4 ms·

Geeks trump alpha males as algorithms dominate Wall Street

8 points by r11t 17y ago

geebee 17y ago
I'm always happy to hear that geeks are trumping suits, but if suits can convince geeks to give up on startups and instead spend their lives writing trading algorithms, even for a lot of money, have the geeks really won?
- ogrisel 17y ago
  money?
- Dilpil 17y ago
  Who says the firms are led by suits? Many of the founders of these firms are math or CS phds.
  - Imprecate 17y ago
    Most of the big high-frequency firms were founded by former commodities pit traders who knew their days were numbered and saw opportunity in the growth of electronic markets. They are not suits by any means, but not all are technical or math gurus, either. A good example would be Dave Cummings, former KCBOT trader and founder of TradeBot (an automated trading firm) and BATS (an electronic stock exchange that's grown very rapidly over the past few years). He's actually moved into venture capital recently (http://www.tradebotventures.com/ http://www.tradebotventures.com/). ETA: Though to be fair he does have an engineering background. Some others I can think of (e.g., guys who founded GETCO) don't.
  - geebee 17y ago
    Fair enough. I suppose the suits might not have had anything to do with this. But I still feel a twinge of regret when I read these articles. I'm skeptical about the value of these activities. I don't think they contribute much to the general wealth (the contributions may even be negative) and I definitely share in the resentment many people feel these days toward the banking industry. A lot of folks try to equate this with a resentment of wealth or capitalism, but I think that's incorrect. Americans still greatly admire people who become wealthy, and generally don't view the economy as a zero sum game. For instance, nobody (almost) resents the millionaires and billionaires at google. While I'm not sure if your average American has thought it through this carefully, I think it comes down to the perception that startups create wealth, whereas wall street takes wealth. That's too simplistic, I know. But I don't think it's entirely incorrect, either. I guess I'm just a little sorry to see geeks displaying the behavior I always associated with suits - involving themselves in activities of dubious economic value for the sole purpose of enriching themselves. Especially when geeks have so many ways of becoming wealthy that also add tremendously to the general wealth.
mingdingo 17y ago
This was posted here yesterday...
- cwan 17y ago
  Different source: http://news.ycombinator.com/item?id=973490 http://news.ycombinator.com/item?id=973490
Imprecate 17y ago
I work for one of these firms. I think the article's creating a false dichotomy. It's nothing like academia or a stereotypical think-tank. The environment is very aggressive, high-pressure, and results oriented. Nobody cares about your pedigree so long as your ideas work and make them money. Trading is one of the most purely competitive businesses in the world. Most of the players are basically alpha male types who can do math and code. I actually think it's a great fit for people who are aggressive and entrepreneurial. (And no, we're not front-running your orders or clubbing baby seals, despite the media's insistence otherwise.)
- pwnstigator 17y ago
  Accurate synopsis. Also, the work isn't very interesting from a technical perspective, although being surrounded by really smart people is nice. Most quant jobs, unfortunately, require C++, due to legacy code. Haskell seems to be making in-roads, though.
  - Imprecate 17y ago
    Depends on what interests you. I think massive distributed systems processing huge amounts of data using exotic network technologies and super tight code are interesting, but it's not everyone's bag. C++ is still used a lot because it's fast and allows you to efficiently communicate with the hardware and OS. I'll admit it's ugly, but it's a good choice for certain systems. On the pure analytics side, most quants seem to be moving to more modern and flexible languages, where prototyping ideas quickly is more important than latency. Jane St Capital uses OCaml extensively (http://video.google.com/videoplay?docid=-2336889538700185341# http://video.google.com/videoplay?docid=-2336889538700185341...). I'm curious to see if Google's Go makes any inroads. It seems well-suited to building these types of systems and does away with some of C++'s baggage.
- deleted 17y ago
  [deleted]
- bd_at_rivenhill 17y ago
  I'm in the business as well, and the thing that I really appreciate about it after reading HN for a few years is this: no customers. You don't have to worry about sales and marketing if you're in a prop shop that trades its own capital, you just write software that makes money in the market and that's all you need to worry about.

8 points by r11t 17y ago

I'm always happy to hear that geeks are trumping suits, but if suits can convince geeks to give up on startups and instead spend their lives writing trading algorithms, even for a lot of money, have the geeks really won?

ogrisel 17y ago
money?
Dilpil 17y ago
Who says the firms are led by suits? Many of the founders of these firms are math or CS phds.
- Imprecate 17y ago
  Most of the big high-frequency firms were founded by former commodities pit traders who knew their days were numbered and saw opportunity in the growth of electronic markets. They are not suits by any means, but not all are technical or math gurus, either. A good example would be Dave Cummings, former KCBOT trader and founder of TradeBot (an automated trading firm) and BATS (an electronic stock exchange that's grown very rapidly over the past few years). He's actually moved into venture capital recently (http://www.tradebotventures.com/ http://www.tradebotventures.com/). ETA: Though to be fair he does have an engineering background. Some others I can think of (e.g., guys who founded GETCO) don't.
- geebee 17y ago
  Fair enough. I suppose the suits might not have had anything to do with this. But I still feel a twinge of regret when I read these articles. I'm skeptical about the value of these activities. I don't think they contribute much to the general wealth (the contributions may even be negative) and I definitely share in the resentment many people feel these days toward the banking industry. A lot of folks try to equate this with a resentment of wealth or capitalism, but I think that's incorrect. Americans still greatly admire people who become wealthy, and generally don't view the economy as a zero sum game. For instance, nobody (almost) resents the millionaires and billionaires at google. While I'm not sure if your average American has thought it through this carefully, I think it comes down to the perception that startups create wealth, whereas wall street takes wealth. That's too simplistic, I know. But I don't think it's entirely incorrect, either. I guess I'm just a little sorry to see geeks displaying the behavior I always associated with suits - involving themselves in activities of dubious economic value for the sole purpose of enriching themselves. Especially when geeks have so many ways of becoming wealthy that also add tremendously to the general wealth.

mingdingo 17y ago

This was posted here yesterday...

cwan 17y ago
Different source: http://news.ycombinator.com/item?id=973490 http://news.ycombinator.com/item?id=973490

Imprecate 17y ago

I work for one of these firms. I think the article's creating a false dichotomy. It's nothing like academia or a stereotypical think-tank. The environment is very aggressive, high-pressure, and results oriented. Nobody cares about your pedigree so long as your ideas work and make them money. Trading is one of the most purely competitive businesses in the world. Most of the players are basically alpha male types who can do math and code. I actually think it's a great fit for people who are aggressive and entrepreneurial. (And no, we're not front-running your orders or clubbing baby seals, despite the media's insistence otherwise.)

pwnstigator 17y ago
Accurate synopsis. Also, the work isn't very interesting from a technical perspective, although being surrounded by really smart people is nice. Most quant jobs, unfortunately, require C++, due to legacy code. Haskell seems to be making in-roads, though.
- Imprecate 17y ago
  Depends on what interests you. I think massive distributed systems processing huge amounts of data using exotic network technologies and super tight code are interesting, but it's not everyone's bag. C++ is still used a lot because it's fast and allows you to efficiently communicate with the hardware and OS. I'll admit it's ugly, but it's a good choice for certain systems. On the pure analytics side, most quants seem to be moving to more modern and flexible languages, where prototyping ideas quickly is more important than latency. Jane St Capital uses OCaml extensively (http://video.google.com/videoplay?docid=-2336889538700185341# http://video.google.com/videoplay?docid=-2336889538700185341...). I'm curious to see if Google's Go makes any inroads. It seems well-suited to building these types of systems and does away with some of C++'s baggage.
deleted 17y ago
[deleted]
bd_at_rivenhill 17y ago
I'm in the business as well, and the thing that I really appreciate about it after reading HN for a few years is this: no customers. You don't have to worry about sales and marketing if you're in a prop shop that trades its own capital, you just write software that makes money in the market and that's all you need to worry about.