6 ms·

Not only are the platforms table stakes they are the more straightforward part to build. Even at the bleeding edge of latency you can usually work your way to t

Not only are the platforms table stakes they are the more straightforward part to build. Even at the bleeding edge of latency you can usually work your way to the limits of your platform budget without having to find anything novel. The strategies though are where the discovery is. There are a few strategies that are well known and still profitable but those are largely consolidated to the biggest firms. For everything else it’s a discovery process. And done strategies are only profitable for very short regimes. I miss it sometimes too, but so much has been consolidated it’s largely a big firm world now.

ye-olde-sysrq 3y ago
"they are the more straightforward part to build" More straightforward, heh, sure. But still damnably complicated. Which just goes to show how much money and how much engineering talent is invested in this world that these things are so taken for granted.
- ilyt 3y ago
  So many intelligent people applied for something that has no value whatsoever to humanity regardless of how you look at it.
  - allenrb 3y ago
    Essentially yes. When I worked in algo trading, it never bothered me that we were extracting profits from the markets, nor that we served little social good. It felt like a step up from where I’d been before (being told that we were making the world a better place, when every engineer knew otherwise.) At least we weren’t making things obviously worse. What did bother me, and was acknowledged by my coworkers, was how much top talent was being pulled away from productive tasks to essentially wank around. Not just technologists either, but all sorts of mathematicians and scientists were drawn to the flame. We as a society have managed to allocate so many of the “best and brightest” to either fintech wankery or placing ads in front of eyeballs. It’s enough to make one want to give up on capitalism, except that everything else appears to be worse.
    - tomcam 3y ago
      Seems like every person I've ever met in M&A has ended up hating life because of their career choice. They seem to burn out in 5 years or so after salting away a million bucks or 3. Was that your feeling doing the HFT thing?
      - finexplained 3y ago
        I work at an HFT firm. Most fun I've ever had.
        maest 3y ago
        But is that because of the excellent WLB and pay or because of the social impact?
        TheAlchemist 3y ago
        The jobs in algo trading are very interesting for technically - mathéamtically inclined people. It’s really one of those fields where you have a direct impact on the results of your - measurable in additional dollars made. There is 0 social impact. That’s the downside of course - but hey, how many jobs out there are really having any kind of positive social impact ? Not 0, but close to it.
        ir123 3y ago
        I think there is some impact, for finding the correct price of things.
        MagnumOpus 3y ago
        That impact is not made by HFT - finding the right risk premia for different investments is very valuable but that is a signal measured over days/weeks/months because actual capital investment decisions take that long. Intraday financial games are zero-sum. What HFTs gain, they leech away from mutual funds and pension funds and retail investors and market makers who operate over a longer horizon.
  - dougSF70 3y ago
    Facebook Ads are equally valueless.
    - deleted 3y ago
      [deleted]
  - maest 3y ago
    HFT is _arguably_ better than advertising for society.
  - latency-guy2 3y ago
    Whats the point in making a flyby comment without even mildly establishing the content in it?
deleted 3y ago
[deleted]
DrBazza 3y ago
> it’s largely a big firm world now. Largely, though I receive 1 or 2 job specs every week for start ups with the keywords 'hft' and 'low latency'. Admittedly there's going to be duplication there if you read them closely. I think it's a bit of a myth that (ignoring FPGAs) that writing a low-latency software trading system is a time/cost expensive process. Anecdata = I worked at two firms where we did a rewrite from scratch with teams of 5-6 people and traded in the market within 3 months. I'd argue a senior dev that's been around the block a few times could achieve similar when you remove corporate politics, and bikeshedding over design. The big firm part is paying for multiple quants at $200k++ to come up with strategies and historic market data access for trading models. Small firms are getting backing as long as the co-founders are 'ex-CxO from MegaCorp'.
- dm3 3y ago
  > I think it's a bit of a myth that (ignoring FPGAs) that writing a low-latency software trading system is a time/cost expensive process. This depends a lot on the complexity of the trading system and the trading venue specifics. A system to trade single stocks or futures can be built, certified and running in 3 months. A system for options market making will take a lot longer.
  - DrBazza 3y ago
    Yes, stocks and futures was exactly what I was talking about. Though we also hit the market with options models within another couple of months. The big costs for small firms are historic data (if you don't have any), colo, distance to exchange, and number of connections. From the number of job specs I see, it feels like the HFT/low latency market place is healthy enough that there are always new firms appearing. It's competitive, so it's hardly surprising that if someone has new ideas they'll find a backer.

ye-olde-sysrq 3y ago

"they are the more straightforward part to build" More straightforward, heh, sure. But still damnably complicated. Which just goes to show how much money and how much engineering talent is invested in this world that these things are so taken for granted.

ilyt 3y ago
So many intelligent people applied for something that has no value whatsoever to humanity regardless of how you look at it.
- allenrb 3y ago
  Essentially yes. When I worked in algo trading, it never bothered me that we were extracting profits from the markets, nor that we served little social good. It felt like a step up from where I’d been before (being told that we were making the world a better place, when every engineer knew otherwise.) At least we weren’t making things obviously worse. What did bother me, and was acknowledged by my coworkers, was how much top talent was being pulled away from productive tasks to essentially wank around. Not just technologists either, but all sorts of mathematicians and scientists were drawn to the flame. We as a society have managed to allocate so many of the “best and brightest” to either fintech wankery or placing ads in front of eyeballs. It’s enough to make one want to give up on capitalism, except that everything else appears to be worse.
  - tomcam 3y ago
    Seems like every person I've ever met in M&A has ended up hating life because of their career choice. They seem to burn out in 5 years or so after salting away a million bucks or 3. Was that your feeling doing the HFT thing?
    - finexplained 3y ago
      I work at an HFT firm. Most fun I've ever had.
      - maest 3y ago
        But is that because of the excellent WLB and pay or because of the social impact?
        TheAlchemist 3y ago
        The jobs in algo trading are very interesting for technically - mathéamtically inclined people. It’s really one of those fields where you have a direct impact on the results of your - measurable in additional dollars made. There is 0 social impact. That’s the downside of course - but hey, how many jobs out there are really having any kind of positive social impact ? Not 0, but close to it.
        ir123 3y ago
        I think there is some impact, for finding the correct price of things.
        MagnumOpus 3y ago
        That impact is not made by HFT - finding the right risk premia for different investments is very valuable but that is a signal measured over days/weeks/months because actual capital investment decisions take that long. Intraday financial games are zero-sum. What HFTs gain, they leech away from mutual funds and pension funds and retail investors and market makers who operate over a longer horizon.
- dougSF70 3y ago
  Facebook Ads are equally valueless.
  - deleted 3y ago
    [deleted]
- maest 3y ago
  HFT is _arguably_ better than advertising for society.
- latency-guy2 3y ago
  Whats the point in making a flyby comment without even mildly establishing the content in it?

deleted 3y ago

[deleted]

DrBazza 3y ago

> it’s largely a big firm world now. Largely, though I receive 1 or 2 job specs every week for start ups with the keywords 'hft' and 'low latency'. Admittedly there's going to be duplication there if you read them closely. I think it's a bit of a myth that (ignoring FPGAs) that writing a low-latency software trading system is a time/cost expensive process. Anecdata = I worked at two firms where we did a rewrite from scratch with teams of 5-6 people and traded in the market within 3 months. I'd argue a senior dev that's been around the block a few times could achieve similar when you remove corporate politics, and bikeshedding over design. The big firm part is paying for multiple quants at $200k++ to come up with strategies and historic market data access for trading models. Small firms are getting backing as long as the co-founders are 'ex-CxO from MegaCorp'.

dm3 3y ago
> I think it's a bit of a myth that (ignoring FPGAs) that writing a low-latency software trading system is a time/cost expensive process. This depends a lot on the complexity of the trading system and the trading venue specifics. A system to trade single stocks or futures can be built, certified and running in 3 months. A system for options market making will take a lot longer.
- DrBazza 3y ago
  Yes, stocks and futures was exactly what I was talking about. Though we also hit the market with options models within another couple of months. The big costs for small firms are historic data (if you don't have any), colo, distance to exchange, and number of connections. From the number of job specs I see, it feels like the HFT/low latency market place is healthy enough that there are always new firms appearing. It's competitive, so it's hardly surprising that if someone has new ideas they'll find a backer.