6 ms·

Not to mention the fact that your job would be less than meaningless

• mustyoshi 5y ago
  What kind of meaningful job produces enough value to justify making 7x what the median US worker makes?
  • treeman79 5y ago
    When young, I was asked to take over reporting for a couple weeks while someone went on vacation. It was a full time position that required 7 solid hours a day of work. I had the position fully automated by the time person got back. Thankfully they took it well and they got more interesting assignments. 2 weeks of my time saved several years of salary for company. I did this many times.
    • lotsofpulp 5y ago
      Ironically, that is also what the “meaningless” HFT firms do. Automate trading so fewer and fewer traders are needed.
      • UweSchmidt 5y ago
        They are not replacing "needed traders", i.e. people that used to execute trades required by real people or companies, like "buy some Apple stock". These firms are playing their very own game in the markets, ultimately extracing money from the economy, with the supposed public benefit of "creating liquidity" (not needed for real investors who can very well wait a day or two before closing a deal) while actually distorting the markets and obscuring the real value).
        • lotsofpulp 5y ago
          No one is stopping the buyers who can wait a day or two from placing limit orders. If the HFT firms are earning profits, it is because someone wants to pay them for the liquidity.
          • UweSchmidt 5y ago
            Anyone who buys organically is buying after the HFT firms have made their buying decisions on the entirety of the market, it's not possible to "wait a day or two". The deal will be incrementally worse as these firms extract value, your price will be the one that all of these firms deemed "meh". It's like walking into a grocery store and the banana you really want it 1$ and you'll buy. Because that's the price that highly sophisticated middlemen between the store and you have determined to be good. The liquidity argument is abstract and unquantifyable enough to be used as a fig leaf for the industry. Real investors who are in it for fundamental values, dividends or strategy don't need to sell in a nanosecond. Now that you can sell in a nanosecond your deal is bad, as in the moment you hear of the Volkswagen scandal all the trading algorithms are done with their work already.
            • lotsofpulp 5y ago
              > Now that you can sell in a nanosecond your deal is bad, as in the moment you hear of the Volkswagen scandal all the trading algorithms are done with their work already. You can only sell in a nanosecond because someone else is willing to buy in a nanosecond. And if your goal is to earn money trading in time horizons of minutes or hours or even days, you probably are not equipped to do that as a retail investor. Why should you have the right to dump VW after the scandal and not someone else? What about an investor that did not read the news until the next day? > The deal will be incrementally worse as these firms extract value, your price will be the one that all of these firms deemed "meh". No one owes you arbitrage opportunity. If you think the banana is worth $1, then it is worth $1. Maybe a nanosecond ago you could have bought it at $.999999, but as long as you still think it is worth $1, then what is the problem with paying $1?
              • UweSchmidt 5y ago
                Not the right place to debate further but it seems this topic seems to be underdiscussed or I present my points not well enough. Certainly my goal is neither to earn money in horizons of days, nor to have arbitrage opportunities at all. All of that is nonsense and would assume the legitimacy of people who sit in front of computer screens looking at stock charts. Value creating is a long term endeavour and so should be investing. If we let go of the mentality to "dump VW after the scandal before someone else" we find ourselves with bad news about VW and new conclusions about a good value for the stock and people buying and selling accordingly after all have ready their morning paper. A small Tobin tax or other technical measures can prevent unethical actors from taking the banana out of your shopping cart and pricing it within nanoseconds. The supply-and-demand maximalism is a holdover from anticommunist thinking and ignores market distortions like Zillow's real estate buying.
        • mgaunard 5y ago
          The way the market works is that there are people who want to buy liquidity (the buy side) and people that are willing to sell that liquidity to them (the sell side). It doesn't refer to buying or selling lots but rather initiating/fulfilling orders regardless of side. The buy side are typically pension or hedge funds that act based on predictions they have about the future to maximize long-term the value of their portfolio. The sell side are either banks or specialized HFT firms that only know the instantaneous price of things and their short-term correlations (and not how they might evolve long-term), whose goal is to collect the difference between bid and ask price, tabling on the fact they can sell back their inventory to someone else before the price goes against them. They expose themselves to the risk that price moves before they can do that, and the difference in price between the bid and ask reflects that uncertainty. The sell side is essential for the buy side to function, and the competition between them leads them to them providing the tightest possible margins and therefore the best price for investors. The HFT players provide the tightest prices by being very fast to react to market changes and get out of their risk, which is why it's highly technology-driven. Thinking they have no value shows lack of understanding of market dynamics. Without HFT firms, investors would just be paying large commissions to banks instead.
    • boppo1 5y ago
      How do I reach this level of confidence in programming ability?
      • treeman79 5y ago
        Automate everything. Regardless if it saves time or not. Pickup a good scripting language. Ruby or python. Spend time with business people on “why” they are doing something. Learn Excel. After awhile you will be incredibly good at highly useful business process stuff.
        • the_only_law 5y ago
          I wonder if this stuff pays well though. I recall someone showing me a position at Jane Street (since this thread was discussing HFTs) with at was looking for a VBA developer to develop some sort of integrations between their APIs and Excel sheets I guess someone in the company loved. My first though was “there’s no way this is paying what you typically see for Jane Street developer salaries”.
          • treeman79 5y ago
            Payed crap. It setup me up for success. Learned more in demand stuff and my pay is top notch.
  • distribot 5y ago
    Do you mean meaningful in the bull** jobs way or the moralistic way? I find the moralistic version confusing. I usually hear it applied to CEO pay, which last year was 350x the average worker. But what will ever feel like a fair or just differential? 7x? 3x? And what would be a fair metric? Are dentists less or more than social workers? What about dangerous jobs, are lumberjacks worth more than coal miners?
  • notfromhere 5y ago
    None, but neither does any job that makes double or triple digit multiples of what the US median worker makes.
• anonuser123456 5y ago
  Liquidity is not meaningless.
  • jeffreyrogers 5y ago
    They don't really create liquidity, but they did narrow the bid-ask spread. The "liquidity" they provide dries up when volatility spikes anyways (although that was always true, so not really a criticism of HFT).