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Coders who trade: Wall Street designs its staff for the future

366 points by chollida1 9y ago

chollida1 9y ago
I liked this article because the roll of the programmer on wall street has been going down recently from my perspective. Programmers used to work along side quants and were well respected. This was generally because practicing quants didn't used to be able to program. This was especially true in the 80s and 90's where programmers and quants where almost valued identically as one required the other to make things happen. Somewhere around mid 2000's most quants started to be able to program pretty well. Not necessarily with C++, though lots (especially former physics) could use C++, but certainly with mat-lab, etc. This really shrunk the required programmer head count, This, coupled with the fact that few programmers were trained in fields like stochastic calc, and the advent of offshoring meant that programming started to be come a lower status job around this time. Some relatively small fields like HFT kept good programmers in need, but these jobs are relatively few and far between compared to the sell side bank jobs. Now, programmers are much more valuable/respected once again, due to the requirement for top notch software, not even as a competitive advantage, but just table stakes to compete in the markets. And like most fields programming in finance has really started to specialize: - lockless programming, low level Linux, user mode network drivers, etc for HFT - distributed systems, low latency messaging for quote dissemination in large systems like what most sell side banks run. - real time risk limits, web UIs for helping to visualize and alert portfolio risk - "production" modeling of quantitative models, for those that can span the programming/math boundary
- rhcom2 9y ago
  Thanks for the detailed response. A lot of good stuff to Google.
- smallnamespace 9y ago
  > This, coupled with the fact that few programmers were trained in fields like stochastic calc, Anecdotally though, I've met plenty of coders who did this to themselves by refusing to learn more about the domain or the business. They basically silo'd themselves, then wondered why their colleagues didn't treat them as an integral part of the team when they couldn't speak the language or understand the concerns. Taught myself enough stochastic calc to change and validate pricing models while on the job. Coders who understand their domain well are immensely valuable, and are easily worth at least 3x, because they don't over- or under-engineer a solution, and because they can conjure up with technological solutions for problems that nobody else in the company can even conceive of.
  - codebolt 9y ago
    > Coders who understand their domain well are immensely valuable, and are easily worth at least 3x, because they don't over- or under-engineer a solution, and because they can conjure up with technological solutions for problems that nobody else in the company can even conceive of. This is a crucial point to me. Being able to code is good, but being able to code well while also having an intermediate or expert understanding of the domain that you are working within is what is going to set you apart in the long run. In the industry, developing software can usually be seen as the process of creating a tool that will help to better solve a problem. It seems strange to me that you would want someone who doesn't have a solid understanding of the nature of the problem (or the solution) to be designing and building the tool, just because they claim to be good tool-makers.
    - cm2187 9y ago
      > It seems strange to me that you would want someone who doesn't have a solid understanding of the nature of the problem (or the solution) to be designing and building the tool, just because they claim to be good tool-makers. I couldn't agree more and this is my main objection to "AI will replace [insert any job here]". A lot of problems are inaccessible to programmers just because not enough of them seem to be willing to understand them. Complex rules about accounting in large companies seems to be one of them for example. This is why I think AI will certainly overtake many professions but mostly professions that are required on a large scale and that are easy to understand: driving, cleaning a house, building a house, ironing, cooking, assembling objects, etc. For complex accounting or legal issues, I am a lot more skeptical. You don't need complex AI to run accounting systems, they can easily be done with regular software. However in large companies you still have huge accounting departments booking and maintaining these complex logics by hand (excel), a lot could be automated now. And the same reason why they haven't been automated in C# now will apply to AI in the future.
      - scrumper 9y ago
        Re your AI thesis, I think it’s the exact opposite. Deterministic, rule-based processing applied to lots of similar data are perfect for AI-fication. It’s all in the computer, and you can kick out to a human-driven exception process when required. All that physical, real-world stuff you mentioned (cleaning, cooking etc) is vastly more complicated, riddled with experience-driven subjective judgements (is this paper on the floor trash or should I put it back on the desk?) and highly situational. Extremely difficult to generalize and handle with an AI. Not to forget it’s messy stuff in the real world, with engineering and hardware and grease and failures.
- newman8r 9y ago
  Additionally, financial institutions are getting geared up for major participation in the cryptocurrency markets. Will be interesting to see how that changes the landscape.
- otakucode 9y ago
  Has offshoring ever been a significant factor in this arena? Given the profoundly proprietary nature of the systems being built, I would think that unlikely. Offshoring development is a good way to find your custom software reskinned and sold to a competitor without much legal recourse. Also, is 'mainstream' programming that common of a need? I had read (here on a HN comment thread) awhile ago that many organizations use commercial languages that simply aren't available outside of the financial services sector (I forget the name, it was 1 or 2 letters... KQ or something like that, an array programming language whose code looks like APL). I wondered how people broke into such a market. It's always seemed like an environment with interesting challenges which would have pretty objective goals and practices out of need.
  - tomrod 9y ago
    Huh. I see C++, Java, and Python as the go-to languages with my wall-street programming and modeling acquaintances. Very little esoterica.
    - stochastic_monk 9y ago
      Jane Street's famous for its obsession with OCaml.
      - sulam 9y ago
        Honestly, OCaml is hardly esoteric. It's not a major language, but it's not a specialty language either. I'd put it in the same category as Elm, Erlang, or even something like Julia. Scala takes a ton of inspiration from OCaml, to the point where you pretty much feel like you know one if you know the other (at least speaking for myself that's been true).
  - bm212 9y ago
    https://en.wikipedia.org/wiki/K_(programming_language) https://en.wikipedia.org/wiki/K_(programming_language)
  - praulv 9y ago
- colordrops 9y ago
  I apologize for the off the wall comment. Every time I read about wall street programming, I've got this subliminal voice in the back of my head wondering how anyone could find the motivation to do this work. I'm obviously revealing my biases against the financial industry here. Also, I'm unable to make myself do work if I don't see it contributing to some greater vision or cause. Are there people out there who love finance and learn these types of specializations on the job, or are they hired away from other industries lured by big comp packages? I guess it's just a case of lack of empathy on my part. I just can't understand why anyone would want to put so much effort and skill into making bots for farming money for a bunch of questionable people. I don't feel too guilty for saying this. Every time a story about bitcoin is posted to HN, people go off topic and start complaining about everything that is wrong with bitcoin. I don't see the same when we talk about finance in general, even though similar sentiments apply, maybe more so.
  - tomrod 9y ago
    Cash motivates plenty of people, as does the joy in solving a problem. Whether the value of that solution to society's benefit is positive or negative does not always factor into a solution architect's moral calculus. This is how I explain your observed point to myself when I see folks stoked to work for $largetechco or $adtechco.
    - v64 9y ago
      > as does the joy in solving a problem This is it for me. Futures trading is a zero sum game (negative sum if you factor in fees), so writing a program to automatically extract value from an ever changing market is a nontrivial and ongoing project. But unlike a game, getting good at it can pay the bills in a real way. I understand that in the big picture long term, I'm not making much of a mark on society, but nevertheless it satisfies my personal and financial needs.
      - Chyzwar 9y ago
        Markets are not zero-sum game it is a common misconception. http://www.businessinsider.com/the-stock-market-is-not-a-zero-sum-game-2013-4?IR=T http://www.businessinsider.com/the-stock-market-is-not-a-zer...
- webkike 9y ago
  I can program way better on average than a quant, but what does that matter to a quant
- alexcnwy 9y ago
  To be fair, quant vs. programmer is a false dichotomy since most quants did degrees like mathematical finance, actuarial science, etc. where computer science and numerical programming courses are part of their degrees.
  - jabretti 9y ago
    Depends where you go. Some firms have a very bright line between "quants" and "programmers", and you don't want to wind up on the "programmer" side of it.
    - throwaway_hft 9y ago
      Agree 100%. First firm where I worked the programmers were treated like monkeys, and the traders, some of whom weren't even that bright at the time, were almost godlike. Some other person wrote on here about traders being angry assholes. That firm had a ton of angry asshole traders because they'd push and push and push on deadlines, didn't understand the system at all, got hacked up buggy code, never invested in unit or system tests. It was an absolute disaster. Little anecdote: First year I was out with a more senior trader on my team over drinks. He was talking about the glory days of 08 where every single trader earned a million dollar bonus or more. I asked about the one infrastructure developer who came up with a system to use multicast to simultaneously publish our EuroStoxx signal to DAX along with a dozen other instruments. Nothing earth shattering in 2017, but it quadrupled our P&L and market share at the time. He got 10 grand.
naturalgradient 9y ago
Can anyone comment on how competitive salaries are there actually? Right now, for top tier PhD graduates in machine learning, it's about 300-400k at big tech companies starting out, and ~200k for master's degrees. From what I read and heard, banks are not really willing to pay up competitively for software?
- corporateslave6 9y ago
  Yeah not really, many HFs will match that 400k, but many will not. I have received a few offers from these quant funds, the offers have been good, but nothing I couldnt get working in tech. My understanding is that the average finance professional makes less than or equal to tech, but the top 1 - 5% of finance easily make 7 figures.
  - zjaffee 9y ago
    How large do you think that population of people in finance making 6 figures is in raw numbers? When you compare that to the tech industry, there are certainly high level engineers and managers that make 7 figure salaries all things included (especially given the growth in stock price at certain companies).
    - vasilipupkin 9y ago
      "How large do you think that population of people in finance making 6 figures is in raw numbers?" you mean 7 figures? if you are a top engineer in finance with many years of experience, you are likely making close to 7 figures.
  - naturalgradient 9y ago
    Ah that matches what I have heard. HFT/HF is paying up but overall, as someone who is coming up on making the decision, it's hard to see the upsides of finance. Losing all visibility/ability to publish/being a first class contributor and not second class dev..
    - 9y ago
j45 9y ago
A datapoint for the argument that "technologists can learn business easier than business folks can learn technology" camp.
jaymzcampbell 9y ago
I wonder if this will see an ability to more easily switch into fintech/banking as a developer working in various other industries. I worked with GS via a mobile agency for a while and really respected the developers and what they were doing from an engineering PoV. I had always viewed that industry as essentially closed unless you got in straight after graduating. Has anyone ever made the switch into an engineering role within a bank? Is it hard to get past the lack of specific "financial" experience if you have X years of software engineering behind you in general?
- cholantesh 9y ago
  Banks aren't the only financial services organizations out there. Look to get into the sector through smaller firms that do IR, asset management, etc. You'll still be paid competitively, and you can pick up knowledge about the sector. They might even foot the bill for an entry-level cert like the Canadian Securities Course (I don't know of any equivalents abroad but I'm sure they exist). With these under your belt, you will have a leg up in applying to a larger bank.
- ryandrake 9y ago
  +1 for an answer to this question. Fintech seems to me to be as walled off to outsiders as game companies are, only tending to hire amongst their own. The job descriptions seem to require more specialized "arcane wizardry" skills than the normal above-average C++ or mobile developer. If you're a commoner who broke into the biz, I'd be interested in learning your story.
- southphillyman 9y ago
  There are plenty of CRUD positions on Wall Street. If one wanted to get into a "strats" type role maybe it would be easier to just join as a regular Sr. Engineer. Get paid above avg salary to write web services or whatever, learn domain knowledge in a less stressful manner, and figure out a way to get into the group you really want internally.
- arenaninja 9y ago
  Not working on a fintech but FWIW I work on trading platforms for a well-known investment bank. Getting in was not particularly difficult but even with some experience you may need to network with someone on the inside to get your resume in front of the right recruiter, simply submitting your resume via the usual channels appears to be a crapshoot (though I had never applied here because I wasn't aware they were in town) My salary is quite average for the role/seniority level and AFAICT it's resented by many developers who work here because many will trade their "in" on their industry into more interesting fintech/banking work elsewhere somewhere down the line for higher compensation. Knowledge of financial transactions is definitely highly specialized and I don't have nearly enough of it yet but it has started to sink in
dogruck 9y ago
This is a native recruitment piece for Goldman and other banks. It was probably orchestrated between GS and BBG. That said, I think it’s genuine. Computer Scientists who work on Wall Street should not view their role as simply “a person who can write code.” Lastly, this is from October.
- vostok 9y ago
  Not only is it a native recruitment piece, but it's telling that they didn't talk about total compensation.
  - lordnacho 9y ago
    I would think it's pretty good. I get recruiters calling me all the time, a lot of them are quoting £150-200k total comp. That's for a guy with over a decade's experience in financial coding. By contrast on StackOverflow the salaries that you can see tend to be much lower for the non-finance things.
    - vostok 9y ago
      It's not surprising that it's higher than the average job on stackoverlfow. That's about what I would expect. I'm not saying it's horrible, but it's not exactly higher than top paying tech companies.
      - lordnacho 9y ago
        Any idea what the tech firms pay in London? I don't have many data points for them.
        nvarsj 9y ago
        I'd say the typical for a senior engineer is around 70, ranging up to about 100 or so depending on expertise/company. Going to lead/architect you're looking around 80-120 total comp (there's a huge range...). Finance will pay much better like you said, 150-200, but the tech will be pretty bad. People making over 150 out of finance are generally contracting or working for a US company.
rb808 9y ago
> Eighteen are now enrolled in the program, including Korn. GS has 34k employees. Thousands of traders and probably >10k in IT. 18 people isn't really a revolution. Devs still are second class citizens in banks - the highest earning ones switched to become traders and just do some python/R/VBA on the desk. There are a few hedge funds (Millennium, Two Sigma) where devs are nearly treated as well as traders - would be interested to hear of any place else.
- dsacco 9y ago
  > There are a few hedge funds (Millennium, Two Sigma) where devs are nearly treated as well as traders - would be interested to hear of any place else. Software engineers are treated very well, if not as well as research scientists, at essentially any large or successful quantitative hedge fund. This includes firms like DRW, Optiver, Tower Research, Two Sigma, RenTec, Citadel, etc.
  - deleted 9y ago
    [deleted]
- throwaway7645 9y ago
  Jane Street is probably an exception.
dookahku 9y ago
So how does a mid-level software engineer get into trading? I do paper trading on my own for fun but I'd like to make it a career.
- axedwool 9y ago
  I am also interested in the answer to this question.
- meesterdude 9y ago
  Personally, i am working on building a cryptocurrency trading platform, because the API's are easily accessible - but the markets entirely different in behavior. Still, rolling my own implementations of technical indicators has been pretty insightful, and backtesting has shown whats worked and what hasn't in given market conditions. but i realize you're probably talking about more traditional markets like FOREX
  - odonnellryan 9y ago
    What are you using to backtest? Data you gathered yourself? Hardest part with backtesting in my experience has been trying to simulate successful buy/sell orders and the fees.
    - monkeyshelli 9y ago
      You can query Bittrex for some data, or you can find some data and a script from here https://github.com/gcarq/freqtrade/tree/master/freqtrade/tests/testdata https://github.com/gcarq/freqtrade/tree/master/freqtrade/tes... Couldn't you bake the fee into the application logic e.g. https://github.com/gcarq/freqtrade/blob/master/freqtrade/main.py#L232 https://github.com/gcarq/freqtrade/blob/master/freqtrade/mai...
      - meesterdude 9y ago
        > Couldn't you bake the fee into the application logic You can (and I do as well) - although some proprietary bots have had notable problems with figuring them out.
dustingetz 9y ago
Where are the engineering recruiting channels? Can't find anything except corpspeak blah blah that isnt even meant to be read
antoniuschan99 9y ago
Crypto is doing really well these last two years, it seems like that is the startup equivalent to the investment banking/quant jobs. However with Crypto, it does feel like the beginning of the dot com era. Dot Com == ICO
blunte 9y ago
Step back and consider the immense intellect and creativity being devoted to just making money.
- bob_theslob646 9y ago
  Or rather reallocating money, when you really think about it...
- jabretti 9y ago
  Yes, but step back and consider the immense intellect and creativity being devoted to getting laid, or speculating about what's going to happen on Game of Thrones, or thinking up clever things you should have said half an hour ago, or complaining about what's wrong with Star Wars these days. Or arguing on the internet. Just a teeny portion of our species' intellectual output winds up creating or discovering anything of real value, but that's fine, we muddle through nonetheless. The finance industry has its role to play in ensuring the lights stay on and there's food in the supermarket.
  - blunte 9y ago
    I don't think intellect is much of a factor in getting laid. My bet here is that intellect, or at least use of intellect, has an inverse effect on success in that area :). The biggest difference between my example and your examples is that it's a job. This talent pool is using their working hours (and quite often most of their waking hours) pursuing a goal that provides almost nothing to society. The "finance industry" that we're talking about here is self-serving and in most cases is having no positive relationship with the lights or the supermarket. The transportation industry, by comparison, has a profit motive but ultimately turns human creativity and intellect into things that arguably make life better for a large number of people.
    - hacker_9 9y ago
      This is unfair, finance is basically an abstraction over our resource constrained world. We didn't get to choose not to live in a world with limited supplies of everything, and removing money from the equation doesn't change that constraint. Given that we've chosen money as our method of resource allocation, it makes sense people who want access to more resources would try to optimise their profit building strategies, and smarter people are going to make better choices. It is why financial hubs, such as London or New York, have more resources to play with and so can provide a higher quality of living.
otakucode 9y ago
Are there any automated trading firms that are specifically focused on exploiting the unintended combined behavior of multiple systems operating in an environment where they modify both their own and each others environment (the stock market being that environment)? While it might be tractable for an organization to construct their system such that it can project its own consequences to its own sphere of interest, once you mix in other systems operating in the same area all bets are off. And once you have the majority of trades being performed by automated or rules-based systems, you ought to detect their parameters through assuming reasonable things about those systems (processors which are limited to a certain number of operations, bounding the latency on their response to change, limitations on the complexity of the systems or rules being used due to needing to be comprehensible to human analysis in its source form, etc) and looking for predictable patterns created primarily by the interactions between those automated systems. Everything I have read about automated trading systems (which of course is always very light on details due to everything being extremely valuable and proprietary) seems to indicate that most automated systems are designed as if they are operating in an environment where the other traders are primarily humans. If anyone has come across indication that they are treating the movements of the market as the output of deterministic software systems rather than 'natural' trading, I'd be appreciative of a link!
- makrolof 9y ago
  Hi. Well, yes, lots of people has come across that fact. But the guys able to exploit it are market makers. They look for kinds of repeated patterns in the form of orders, stops, time of day... And they later trick on them until they stop working. As you noticed, knowing you'll get someone to buy your thing at a relative price at some specific time and day can be very profitable. Still, it's difficult to read something "worthwile" about this.
- mrchicity 9y ago
  Depends how you mean exploit. Not a lawyer, but to a first approximation, doing anything in markets to elicit a response from others rather than for bona fide economic reasons is illegal market manipulation so active exploitation is rarely done at serious firms. It's usually individual day traders or offshore boiler room type groups. Passive exploitation, as in detecting predictable future actions, is probably common, if unintentional. Most automated traders are searching for anything that predicts an imminent price change, on average. Predicting future actions and predicting prices are roughly equivalent. As you move along the continuum from straightforward arbitrage to esoteric black box quant stuff, it becomes more and more difficult to understand how or why a trade even works. I'm sure there are models that predict prices very well solely because they've locked on to some combination of tells unintentionally leaked by another algo. Here's an example of someone who built a model to detect algorithmic iceberg orders reloading: https://mechanicalmarkets.wordpress.com/2015/04/30/market-data-patterns-order-anticipation-and-an-example-trading-strategy/ https://mechanicalmarkets.wordpress.com/2015/04/30/market-da... - he makes an interesting point that any quant data mining order book event sequences that predict strong price movements would find the same pattern easily.
deleted 9y ago
[deleted]
guard0g 9y ago
I'm coming back to NYC....
chx 9y ago
There was an amazing article about one of the programmers responsible for inventing CDS and I can't find it again :( it included such gems as putting offal in a grinder and getting steak out of it, anyone remembers it?
praulv 9y ago
Counter view: I only work in the field because it's the only way in tech to pay rent where I live. I actually hate it, it's of zero value to society and frankly the trading/business side are real assholes under pressure
- aaronchall 9y ago
  > zero value to society What value are financial services? Do you - have a bank account? checking? savings? money markets? - monitor your accounts online? do transfers? - have an investment account? save for retirement? - have life or disability insurance? pool risks and hedge against them? - have a city or country that needs to raise money, borrow from others? - have a company that needs to issue stock for capital investments? People earn, save, invest, borrow, and build their dreams. Finance makes it possible. I'm sure you just want to pay the rent, but finance is very competitive and if your firm created no value for society, it would go out of business.
  - bousaid 9y ago
    A lot of that is simply busy work and can in turn be automated. A huge bank like Goldman is essentially a middleman - and middlemen can also be trimmed down. For example, I was just talking to a friend who works at Goldman as a trader. 75% of his job is to answer the phone and deal with clients issues (eg “why is my account frozen?”). His job honestly sounded like a customer service job. He’s also the person who signs off on wire transfers, something that could easily be automated. So much of the “value” Goldman supposedly creates is due to them creating an artificial need for it.
    - golergka 9y ago
      So, why do you think it hasn't been done yet? You make it sound like there's a ton of money to be made in this "automating Goldman Sachs out" thing.
      - thomastjeffery 9y ago
known 9y ago
Is it a cost cutting exercise? Because GS is ruthless in cutting costs.
likelynew 9y ago
Can someone give me any information on what skill set can one develop for a quant job as a programmer, and what to know for the recruitment process.
Mikeb85 9y ago
Well it's a lot easier for a trader to learn enough programming to implement specific algorithms than it is for a programmer to learn about financial markets.

366 points by chollida1 9y ago

I liked this article because the roll of the programmer on wall street has been going down recently from my perspective. Programmers used to work along side quants and were well respected. This was generally because practicing quants didn't used to be able to program. This was especially true in the 80s and 90's where programmers and quants where almost valued identically as one required the other to make things happen. Somewhere around mid 2000's most quants started to be able to program pretty well. Not necessarily with C++, though lots (especially former physics) could use C++, but certainly with mat-lab, etc. This really shrunk the required programmer head count, This, coupled with the fact that few programmers were trained in fields like stochastic calc, and the advent of offshoring meant that programming started to be come a lower status job around this time. Some relatively small fields like HFT kept good programmers in need, but these jobs are relatively few and far between compared to the sell side bank jobs. Now, programmers are much more valuable/respected once again, due to the requirement for top notch software, not even as a competitive advantage, but just table stakes to compete in the markets. And like most fields programming in finance has really started to specialize: - lockless programming, low level Linux, user mode network drivers, etc for HFT - distributed systems, low latency messaging for quote dissemination in large systems like what most sell side banks run. - real time risk limits, web UIs for helping to visualize and alert portfolio risk - "production" modeling of quantitative models, for those that can span the programming/math boundary

rhcom2 9y ago
Thanks for the detailed response. A lot of good stuff to Google.
smallnamespace 9y ago
> This, coupled with the fact that few programmers were trained in fields like stochastic calc, Anecdotally though, I've met plenty of coders who did this to themselves by refusing to learn more about the domain or the business. They basically silo'd themselves, then wondered why their colleagues didn't treat them as an integral part of the team when they couldn't speak the language or understand the concerns. Taught myself enough stochastic calc to change and validate pricing models while on the job. Coders who understand their domain well are immensely valuable, and are easily worth at least 3x, because they don't over- or under-engineer a solution, and because they can conjure up with technological solutions for problems that nobody else in the company can even conceive of.
- codebolt 9y ago
  > Coders who understand their domain well are immensely valuable, and are easily worth at least 3x, because they don't over- or under-engineer a solution, and because they can conjure up with technological solutions for problems that nobody else in the company can even conceive of. This is a crucial point to me. Being able to code is good, but being able to code well while also having an intermediate or expert understanding of the domain that you are working within is what is going to set you apart in the long run. In the industry, developing software can usually be seen as the process of creating a tool that will help to better solve a problem. It seems strange to me that you would want someone who doesn't have a solid understanding of the nature of the problem (or the solution) to be designing and building the tool, just because they claim to be good tool-makers.
  - cm2187 9y ago
    > It seems strange to me that you would want someone who doesn't have a solid understanding of the nature of the problem (or the solution) to be designing and building the tool, just because they claim to be good tool-makers. I couldn't agree more and this is my main objection to "AI will replace [insert any job here]". A lot of problems are inaccessible to programmers just because not enough of them seem to be willing to understand them. Complex rules about accounting in large companies seems to be one of them for example. This is why I think AI will certainly overtake many professions but mostly professions that are required on a large scale and that are easy to understand: driving, cleaning a house, building a house, ironing, cooking, assembling objects, etc. For complex accounting or legal issues, I am a lot more skeptical. You don't need complex AI to run accounting systems, they can easily be done with regular software. However in large companies you still have huge accounting departments booking and maintaining these complex logics by hand (excel), a lot could be automated now. And the same reason why they haven't been automated in C# now will apply to AI in the future.
    - scrumper 9y ago
      Re your AI thesis, I think it’s the exact opposite. Deterministic, rule-based processing applied to lots of similar data are perfect for AI-fication. It’s all in the computer, and you can kick out to a human-driven exception process when required. All that physical, real-world stuff you mentioned (cleaning, cooking etc) is vastly more complicated, riddled with experience-driven subjective judgements (is this paper on the floor trash or should I put it back on the desk?) and highly situational. Extremely difficult to generalize and handle with an AI. Not to forget it’s messy stuff in the real world, with engineering and hardware and grease and failures.
newman8r 9y ago
Additionally, financial institutions are getting geared up for major participation in the cryptocurrency markets. Will be interesting to see how that changes the landscape.
otakucode 9y ago
Has offshoring ever been a significant factor in this arena? Given the profoundly proprietary nature of the systems being built, I would think that unlikely. Offshoring development is a good way to find your custom software reskinned and sold to a competitor without much legal recourse. Also, is 'mainstream' programming that common of a need? I had read (here on a HN comment thread) awhile ago that many organizations use commercial languages that simply aren't available outside of the financial services sector (I forget the name, it was 1 or 2 letters... KQ or something like that, an array programming language whose code looks like APL). I wondered how people broke into such a market. It's always seemed like an environment with interesting challenges which would have pretty objective goals and practices out of need.
- tomrod 9y ago
  Huh. I see C++, Java, and Python as the go-to languages with my wall-street programming and modeling acquaintances. Very little esoterica.
  - stochastic_monk 9y ago
    Jane Street's famous for its obsession with OCaml.
    - sulam 9y ago
      Honestly, OCaml is hardly esoteric. It's not a major language, but it's not a specialty language either. I'd put it in the same category as Elm, Erlang, or even something like Julia. Scala takes a ton of inspiration from OCaml, to the point where you pretty much feel like you know one if you know the other (at least speaking for myself that's been true).
- bm212 9y ago
  https://en.wikipedia.org/wiki/K_(programming_language) https://en.wikipedia.org/wiki/K_(programming_language)
- praulv 9y ago
colordrops 9y ago
I apologize for the off the wall comment. Every time I read about wall street programming, I've got this subliminal voice in the back of my head wondering how anyone could find the motivation to do this work. I'm obviously revealing my biases against the financial industry here. Also, I'm unable to make myself do work if I don't see it contributing to some greater vision or cause. Are there people out there who love finance and learn these types of specializations on the job, or are they hired away from other industries lured by big comp packages? I guess it's just a case of lack of empathy on my part. I just can't understand why anyone would want to put so much effort and skill into making bots for farming money for a bunch of questionable people. I don't feel too guilty for saying this. Every time a story about bitcoin is posted to HN, people go off topic and start complaining about everything that is wrong with bitcoin. I don't see the same when we talk about finance in general, even though similar sentiments apply, maybe more so.
- tomrod 9y ago
  Cash motivates plenty of people, as does the joy in solving a problem. Whether the value of that solution to society's benefit is positive or negative does not always factor into a solution architect's moral calculus. This is how I explain your observed point to myself when I see folks stoked to work for $largetechco or $adtechco.
  - v64 9y ago
    > as does the joy in solving a problem This is it for me. Futures trading is a zero sum game (negative sum if you factor in fees), so writing a program to automatically extract value from an ever changing market is a nontrivial and ongoing project. But unlike a game, getting good at it can pay the bills in a real way. I understand that in the big picture long term, I'm not making much of a mark on society, but nevertheless it satisfies my personal and financial needs.
    - Chyzwar 9y ago
      Markets are not zero-sum game it is a common misconception. http://www.businessinsider.com/the-stock-market-is-not-a-zero-sum-game-2013-4?IR=T http://www.businessinsider.com/the-stock-market-is-not-a-zer...
webkike 9y ago
I can program way better on average than a quant, but what does that matter to a quant
alexcnwy 9y ago
To be fair, quant vs. programmer is a false dichotomy since most quants did degrees like mathematical finance, actuarial science, etc. where computer science and numerical programming courses are part of their degrees.
- jabretti 9y ago
  Depends where you go. Some firms have a very bright line between "quants" and "programmers", and you don't want to wind up on the "programmer" side of it.
  - throwaway_hft 9y ago
    Agree 100%. First firm where I worked the programmers were treated like monkeys, and the traders, some of whom weren't even that bright at the time, were almost godlike. Some other person wrote on here about traders being angry assholes. That firm had a ton of angry asshole traders because they'd push and push and push on deadlines, didn't understand the system at all, got hacked up buggy code, never invested in unit or system tests. It was an absolute disaster. Little anecdote: First year I was out with a more senior trader on my team over drinks. He was talking about the glory days of 08 where every single trader earned a million dollar bonus or more. I asked about the one infrastructure developer who came up with a system to use multicast to simultaneously publish our EuroStoxx signal to DAX along with a dozen other instruments. Nothing earth shattering in 2017, but it quadrupled our P&L and market share at the time. He got 10 grand.

naturalgradient 9y ago

Can anyone comment on how competitive salaries are there actually? Right now, for top tier PhD graduates in machine learning, it's about 300-400k at big tech companies starting out, and ~200k for master's degrees. From what I read and heard, banks are not really willing to pay up competitively for software?

corporateslave6 9y ago
Yeah not really, many HFs will match that 400k, but many will not. I have received a few offers from these quant funds, the offers have been good, but nothing I couldnt get working in tech. My understanding is that the average finance professional makes less than or equal to tech, but the top 1 - 5% of finance easily make 7 figures.
- zjaffee 9y ago
  How large do you think that population of people in finance making 6 figures is in raw numbers? When you compare that to the tech industry, there are certainly high level engineers and managers that make 7 figure salaries all things included (especially given the growth in stock price at certain companies).
  - vasilipupkin 9y ago
    "How large do you think that population of people in finance making 6 figures is in raw numbers?" you mean 7 figures? if you are a top engineer in finance with many years of experience, you are likely making close to 7 figures.
- naturalgradient 9y ago
  Ah that matches what I have heard. HFT/HF is paying up but overall, as someone who is coming up on making the decision, it's hard to see the upsides of finance. Losing all visibility/ability to publish/being a first class contributor and not second class dev..
  - 9y ago

j45 9y ago

A datapoint for the argument that "technologists can learn business easier than business folks can learn technology" camp.

jaymzcampbell 9y ago

I wonder if this will see an ability to more easily switch into fintech/banking as a developer working in various other industries. I worked with GS via a mobile agency for a while and really respected the developers and what they were doing from an engineering PoV. I had always viewed that industry as essentially closed unless you got in straight after graduating. Has anyone ever made the switch into an engineering role within a bank? Is it hard to get past the lack of specific "financial" experience if you have X years of software engineering behind you in general?

cholantesh 9y ago
Banks aren't the only financial services organizations out there. Look to get into the sector through smaller firms that do IR, asset management, etc. You'll still be paid competitively, and you can pick up knowledge about the sector. They might even foot the bill for an entry-level cert like the Canadian Securities Course (I don't know of any equivalents abroad but I'm sure they exist). With these under your belt, you will have a leg up in applying to a larger bank.
ryandrake 9y ago
+1 for an answer to this question. Fintech seems to me to be as walled off to outsiders as game companies are, only tending to hire amongst their own. The job descriptions seem to require more specialized "arcane wizardry" skills than the normal above-average C++ or mobile developer. If you're a commoner who broke into the biz, I'd be interested in learning your story.
southphillyman 9y ago
There are plenty of CRUD positions on Wall Street. If one wanted to get into a "strats" type role maybe it would be easier to just join as a regular Sr. Engineer. Get paid above avg salary to write web services or whatever, learn domain knowledge in a less stressful manner, and figure out a way to get into the group you really want internally.
arenaninja 9y ago
Not working on a fintech but FWIW I work on trading platforms for a well-known investment bank. Getting in was not particularly difficult but even with some experience you may need to network with someone on the inside to get your resume in front of the right recruiter, simply submitting your resume via the usual channels appears to be a crapshoot (though I had never applied here because I wasn't aware they were in town) My salary is quite average for the role/seniority level and AFAICT it's resented by many developers who work here because many will trade their "in" on their industry into more interesting fintech/banking work elsewhere somewhere down the line for higher compensation. Knowledge of financial transactions is definitely highly specialized and I don't have nearly enough of it yet but it has started to sink in

dogruck 9y ago

This is a native recruitment piece for Goldman and other banks. It was probably orchestrated between GS and BBG. That said, I think it’s genuine. Computer Scientists who work on Wall Street should not view their role as simply “a person who can write code.” Lastly, this is from October.

vostok 9y ago
Not only is it a native recruitment piece, but it's telling that they didn't talk about total compensation.
- lordnacho 9y ago
  I would think it's pretty good. I get recruiters calling me all the time, a lot of them are quoting £150-200k total comp. That's for a guy with over a decade's experience in financial coding. By contrast on StackOverflow the salaries that you can see tend to be much lower for the non-finance things.
  - vostok 9y ago
    It's not surprising that it's higher than the average job on stackoverlfow. That's about what I would expect. I'm not saying it's horrible, but it's not exactly higher than top paying tech companies.
    - lordnacho 9y ago
      Any idea what the tech firms pay in London? I don't have many data points for them.
      - nvarsj 9y ago
        I'd say the typical for a senior engineer is around 70, ranging up to about 100 or so depending on expertise/company. Going to lead/architect you're looking around 80-120 total comp (there's a huge range...). Finance will pay much better like you said, 150-200, but the tech will be pretty bad. People making over 150 out of finance are generally contracting or working for a US company.

rb808 9y ago

> Eighteen are now enrolled in the program, including Korn. GS has 34k employees. Thousands of traders and probably >10k in IT. 18 people isn't really a revolution. Devs still are second class citizens in banks - the highest earning ones switched to become traders and just do some python/R/VBA on the desk. There are a few hedge funds (Millennium, Two Sigma) where devs are nearly treated as well as traders - would be interested to hear of any place else.

dsacco 9y ago
> There are a few hedge funds (Millennium, Two Sigma) where devs are nearly treated as well as traders - would be interested to hear of any place else. Software engineers are treated very well, if not as well as research scientists, at essentially any large or successful quantitative hedge fund. This includes firms like DRW, Optiver, Tower Research, Two Sigma, RenTec, Citadel, etc.
- deleted 9y ago
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throwaway7645 9y ago
Jane Street is probably an exception.

dookahku 9y ago

So how does a mid-level software engineer get into trading? I do paper trading on my own for fun but I'd like to make it a career.

axedwool 9y ago
I am also interested in the answer to this question.
meesterdude 9y ago
Personally, i am working on building a cryptocurrency trading platform, because the API's are easily accessible - but the markets entirely different in behavior. Still, rolling my own implementations of technical indicators has been pretty insightful, and backtesting has shown whats worked and what hasn't in given market conditions. but i realize you're probably talking about more traditional markets like FOREX
- odonnellryan 9y ago
  What are you using to backtest? Data you gathered yourself? Hardest part with backtesting in my experience has been trying to simulate successful buy/sell orders and the fees.
  - monkeyshelli 9y ago
    You can query Bittrex for some data, or you can find some data and a script from here https://github.com/gcarq/freqtrade/tree/master/freqtrade/tests/testdata https://github.com/gcarq/freqtrade/tree/master/freqtrade/tes... Couldn't you bake the fee into the application logic e.g. https://github.com/gcarq/freqtrade/blob/master/freqtrade/main.py#L232 https://github.com/gcarq/freqtrade/blob/master/freqtrade/mai...
    - meesterdude 9y ago
      > Couldn't you bake the fee into the application logic You can (and I do as well) - although some proprietary bots have had notable problems with figuring them out.

dustingetz 9y ago

Where are the engineering recruiting channels? Can't find anything except corpspeak blah blah that isnt even meant to be read

antoniuschan99 9y ago

Crypto is doing really well these last two years, it seems like that is the startup equivalent to the investment banking/quant jobs. However with Crypto, it does feel like the beginning of the dot com era. Dot Com == ICO

blunte 9y ago

Step back and consider the immense intellect and creativity being devoted to just making money.

bob_theslob646 9y ago
Or rather reallocating money, when you really think about it...
jabretti 9y ago
Yes, but step back and consider the immense intellect and creativity being devoted to getting laid, or speculating about what's going to happen on Game of Thrones, or thinking up clever things you should have said half an hour ago, or complaining about what's wrong with Star Wars these days. Or arguing on the internet. Just a teeny portion of our species' intellectual output winds up creating or discovering anything of real value, but that's fine, we muddle through nonetheless. The finance industry has its role to play in ensuring the lights stay on and there's food in the supermarket.
- blunte 9y ago
  I don't think intellect is much of a factor in getting laid. My bet here is that intellect, or at least use of intellect, has an inverse effect on success in that area :). The biggest difference between my example and your examples is that it's a job. This talent pool is using their working hours (and quite often most of their waking hours) pursuing a goal that provides almost nothing to society. The "finance industry" that we're talking about here is self-serving and in most cases is having no positive relationship with the lights or the supermarket. The transportation industry, by comparison, has a profit motive but ultimately turns human creativity and intellect into things that arguably make life better for a large number of people.
  - hacker_9 9y ago
    This is unfair, finance is basically an abstraction over our resource constrained world. We didn't get to choose not to live in a world with limited supplies of everything, and removing money from the equation doesn't change that constraint. Given that we've chosen money as our method of resource allocation, it makes sense people who want access to more resources would try to optimise their profit building strategies, and smarter people are going to make better choices. It is why financial hubs, such as London or New York, have more resources to play with and so can provide a higher quality of living.

otakucode 9y ago

Are there any automated trading firms that are specifically focused on exploiting the unintended combined behavior of multiple systems operating in an environment where they modify both their own and each others environment (the stock market being that environment)? While it might be tractable for an organization to construct their system such that it can project its own consequences to its own sphere of interest, once you mix in other systems operating in the same area all bets are off. And once you have the majority of trades being performed by automated or rules-based systems, you ought to detect their parameters through assuming reasonable things about those systems (processors which are limited to a certain number of operations, bounding the latency on their response to change, limitations on the complexity of the systems or rules being used due to needing to be comprehensible to human analysis in its source form, etc) and looking for predictable patterns created primarily by the interactions between those automated systems. Everything I have read about automated trading systems (which of course is always very light on details due to everything being extremely valuable and proprietary) seems to indicate that most automated systems are designed as if they are operating in an environment where the other traders are primarily humans. If anyone has come across indication that they are treating the movements of the market as the output of deterministic software systems rather than 'natural' trading, I'd be appreciative of a link!

makrolof 9y ago
Hi. Well, yes, lots of people has come across that fact. But the guys able to exploit it are market makers. They look for kinds of repeated patterns in the form of orders, stops, time of day... And they later trick on them until they stop working. As you noticed, knowing you'll get someone to buy your thing at a relative price at some specific time and day can be very profitable. Still, it's difficult to read something "worthwile" about this.
mrchicity 9y ago
Depends how you mean exploit. Not a lawyer, but to a first approximation, doing anything in markets to elicit a response from others rather than for bona fide economic reasons is illegal market manipulation so active exploitation is rarely done at serious firms. It's usually individual day traders or offshore boiler room type groups. Passive exploitation, as in detecting predictable future actions, is probably common, if unintentional. Most automated traders are searching for anything that predicts an imminent price change, on average. Predicting future actions and predicting prices are roughly equivalent. As you move along the continuum from straightforward arbitrage to esoteric black box quant stuff, it becomes more and more difficult to understand how or why a trade even works. I'm sure there are models that predict prices very well solely because they've locked on to some combination of tells unintentionally leaked by another algo. Here's an example of someone who built a model to detect algorithmic iceberg orders reloading: https://mechanicalmarkets.wordpress.com/2015/04/30/market-data-patterns-order-anticipation-and-an-example-trading-strategy/ https://mechanicalmarkets.wordpress.com/2015/04/30/market-da... - he makes an interesting point that any quant data mining order book event sequences that predict strong price movements would find the same pattern easily.

deleted 9y ago

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guard0g 9y ago

I'm coming back to NYC....

chx 9y ago

There was an amazing article about one of the programmers responsible for inventing CDS and I can't find it again :( it included such gems as putting offal in a grinder and getting steak out of it, anyone remembers it?

praulv 9y ago

Counter view: I only work in the field because it's the only way in tech to pay rent where I live. I actually hate it, it's of zero value to society and frankly the trading/business side are real assholes under pressure

aaronchall 9y ago
> zero value to society What value are financial services? Do you - have a bank account? checking? savings? money markets? - monitor your accounts online? do transfers? - have an investment account? save for retirement? - have life or disability insurance? pool risks and hedge against them? - have a city or country that needs to raise money, borrow from others? - have a company that needs to issue stock for capital investments? People earn, save, invest, borrow, and build their dreams. Finance makes it possible. I'm sure you just want to pay the rent, but finance is very competitive and if your firm created no value for society, it would go out of business.
- bousaid 9y ago
  A lot of that is simply busy work and can in turn be automated. A huge bank like Goldman is essentially a middleman - and middlemen can also be trimmed down. For example, I was just talking to a friend who works at Goldman as a trader. 75% of his job is to answer the phone and deal with clients issues (eg “why is my account frozen?”). His job honestly sounded like a customer service job. He’s also the person who signs off on wire transfers, something that could easily be automated. So much of the “value” Goldman supposedly creates is due to them creating an artificial need for it.
  - golergka 9y ago
    So, why do you think it hasn't been done yet? You make it sound like there's a ton of money to be made in this "automating Goldman Sachs out" thing.
    - thomastjeffery 9y ago

known 9y ago

Is it a cost cutting exercise? Because GS is ruthless in cutting costs.

likelynew 9y ago

Can someone give me any information on what skill set can one develop for a quant job as a programmer, and what to know for the recruitment process.

Mikeb85 9y ago

Well it's a lot easier for a trader to learn enough programming to implement specific algorithms than it is for a programmer to learn about financial markets.