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I am an HFT Programmer

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Re: I am an HFT Programmer

#31

Post by Astrohacker »

hugh3 wrote: post #25
Astrohacker wrote: post #19

So he does what any good programmer does, but he earns 5x as much. One reason they earn so much is that the companies they work for have corrupt ties to the Federal Reserve and the US government, and when the money supply is inflated, they get all the new money, and can thus pay their programmers (and all employees/partners/shareholders/owners) with the new money. Their salaries come at the expense of people who don'…

Fun fact: the people on the internet who talk about economics the most appear to be the people who understand it the least. This is unusual. I mean, the people on the internet who talk about Batman the most generally turn out to know a lot more about Batman than I do. And the people on the internet who talk about tae kwan do the most turn out to know more about tae kwan do than I do. But for economics it is, for some…

Fun fact: Everyone knows the finance industry is highly corrupt, but point out the mechanism of the corruption and you will be downvoted.

Re: I am an HFT Programmer

#32

Post by orijing »

hugh3 wrote: post #25
Astrohacker wrote: post #19

So he does what any good programmer does, but he earns 5x as much. One reason they earn so much is that the companies they work for have corrupt ties to the Federal Reserve and the US government, and when the money supply is inflated, they get all the new money, and can thus pay their programmers (and all employees/partners/shareholders/owners) with the new money. Their salaries come at the expense of people who don'…

Fun fact: the people on the internet who talk about economics the most appear to be the people who understand it the least. This is unusual. I mean, the people on the internet who talk about Batman the most generally turn out to know a lot more about Batman than I do. And the people on the internet who talk about tae kwan do the most turn out to know more about tae kwan do than I do. But for economics it is, for some…

Great observation. That's more true on Reddit and Hacker News than Quora, for instance. I think that's because your title (or any other affiliation with the topic) is prominently displayed next to your name.

Re: I am an HFT Programmer

#33

Post by radq »

danso wrote: post #15
veyron wrote: post #10

Earlier quoted context omitted.

The reason why profits don't flow down is because the buck doesn't stop with them. There are plenty of developers making much more, but in those cases they take the fall if a trading strategy loses money. Those developers that do take the risks make more if the firm makes more money, but also lose their jobs if they make a really bad trade. Same is true in other software development outfits as well. Lower-level progr…

Why would developers be making trading strategy?

HFT?

Re: I am an HFT Programmer

#34

Post by zedshaw »

This is a huge load of bullshit. 99% of the "banking programmers" are some of the worst coders in the world. A vast majority of them just babysit a Bloomberg terminal, barely understanding the supposed math they use all day. Others just babysit an Excel spreadsheet, or worse, develop whole applications in Excel then try to get a real programmer to "build it". The lower echelons are even worse and just make shitty C# and Java web apps that are huge wastes of money.

The supposed "C++ optimizer" guys are some of the worst. They're the guys who go off and make algorithms they think are blazing fast, and sure for one tiny little use maybe, but then when you actually see the code it's a huge convolute mess for nothing. It's usually riddled with bugs, not in source control (Clearcase), only if it is only because the Compliance Dept. told them to, and they refuse to share because they're too damn competitive.

I've even seen projects by some of the top guys that were built by hand. No make file because the dude didn't trust make.

Don't even get me started about these jackasses that think their huge monolithic shitpiles of Java code are somehow superior, yet the only reason their code can actually run is because some bank sunk millions (and maybe billions) into infrastructure just to run that crap even moderately fast. I had one project where the damn process used so much ram per request they had to go buy an Azul box just to make it run even at 2 req/sec. That was their "cream of the crop" coders.

Finally, they constantly do this thing where they say, "Oh man my code is so awesome it's written in C++ and is so fast. No you can't see it. Oh but I make $500k a year!" They equate how awesome their code is by how much they make, but rarely have any idea of what other people's code is like.

Honey, if all you can make from your corrupt financial masters is $500k while they make billions and trillions then you're not a very good coder. And if I can't see your damn code, then you're a damn liar.

Take it from a guy who thought he'd run into some quality in the finance world. There is none, they just have so much money they can't help but make tons of it.

Re: I am an HFT Programmer

#35

Post by orijing »

It's true, and it's somewhat discouraging. When I was in my last year in college, I applied to various types of companies, in different stages of life, plus a quant fund.

In the end, while the salary/potential bonus for the fund was very enticing (despite not having graduated yet), I stuck with the middle-of-the-road tech company. (I also looked at Google and Dropbox but decided to go to FB). Google was desperate for people, and threw money at everyone who had a Facebook offer. I like that they offered $$$, but I knew that most people there aren't compensated as well, which suggested that future compensation might not be as enticing. Dropbox was actually really cool (the people I met there), and I was thinking about it a lot, but in the end, I just wanted to stay where I've been, and work in Palo Alto. (I know, it's weird: All my friends want to work in SF).

But it sucks, because while everyone thinks I took FB for the money ("It's pre IPO!"), that's the farthest from the truth. In fact, they're so surprised that I decided not to work in New York. "Are you stupid? That's more money than any of your peers make out of college!" Not to mention, the people there I met through two straight days of technical questions (compared to Google's easy-peasy 4, 45 minute sessions) were some of the smartest I've met. And I like working with smart people.

I was afraid that if I'd gone on that route, it would affect me as a person. Don't get me wrong: I've studied financial institutions and believe that they produce value, but in the end, it's more awesome to tell friends and family that I ship products rather than arb derivative contracts. I figured, the money will come.

What the hell are you gonna do with 500k a year, anyway?

Re: I am an HFT Programmer

#36

Post by blix »

hugh3 wrote: post #14

How to get a really good salary: 1. Be really smart 2. Be willing to do something that's deadly boring to most smart people Me? I'm a scientist. I'm not gonna write your goddamn binary tree pricing algorithm or remove your varicose veins or argue about some dull point of legal text in court. But I'm sure I'd be a lot richer if I did. (In other news, man, those grapes sure look sour, I'm glad I can't reach 'em.)

Replace one of your examples of 'boring work' with "writing grant proposals" or "performing the same experiment over and over again" and you have the perspective of the non-scientists.

I think you're confusing "deadly boring to most smart people" with "deadly boring to me".

Re: I am an HFT Programmer

#37

Post by jasonkester »

Quick quiz:

Given the ability to charge $100/hr for your time (which is what this guy's rate works out to), would you prefer to make:

  a.) $500,000 by working 100hr weeks

  b.) $250k by working 50hr weeks
Me? I tend to lean toward secret option c: make $100k by working 25 40hr weeks, then spend the rest of the year squandering it on a beach with tall cold beers, good surfing/climbing and good wifi.

Gotta keep them priorities straight.

Re: I am an HFT Programmer

#38

Post by bfung »

Programming skill is only a small part of why Wall Street Programmers earn top salary. The major factor is that their industry is very close to the money, and their jobs are close to the money. As a result, it's easy to measure someone's worth in terms of currency. In trading, if your group is making money, and you can convince everyone else (or just the boss) that you are worth x% of the profits, then there you go. As your industry and job function moves further and further away from the money, it gets harder to measure your performance in terms of raw "dollars", but the game to convince everyone else your currency worth still applies.

Re: I am an HFT Programmer

#39

Post by cletus »

I worked for a time in finance and investment banking. Problem-wise it can be pretty interesting but it's important to distinguish between two classes of developers.

1. Traders; and

2. Non-traders.

Engineers who are traders are typically called "quants" (quantitative traders) as they write software that employs trading strategies to make money, as one or more of spread trading (trading between the bid-ask spread), prop trading (taking a position in the market) and arbitrage (of which HFT is merely the latest incarnation; some may dispute this definition).

Traders of all kinds have their bonus defined as a percentage of the profit they make. That percentage can be as high at 10%. In 2007 there were some Wall Street traders who walked home with $50m+ for the year. I remember seeing an AmA on reddit from a quant who took home $20m.

While maths is obviously important, it is not (IMHO) as important as psychology. It takes a special kind of individual who can hold a position worth billions of dollars and make rational decisions. Human psychology is typically completely wrong for trading: people hold on to losers too long ("I'll sell when I get my money back") and sell winners too soon.

I know enough about myself to know I could never do that. Some can and they get rewarded for it.

The second class of engineer, the non-trader, earns a respectable salary with benefits as compared to other software engineers. They are however the second worst paid employees at an investment bank (the worst are support people). All those business types who join IB, assuming they survive, will typically have a salary and career trajectory that will dwarf that of any engineer within a few years.

The only way for an engineer to make real money is to be a quant, found a startup or join an early stage startup. In the last few years the competition for engineers has heated up to the point where engineers are (or can be) more adequately compensated for their contribution.

The other thing that happened is the cost of seeding a startup went from $5m to $50,000 in the last decade, almost all of which is engineer time. This makes engineers just that much more valuable.

As far as not having some kind of positive impact, working in investment banking can be exactly that. People like to demonize the finance industry with some justification but it does a lot of good too.

You want to buy a house? Well the only reason you can get a loan is that investor (and/or depositor) funds are matched to you. In the last few decades securitization (MBS ie mortgage-backed securities) have revolutionized this market. On the other hand, the subprime collapse should, in my mind, lead to criminal prosecutions across the entire finance and insurance sectors.

Spread trading (or "market making") is also misunderstood. People see market makers as scalpers when in fact they're providing a valuable service: they're creating liquidity. The reason you can buy or sell shares at any time (rather than waiting for a seller or buyer to show up) is because of market makers.

IPOs are a complicated business. They're possible because of the finance industry as well. Although, curiosity, VC as it exists in the Internet startup world is almost completely unrelated to the finance sector. It's basically a byproduct of university endowments.

Still, I think I'm done with that industry (I now work for Google) typically because IB types aren't, in my experience, very nice people to work with plus you're near the bottom of the totem pole.

Re: I am an HFT Programmer

#40

Post by Astrohacker »

burgerbrain wrote: post #30
Astrohacker wrote: post #19

So he does what any good programmer does, but he earns 5x as much. One reason they earn so much is that the companies they work for have corrupt ties to the Federal Reserve and the US government, and when the money supply is inflated, they get all the new money, and can thus pay their programmers (and all employees/partners/shareholders/owners) with the new money. Their salaries come at the expense of people who don'…

If he does what you do but makes 5 times as much as you, then you'd be a fool to not apply to such jobs.

Maybe, but there are a number of reasons why you might not want to:

1) The US financial system is unsustainable. Specialize in it and you will find yourself out of a job eventually.

2) It's unethical. If you understand that your excess salary is coming from wealth that is stolen from people through the mechanism of inflation, then you may want to opt out of the corrupt system for peace of mind.

3) If the people actually understood how much they were screwed by this system, they would come after bankers, and that might include programmers at banks. This sort of happened in 2008 when bankers received threats. If the US system collapsed, they might receive more than threats. Note that, although traders and bankers are not the same, traders often use leverage with new money created by the banks and the Fed, and thus are just one hop away from the new money and are almost as culpable as the bankers. And besides, the angry hordes might not make such a subtle distinction; anyone associated with finance would be subject to retribution.

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