount of good input put in the world by giving money that is manipulated from others. then gaslighting others who are making less money and saying that they are making less impact because they are only selfishly earning enough for themselves.

money holds power, but i wonder at what point it becomes counterproductive in tracking transactions.

these days i have just been reading the history of banks, and more and more it just reminds me of everything that is going on in crypto, and how we often have to make the same mistakes again to reach realizations of our own no matter how much the history textbooks warn us. i.e. what’s going on with all the random shitcoins is really similar to free banking when there were private banks to issue and print their own banknotes before there was a centralized system. it's as if we have to remind ourselves that decentralization just becomes centralized once in awhile the hard way.

i do like money and learning about the history — especially debt, our idea of trading hypothetical money. some things i've been consuming that have been really good:

• money: the true story of a made up thing by jacob goldstein

• taming wildcat stablecoins paper

• debt: the first 5000 years by david graeber

• caps lock: how capitalism took hold of graphic design by ruben pater

• the future of the internet and how to stop it by jonathan zittrain