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I worked in algo trading for years, eventually got out because quite frankly the level of risk I was carrying on my shoulders everyday for what I was being paid

I worked in algo trading for years, eventually got out because quite frankly the level of risk I was carrying on my shoulders everyday for what I was being paid were just way out of whack, I at least personally never got the huge pay days that people talked about until after I left finance for more pure tech. Interestingly, I worked at Knight and my team pioneered trying to blow up the firm, but that was in 2004, and things were much friendlier- instead of front page news, it was a small blurb on page 3 of the markets section of the WSJ. Anyway, I still have friends in that business. It hasn't really changed, they have too few people covering systems that are quite complex and while there are checks and such, no one really understands things entirely from end to end in detail that can prevent all problems. I will never invest directly in an investment bank- either through carelessness or maliciousness I could have easily caused a 9 figure loss, if not more, and there were probably a thousand other people in the same position. When I read the detailed writeup around this a few years back, I think by far the biggest issue was reusing a tag that had been previously used to denote which strategy to use. I understand why they may have chosen to do so, at the Big Bank I was working at, getting a new fix tag to be passed through all the layers properly would involve at least two other teams and coordinating releases and probably several weeks worth of meetings. If you just reuse an old value you can avoid all that since everything is already set up.

fullsend 4y ago
I appreciate your comment about pay. Recruiters will often tell me "it's finance so of course the pay will be substantial." Then when we get to talking numbers they're like "300k a year". Oh, you mean the going rate at a FAANG? And I have to move to New York or Chicago, work more hours, and actively work for people who I know are taking home paychecks with 7+ zeroes on them? Come on. Sometimes it's 400 plus bonus or whatever, which is based on fund performance and yada yada. But it feels way off. I had heard so much about the staggering paydays at these places but it seems you need an ML PHD or some trading chops to be part of that.
- gjs278 4y ago
- caffeine 4y ago
  The attitude that finance pays more is a leftover from a previous era. 10-15 years ago it was true: the profits from HFT were so also way, way bigger and split up amongst a much smaller group of firms. Now those firms are all in a completely competitive industry squeezing each other for basis points. Meanwhile the definition of a FAANG is that it has an effective monopoly, and these companies are taking in way more money than the HFT industry. (Netflix is losing its monopoly but we can’t really drop N from the acronym without a replacement..)
  - spacemanmatt 4y ago
    > but we can’t really drop N from the acronym without a replacement Huh, yeah. That would be quite a GAAF. Gotta come up with something before Netflix is forced out of the FAANG club.
    - snotrockets 4y ago
      I’ve seen MAAM being used.
      - sjtindell 4y ago
        When FB took it's huge hit I saw people using MANGA. But again if we drop the N...not great.
        astrange 4y ago
        GAMMA works if you add back Microsoft, who are doing better lately.
        usrn 4y ago
        FAGMAN is still my favorite.
        LilBytes 4y ago
        Typical edge lord naming from r/wallstreet bets, thats where this originated from wasn't it? Same as FAANG to FAAG, shocking but a touch funny.
- isogon 4y ago
  I cannot confirm this. ~300k is pay (excluding sign-on) fresh out of college at a big HFT -- sufficiently senior devs make 7 figures.
  - hatesinterviews 4y ago
    At our firm, the numbers are similar: $600k TC for new grads ($200k base, $100k minimum first year bonus, $300k signing bonus)
    - 22SAS 4y ago
      WTF! I am at an HFT firm in Chicago, this is insane. This seems to be a lot like an offer from Radix, or Headland, or maybe Algo Dev at HRT.
      - isogon 4y ago
        There is certainly much variance between the firms, especially the sign-on IME. People I know have turned down HRT core dev for big tech because their offers were unimpressive. I think an interesting target for comparison with big tech is Jane Street, since their culture and WLB are good, so the main QoL drawbacks of finance don't apply. A new grad will get ~300k at Jane Street, though probably not with this large a sign-on.
        22SAS 4y ago
        This is interesting, didn't know this about HRT Core Dev where offers were below FAANG. My understanding is that core devs are basically the folks who work on all the low latency stuff, so they'd be pretty well. Jane Street, from what I recall, is 300K (base + bonus) and 125K sign-on, and also it is non-negotiable. No idea what their numbers are like for experienced hires from competitors.
  - 22SAS 4y ago
    Honestly, that depends on the firm. There are same that do pay very well like this, eg: HRT, Jane Street (they are not an HFT though), Headlands, Radix. Some others like Jump, Optiver the pay varies depending on whether it's front office or back office. Where I work at, the new grad offers are slightly better than FAANG, but the growth is very good based on performance, we also pay very well to people coming in from a competitor.
- kevstev 4y ago
  Yeah, pay at the big banks is shit really, especially when you consider the utter lack of work/life balance. I left in 2013 making 150k, which was supposed to be supplemented by a ~40% bonus for the level I was at, but each year was "well its been a tough year..." and after getting a token amount one year, and then zeroes the next 2, after working 50-60 hour weeks, I was like I am not only done with this place, but this industry, and left for a 50% pay raise, my TC is now 4x where it was in those days. A neighbor of mine is more or less sitting in my exact seat there, and is somewhere in the 200-250k range. That said, I went back to finance to work at one of the premier hedge funds out there, and they actually lived up to their expectations in terms of comp, that place was more like a tech firm though than any other firm I have ever worked at aside for maybe Knight. 8% annual increases were normal there. You can look in my post history back to 2018 if you want the name, I recently left after 5 years there and just want to stay out of their crosshairs- they monitor social media aggressively and there is deferred comp at stake. At big banks, there are really only a very small number of people who are in tech that are getting paid- you have to know which questions to ask- where is the bonus pool coming from- are you "in the business" or the tech pool, which is a second class of citizen. I would have to be in a pretty bad place to ever consider going back to a bank, it was borderline abusive... always dangling the prospect of that big check that would make it worth it
  - 22SAS 4y ago
    Most quantitative hedge funds and prop trading firms are now following a very tech like culture since they realize now that technology is just as important as the strategies. To get the best engineers, especially from FAANG, they need to have a similar culture otherwise they'll have a hard time getting new hires.
    - skippyboxedhero 4y ago
      It depends what the strategy is. Frankly, a lot of what people refer to as "prop trading firms" and "quant hedge funds" on here are just market-makers...they are taking very little to no risk, a lot are just riding the wave of ETF growth. Even the ones that are running alpha, I have heard of a few strategies, and they are largely what you would expect: low-edge, crowded trades (frankly, a lot of it is LTCM-style stuff). That is why the business has become more tech-like, because actually taking risk is...quite risky. If you are going for alpha, you are trying to hire one guy out of thousands, that person knows what they are worth, etc. It is far easier to hire lots of devs on low wages and do the grunt work jobs that are less lucrative, but don't require being able to actually work out if someone is a decent earner. Man Group has their own department at Oxford Uni, I think Winton hires people out of their department at Cambridge...Man Group's shaky record is legendary (they are doing everything now that blew them up in 2008), Winton was top tier...not anymore. AQR is another one, although a more traditionally finance quant approach...it all turned out to be pure beta. The hybrid approach of hiring devs or ML PHds to generate alpha has only ever worked accidently. The firms that have been printing money from quant investing over the past five years have all been traditional hedge funds that incorporated quant methods into a fundamental process. And I expect that will continue because, bluntly, these firms know what the price of a security should be better than some busted factor model.
- asjre34marakf 4y ago
  Why pay more than market rate of a replaceable ML person? Is there any realistic path for a demonstrably smart and hardworking person into that 7+zeros club? Evidence suggests no: leetcode grinders and FAANGers are not in that club, and most of them will never even make it into the 6+zeros club. Net wealth -- sure, but not income.
  - 22SAS 4y ago
    It's all about making $$ for the firm. If the strategies developed are very profitable then 7-figures is definitely reachable for the researchers at a prop trading firm.
    - renewiltord 4y ago
      7 figs is 6 zeroes in his lingo, right? My man is looking for 8 figures.
      - 4jsfgja5aj 4y ago
        Yes, exactly, and nomenclature borrowed from the parent. (This is another throwaway, and I am responding.) > > "...all about making $$ for the firm. If the strategies developed..." The topic here is on offers to new hires -- not value delivered after time and work invested. Offers at market rate -- even in the FAANG world -- are not at 7 figures (6 zeros), definitely not at 10x that, and certainly not before the new employee has done anything worthwhile for the firm. There are individuals who do get such offers, but they are rare, they have done remarkable things previously, and they have a reputation they can bring to any conversation about compensation. Their market is not representative.
        22SAS 4y ago
        I am sorry, I misread it as getting to those numbers as an employee at a trading firm rather than as an applicant. I agree with you. The very, very rare cases where this has happened is for people with exceptional records elsewhere, and many times they are joining new places as partners rather than a regular employee.
munificent 4y ago
> I understand why they may have chosen to do so, at the Big Bank I was working at, getting a new fix tag to be passed through all the layers properly would involve at least two other teams and coordinating releases and probably several weeks worth of meetings. If you just reuse an old value you can avoid all that since everything is already set up. There's a good meta-lesson here which is that smart people will do dumb things if you make the smart thing require too much red tape or process. Processes can block stupidity, but they can also block intelligence if not well designed.
deleted 4y ago
[deleted]
quickthrower2 4y ago
Weirdly a market maker near me paid less than competitive wages for a dev. I think they rest on laurels that people want to work in finance badly.

fullsend 4y ago

I appreciate your comment about pay. Recruiters will often tell me "it's finance so of course the pay will be substantial." Then when we get to talking numbers they're like "300k a year". Oh, you mean the going rate at a FAANG? And I have to move to New York or Chicago, work more hours, and actively work for people who I know are taking home paychecks with 7+ zeroes on them? Come on. Sometimes it's 400 plus bonus or whatever, which is based on fund performance and yada yada. But it feels way off. I had heard so much about the staggering paydays at these places but it seems you need an ML PHD or some trading chops to be part of that.

gjs278 4y ago
caffeine 4y ago
The attitude that finance pays more is a leftover from a previous era. 10-15 years ago it was true: the profits from HFT were so also way, way bigger and split up amongst a much smaller group of firms. Now those firms are all in a completely competitive industry squeezing each other for basis points. Meanwhile the definition of a FAANG is that it has an effective monopoly, and these companies are taking in way more money than the HFT industry. (Netflix is losing its monopoly but we can’t really drop N from the acronym without a replacement..)
- spacemanmatt 4y ago
  > but we can’t really drop N from the acronym without a replacement Huh, yeah. That would be quite a GAAF. Gotta come up with something before Netflix is forced out of the FAANG club.
  - snotrockets 4y ago
    I’ve seen MAAM being used.
    - sjtindell 4y ago
      When FB took it's huge hit I saw people using MANGA. But again if we drop the N...not great.
      - astrange 4y ago
        GAMMA works if you add back Microsoft, who are doing better lately.
      - usrn 4y ago
        FAGMAN is still my favorite.
        LilBytes 4y ago
        Typical edge lord naming from r/wallstreet bets, thats where this originated from wasn't it? Same as FAANG to FAAG, shocking but a touch funny.
isogon 4y ago
I cannot confirm this. ~300k is pay (excluding sign-on) fresh out of college at a big HFT -- sufficiently senior devs make 7 figures.
- hatesinterviews 4y ago
  At our firm, the numbers are similar: $600k TC for new grads ($200k base, $100k minimum first year bonus, $300k signing bonus)
  - 22SAS 4y ago
    WTF! I am at an HFT firm in Chicago, this is insane. This seems to be a lot like an offer from Radix, or Headland, or maybe Algo Dev at HRT.
    - isogon 4y ago
      There is certainly much variance between the firms, especially the sign-on IME. People I know have turned down HRT core dev for big tech because their offers were unimpressive. I think an interesting target for comparison with big tech is Jane Street, since their culture and WLB are good, so the main QoL drawbacks of finance don't apply. A new grad will get ~300k at Jane Street, though probably not with this large a sign-on.
      - 22SAS 4y ago
        This is interesting, didn't know this about HRT Core Dev where offers were below FAANG. My understanding is that core devs are basically the folks who work on all the low latency stuff, so they'd be pretty well. Jane Street, from what I recall, is 300K (base + bonus) and 125K sign-on, and also it is non-negotiable. No idea what their numbers are like for experienced hires from competitors.
- 22SAS 4y ago
  Honestly, that depends on the firm. There are same that do pay very well like this, eg: HRT, Jane Street (they are not an HFT though), Headlands, Radix. Some others like Jump, Optiver the pay varies depending on whether it's front office or back office. Where I work at, the new grad offers are slightly better than FAANG, but the growth is very good based on performance, we also pay very well to people coming in from a competitor.
kevstev 4y ago
Yeah, pay at the big banks is shit really, especially when you consider the utter lack of work/life balance. I left in 2013 making 150k, which was supposed to be supplemented by a ~40% bonus for the level I was at, but each year was "well its been a tough year..." and after getting a token amount one year, and then zeroes the next 2, after working 50-60 hour weeks, I was like I am not only done with this place, but this industry, and left for a 50% pay raise, my TC is now 4x where it was in those days. A neighbor of mine is more or less sitting in my exact seat there, and is somewhere in the 200-250k range. That said, I went back to finance to work at one of the premier hedge funds out there, and they actually lived up to their expectations in terms of comp, that place was more like a tech firm though than any other firm I have ever worked at aside for maybe Knight. 8% annual increases were normal there. You can look in my post history back to 2018 if you want the name, I recently left after 5 years there and just want to stay out of their crosshairs- they monitor social media aggressively and there is deferred comp at stake. At big banks, there are really only a very small number of people who are in tech that are getting paid- you have to know which questions to ask- where is the bonus pool coming from- are you "in the business" or the tech pool, which is a second class of citizen. I would have to be in a pretty bad place to ever consider going back to a bank, it was borderline abusive... always dangling the prospect of that big check that would make it worth it
- 22SAS 4y ago
  Most quantitative hedge funds and prop trading firms are now following a very tech like culture since they realize now that technology is just as important as the strategies. To get the best engineers, especially from FAANG, they need to have a similar culture otherwise they'll have a hard time getting new hires.
  - skippyboxedhero 4y ago
    It depends what the strategy is. Frankly, a lot of what people refer to as "prop trading firms" and "quant hedge funds" on here are just market-makers...they are taking very little to no risk, a lot are just riding the wave of ETF growth. Even the ones that are running alpha, I have heard of a few strategies, and they are largely what you would expect: low-edge, crowded trades (frankly, a lot of it is LTCM-style stuff). That is why the business has become more tech-like, because actually taking risk is...quite risky. If you are going for alpha, you are trying to hire one guy out of thousands, that person knows what they are worth, etc. It is far easier to hire lots of devs on low wages and do the grunt work jobs that are less lucrative, but don't require being able to actually work out if someone is a decent earner. Man Group has their own department at Oxford Uni, I think Winton hires people out of their department at Cambridge...Man Group's shaky record is legendary (they are doing everything now that blew them up in 2008), Winton was top tier...not anymore. AQR is another one, although a more traditionally finance quant approach...it all turned out to be pure beta. The hybrid approach of hiring devs or ML PHds to generate alpha has only ever worked accidently. The firms that have been printing money from quant investing over the past five years have all been traditional hedge funds that incorporated quant methods into a fundamental process. And I expect that will continue because, bluntly, these firms know what the price of a security should be better than some busted factor model.
asjre34marakf 4y ago
Why pay more than market rate of a replaceable ML person? Is there any realistic path for a demonstrably smart and hardworking person into that 7+zeros club? Evidence suggests no: leetcode grinders and FAANGers are not in that club, and most of them will never even make it into the 6+zeros club. Net wealth -- sure, but not income.
- 22SAS 4y ago
  It's all about making $$ for the firm. If the strategies developed are very profitable then 7-figures is definitely reachable for the researchers at a prop trading firm.
  - renewiltord 4y ago
    7 figs is 6 zeroes in his lingo, right? My man is looking for 8 figures.
    - 4jsfgja5aj 4y ago
      Yes, exactly, and nomenclature borrowed from the parent. (This is another throwaway, and I am responding.) > > "...all about making $$ for the firm. If the strategies developed..." The topic here is on offers to new hires -- not value delivered after time and work invested. Offers at market rate -- even in the FAANG world -- are not at 7 figures (6 zeros), definitely not at 10x that, and certainly not before the new employee has done anything worthwhile for the firm. There are individuals who do get such offers, but they are rare, they have done remarkable things previously, and they have a reputation they can bring to any conversation about compensation. Their market is not representative.
      - 22SAS 4y ago
        I am sorry, I misread it as getting to those numbers as an employee at a trading firm rather than as an applicant. I agree with you. The very, very rare cases where this has happened is for people with exceptional records elsewhere, and many times they are joining new places as partners rather than a regular employee.

munificent 4y ago

> I understand why they may have chosen to do so, at the Big Bank I was working at, getting a new fix tag to be passed through all the layers properly would involve at least two other teams and coordinating releases and probably several weeks worth of meetings. If you just reuse an old value you can avoid all that since everything is already set up. There's a good meta-lesson here which is that smart people will do dumb things if you make the smart thing require too much red tape or process. Processes can block stupidity, but they can also block intelligence if not well designed.

deleted 4y ago

[deleted]

quickthrower2 4y ago

Weirdly a market maker near me paid less than competitive wages for a dev. I think they rest on laurels that people want to work in finance badly.