Whatever your field of study, I think it's important to not get too hung up on where you are in your career today. Using networks, it also becomes possible to understand how the use of leverage by competing institutions can push a market network towards financial collapse and to assess which institutions are systemically important. Now if you love physics … A simple system might be a gas, in which case the components would be the constituent molecules. A Physics degree is considered a huge asset as it is highly quantitative and common perception is that it is associated with smart people. Of course, Caltech obviously wasn't the easiest place to study, and there were times when I had my doubts about whether I could do it. By then, I was convinced I could contribute more to developing derivative markets in finance than fusion energy. Learn the Lingo. Sat 20 Jul 2013 19.05 EDT Metallurgist 6. As a particle physicist, I work with systems containing just a few particles and because the number of particles is not too great I can keep track of the ways they can interact with one another. If you are interested in a career in finance, there's no … It's not necessarily all about preventing people from losing money. By backing away from the near-impossible challenge of understanding a complicated system in every detail, the strategy is instead to focus on the more modest goal of computing the odds that the system will behave in a particular way. As long as you are learning and being challenged, you will be OK. This is because employers place high value on the analytical, technical and problem-solving skills that physics … Thus, an associate physics degree will usually be a steppingstone into more advanced study. Whether you go into finance or academia, you're not going to work on the same problem for the rest of your life. Operational researcher 6. I took my first class in bond math and I thought it was really mundane and uninteresting. The paper was set in the context of population stability in ecological networks and, in simple terms, it is the idea that by complicating matters we increase the numbers of ways something can go wrong. After I graduated from Caltech, I went to MIT to continue my studies in physics, and a couple of things happened. The No. I had actually finished all the second-year requirements for an MBA already, so that made total sense. I applied and was accepted. The most famous equation in finance was published in 1972 and is named after American economists Fischer Black and Myron Scholes. J.P.Morgan had an opening for an exotic derivatives trader, so I moved over there. Difficulty: Low. Intellectual connections such as these are why so many physicists are interested in problems in finance and, in part, why so many have been recruited into the financial sector. While I was helping to rebuild the machine, I continued to take business classes. That epiphany got me really interested in derivatives, which are a type of financial contract that can be traded, and I ended up taking a slew of finance classes over the next two years while I was working on my physics degree. This was a crucial insight and provided one of the earliest convincing confirmations of the existence of atoms. We had a lot of freedom to innovate and we came up with a lot of creative products. A physics degree is also excellent preparation for a variety of careers that seemingly have nothing to do with physics, such as careers in finance and marketing. I must say it was a lot of fun. At Caltech, we pushed ourselves so hard, there isn't anything I face today that challenges me to the point I say, "I can't do it." From Physics to Finance. The transition to Wall Street was pretty straightforward. © 2020 Guardian News & Media Limited or its affiliated companies. It is a little bit of a roundabout story. One such insight is that the greater diversification of risk might actually increase systemic risk, not decrease it, as one might naively think. Actuary 2. Jobs directly related to your degree include: 1. In physics, I was part of the Alcator C-Mod project, which was a big U.S. Department Of Energy-funded fusion reactor. A physics degree is also excellent preparation for a variety of careers that seemingly have nothing to do with physics, such as careers in finance and marketing. One day, a professor suggested that I should get an MBA in finance, which I could do under MIT's one-tuition policy. Applications developer 3. In 1994, I finished my business degree, and in 1995, I graduated with my PhD in physics. According to a report published last year by the Institute of Physics, of those in employment one year after graduation, a job in "finance" was second only in popularity to a job in "education". 0 When I came to Caltech, my intention was to study physics. Higher education lecturer 5. Precisely the same ideas are used to model the financial markets, in which case the "system" could be the price of an asset and the "components" would then be the range of things that can influence its price. At the time, Wall Street was at the tail end of a hiring spree for technical people to work on derivatives and options—another type of financial contract—and I got offers from almost every bank on the Street. In the following years, I also worked at Goldman Sachs, Deutsche Bank, and Merrill Lynch, where I ran several different lines of business. Today, Luke oversees risk management for Alphadyne Asset Management, a $4.5-billion investment management firm with offices in New York, London, and Tokyo. At MIT, you have to take a minor in another field, and someone suggested I try finance. But to be surrounded by so many talented people and to know we were studying at the highest levels of the subject was incredible. This 60–credit, two–year program will provide you with introductory level instruction in subjects … The US graduates about 1000-1500 physics Ph.D.'s and adding or removing 200-300 will radically change the job market. Acoustic consultant 2. The March 2013 edition of Nature Physics was devoted to the latest academic research into the links between physics and finance. Meteorologist 7. As expected, my adviser in physics wasn't happy about that, but he also wasn't going to stop me. Today, these ideas have been developed into a means of computing the value of sophisticated financial instruments and the management of risk. Complex networks are known to have a very wide range of applicability: a biological cell can be viewed as a network of chemicals linked through chemical reactions; the world wide web is a network of webpages connected by hyperlinks; and food webs are used by ecologists to model the relationships between different species. What Is the Best Way for Someone with a PhD in Physics to Start a Career in Quantitative Finance? Available for everyone, funded by readers. The ability to stay nimble and open-minded is a key skill. Radiation protection practitioner 9. Five years later, the same ideas were used by a young Albert Einstein to explain why pollen grains zigzag when they are suspended in water. Geophysicist 4. Technical authorJobs where your degree would be useful include: 1. After two years, I decided I wanted to be a trader. Of those who will be graduating with degrees in physics this year, around a half will go on to further study (doing a PhD is the most popular option). You could use your mathematical proficiency to enter into the financial world, or your knowledge of technological innovation to head into a relevant field of the legal sector (such as patent law or forensics). Although we do not know what the individual molecules are doing, we can make statistical statements; we can speak of the average speed of a molecule or the average distance between a pair of molecules. Philosophically, what we mean by risk management is not what most people think. It isn't just a case of being "too big to fail" – an institute's position within the network matters too. Theoretical developments in statistical physics and complex systems may be able to help. What can you do with a physics degree if none of the options above appeals to you? The idea dates back to a short paper published in Nature way back in 1972 by former chief scientific adviser to the government Robert May, entitled "Will a large complex system be stable?". They seemed to think that I was good with people so they made me a structurer, designing financial products for clients. In the 1950s, understanding the statistical properties of electrons in semiconductors was exploited by physicists at Bell Telephone laboratories to invent the transistor, the tiny switch that is used to build the logic circuitry that underpins the operation of the microchip. I had all my finance theory behind me, but I had never worked in the field before. February 15, 2018. I also learned the discipline of trading and risk management, which would serve me well later on. The network idea brings together the analysis of many superficially very different systems. The opportunity to study with professors like Richard Feynman and Kip Thorne at Caltech and learn the physics we did was phenomenal. Rep:? The problems are interdisciplinary, so the solutions have to be as well. All rights reserved. Research scientist (physical sciences) 10. I'd also like them to remember that they should not be doing anything they don't enjoy.