#GenerationTrader: Using physics as a base to start a trading career

Published on 14 February 2022

In the first of our #Generationtrader series, in which we explore the increasingly diverse backgrounds of team members on the trading desk, Evan Canwell of T. Rowe Price tells us how his background in physics transferred to working on the trading desk.

Evan explains how he was helped into the business through training, through his employer’s investment fellowship programme, via qualifications and team collaboration. He also gives his perspective on how diversity is increasing within trading, and where diversity in trading still needs to improve. #Generationtrader

Dan Barnes: Welcome to Trader TV #Generation Trader. We explore the increasingly diverse backgrounds of trading teams and the effect that has upon investors. Joining me today is Evan Canwell of T. Rowe Price.

Evan, welcome to the show.

Dan Canwell: Thanks. It’s great to be here.

Dan Barnes: So you come from a physics background. Tell us, how did you get into trading?

Dan Canwell: Even from a young age I was very into science, so I went to the University of Leeds and I studied physics at a bachelor’s and master’s level. I then joined T. Rowe Price in 2015 on the Investment Fellowship Program, a program specifically targeted towards students with a quantitative background. The philosophy behind the scheme was it’s easier to teach financial skills to people with quant backgrounds than it is the other way around.

Dan Barnes: Very interesting.

Dan Canwell: I think physics lends itself quite well to trading because ultimately it’s problem solving with math. It’s analytical skills. It’s looking for trends and data and all of that is useful.

Dan Barnes: Well, absolutely. So how did T. Rowe Price support you in this?

Dan Canwell: There were a number of investment science classes available to the fellows, which gave us a very basic understanding of certain financial topics such as asset valuation. T. Rowe then also went on to spot us in terms of encouraging enrollment in the CFA program. So I was able to achieve CFA Charter very early in my career.

There’s also a wide support network of colleagues, former fellows who were always happy to give up their time. And one of our values at T. Rowe is collaboration, and I’ve seen that through the network. There’s also a lot of focus on training and presentation skills and leadership to plug any other skills gaps.

Dan Barnes: Very exciting. So, tell me, what do you trade now and how do you trade?

Dan Canwell: I trade equities, cash equities as well as equity derivatives, which includes futures, options and total return swaps. At the moment, we trade Low Touch, High Touch andand portfolio trading. My expertize is electronic, low touch trading, so that involves using broker algorithms to execute trades in the market with minimal impact. Staying on top of market structure changes, regulatory changes, any changes to the algorithm that might have an impact on our execution, as well as just maintaining the broker relationships that we have with our electronic products.

Dan Barnes: And so was the presumption that it’s easier to learn trading based on having skills already correct, do you think?

Dan Canwell: I think it was fairly correct. You know, it’s about looking at trends, is about interpreting information and figuring out what signal, what’s noise. There’s a big focus on coding and data analysis – it’s really at the heart of what we do.

Dan Barnes: Do you think trading desks, broadly speaking, are becoming more diverse in terms of the backgrounds of traders?

Dan Canwell: In a lot of ways, yes, it’s fair to say that in terms of academic backgrounds, you know, there’s definitely a lot of diversity there. Ten years ago, when I was applying to the financial and trying to graduate schemes, I was often the only non-financial economics graduate in the room, whereas now, you know, at T. Rowe Price, I work with do for math backgrounds, electrical engineering, all the way through to like philosophy and journalism. So there’s definitely a real breadth of skills there.

Dan Barnes: That’s really good. I mean, trading tends to be one of the more high pressure roles, front office generally is. Is it challenging going from an academic background into that role?

Dan Canwell: I think part of the challenge is realizing that the academic, quantitative skills you have on everything and you do need to learn other skills. So there’s a lot of on the job learning. I was lucky enough to have support from all of my colleagues, so it’s very easy to kind of identify skills gaps and they’re more than happy to help me out in terms of training and things like that.

Dan Barnes: I guess the camaraderie helps you through as well?

Dan Canwell: It does, it helps to have those soft skills as well as the quant.

Dan Barnes: Absolutely. So would you recommend this as a potential career path to somebody from a physics background?

I would, yes. I think trading teachers, you know, a lot of transferable skills. You know, you get to the desk on morning and you just have to process a load of information and figure out what is signal, what’s noise, figure out what’s meaningful and what’s not. There’s a lot of communication skills you need to have, constant communication with brokers, PMs and analysts, you know, stakeholder management, working under time pressure.

There are many, many career paths. Some people move towards the portfolio management, analyst side of things. Others might move into a risk based role or more quantitative roles. Others may move out into another area finance like FinTech or even out of finance completely. I’m quite lucky to work T. Rowe Price because internally it’s quite a big organization, so there’s a lot of opportunity that to take your career in whichever direction you choose.

Dan Barnes: And then what would you say are the potential barriers to getting into trading today and how might they be overcome?

Within T. Rowe we’ve had very, very positive feedback from Investment Fellowship program. Every department that has had a fellow has had a success story, and the more those stories are shared, I think that helps to break down the mindset that traders or front office roles really have to be from a specific background.

There is work to do around gender diversity, ethnicity and socioeconomic background as well, and T. Rowe Price is really committed to initiatives like the 30% Group, to help more women into investments. I would also look at the ESG Sustainable Trading Initiative. We’ve got external speaker events that help us hear from a wide and diverse range of voices. They’ve got an internal internship program for school leavers as well, which is really, really successful.

Dan Barnes: That’s fantastic. Evan, thanks so much for coming on to Generation Trader and Trader TV.

Dan Barnes: That’s no problem. Thanks for having me.