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

bloomberg.com

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

#151

Post by jabretti »

alexcnwy wrote: post #130
chollida1 wrote: post #2

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 happ…

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.

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.

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

#152

Post by physguy1123 »

bousaid wrote: post #118
aaronchall wrote: post #114

Earlier quoted context omitted.

> 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 i…

If you want to learn more I’d also suggest reading a book called Flash Boys. It’ll give you huge insight into what OP is talking about.

Flash boys is mostly incorrect and at points misleading, and this is coming from somebody whose entire job is trading systems to avoid hft "picking off" my institutions orders/market activity. I can write more once off mobile but there's good material online about why that's better written than what I would write.

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

#153

Post by shostack »

otakucode wrote: post #57
ng12 wrote: post #39

Earlier quoted context omitted.

> compensation paid purely in cash, no stock options/RSUs Hands down my favorite part of working in finance. Better salary, no bullshit.

Regardless of what industry you are in, the closer you are to money, the more honestly you will be paid. This is why in many companies some of the best paid people (sometimes more than executives) are in sales. It is quite difficult to tell an employee that you can only manage a small raise if they can say "I brought in $15 million in business this year." If they have no discernible way to determine what they have ea…

This was one of the reasons I left the agency world. I was leading the strategy part and pitching for new business (not to mention scoping the work and contract) and won 7 figures in new business we would not have won otherwise. Didn't get a dime in commission or bonus (or even a raise that year) because I wasn't officially on the sales team and was salaried. Learned my lesson there.

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

#154

Post by golergka »

FLUX-YOU wrote: post #106
smallnamespace wrote: post #38

Earlier quoted context omitted.

> 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…

>Anecdotally though, I've met plenty of coders who did this to themselves by refusing to learn more about the domain or the business. Anything outside of learning enough to do your job should be at the business's expense. 1) some fields are not good for self-teaching. It leaves the possibility open to misunderstanding and writing code to that misunderstanding 2) the business will probably have a good idea of conferen…

> Anything outside of learning enough to do your job should be at the business's expense.

There's no "should" here — it's an open market with a lot of agents. You're free to pursue certain working conditions and then look for employer that will agree with them. And another developer is also free to go an extra mile and ask something extra in return.

This is why I'm against any kind of unionizing for developers, by the way — too many different situations and opinions about what our working conditions should be.

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

#155

Post by golergka »

colordrops wrote: post #64
chollida1 wrote: post #2

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 happ…

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…

I don't work in finance, but I see the modern global financial system as one of the greatest achievements of humankind and one of the main reason behind humanity's prosperity. I would love to work there if I had the skills or patience to gain them (instead, I work in gamedev, where I acquired immense domain knowledge over the years).

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

#156

Post by golergka »

bousaid wrote: post #117
aaronchall wrote: post #114

Earlier quoted context omitted.

> 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 i…

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 sign…

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.

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

#157

Post by mrchicity »

otakucode wrote: post #52

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, on…

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-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.

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

#158

Post by sn9 »

colordrops wrote: post #64
chollida1 wrote: post #2

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 happ…

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…

To add an angle from someone who shares your concerns about the financial industry, the high pay makes it so you can donate large amounts of money to charitable organizations of your choice.

It's actually a recommended route in the effective altruism community for those with the aptitude.

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

#159

Post by brahj123 »

marvin wrote: post #149
naturalgradient wrote: post #3

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?

As a Norwegian software engineer, my mind boggles when reading the salary discussions of engineers based in the big cities in the US. Most engineers here are paid a small fraction of the numbers you cite, even though we are decidedly a first-world country. I guess good ML people will probably get over 100k here, but I haven't heard of anyone near 200k. Any thoughts as to what causes the massive difference?

supply and demand

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

#160

Post by dreamdu5t »

hacker_9 wrote: post #140
blunte wrote: post #98

Earlier quoted context omitted.

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 industr…

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…

People aren’t talking about money itself, they’re talking about hedge funds and prop shops and traders, which didn’t exist prior to the 70s and even Wall Street traders weren’t trading pure securities until the early 1900s (it was slaves and real shares before then) Economy worked just fine without the quants, and ever since trading has been a major segment of Wall Street they’ve completely crashed the markets three times and had to be bailed out by the fed (1929, 1973, and 2008). If you take the capital allocation justification at face value they suck at it. They’re losers underwritten by the government not winners smartly allocating capital.
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