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How to Build an Exchange (2017)

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Re: How to Build an Exchange (2017)

#81

Post by caddemon »

Ntrails wrote: post #77
caddemon wrote: post #68

Earlier quoted context omitted.

Jane Street definitely does not have a non-compete. Citadel does though. Deferred compensation is probably not relevant to any of the major quant firms, payment is almost entirely cash. If you're high enough up to start receiving stake in a prop firm directly as part of your bonus you are an order of magnitude above the TC cited by the original comment. Of course, the amount of comp you can get is a big reason people…

> Deferred compensation is probably not relevant to any of the major quant firms, payment is almost entirely cash. Deferred != stock. > If you're high enough up to start receiving stake in a prop firm directly as part of your bonus you are an order of magnitude above the TC cited by the original comment. Fair

Yes you could theoretically delay cash comp over a period of 3+ years like tech companies do with stock, but I've never heard of that happening.

I suppose by the technical definition the year end bonus cash is deferred comp, but I don't think 1 year is especially hard to plan around. People might stick out an extra few months because of it but it's not locking anyone in for years at a time. Plus even if you subtracted an entire year from the JS retention rates they are still quite good.

Regardless, the amounts cited by the original comment are only the base which isn't deferred by more than 2 weeks at a time, whatever your bonus potential is.

Re: How to Build an Exchange (2017)

#82

Post by KRAKRISMOTT »

Ntrails wrote: post #77
caddemon wrote: post #68

Earlier quoted context omitted.

Jane Street definitely does not have a non-compete. Citadel does though. Deferred compensation is probably not relevant to any of the major quant firms, payment is almost entirely cash. If you're high enough up to start receiving stake in a prop firm directly as part of your bonus you are an order of magnitude above the TC cited by the original comment. Of course, the amount of comp you can get is a big reason people…

> Deferred compensation is probably not relevant to any of the major quant firms, payment is almost entirely cash. Deferred != stock. > If you're high enough up to start receiving stake in a prop firm directly as part of your bonus you are an order of magnitude above the TC cited by the original comment. Fair

When they start letting you put your own cash in, you need cash to start with.

Re: How to Build an Exchange (2017)

#83

Post by delta_p_delta_x »

caddemon wrote: post #75
delta_p_delta_x wrote: post #53

Earlier quoted context omitted.

I'm quite salty about HFTs. I'm a final-year undergraduate with a bunch of close friends who all love C++ (yes, we're masochistic that way). They're all really smart, too (me, not so much—my GPA is 3.00/5). However, after a while, it got really dull and frankly, a bit exasperating when all the rest of them could discuss were HFTs, their ridiculous, outrageous salaries, matching engines, order books, and low-latency t…

Most people I've met that actually got jobs at top HFTs were quite curious about a lot of topics in school (and still are with extra time they have). I'm surprised your friends are so fixated on HFTs while there are so many interesting and/or fun other things to spend time on when undergrad on campus. A lot of HFTs have their own training programs anyway for the job specific knowledge, so it is more important to buil…

> I'm surprised your friends are so fixated on HFTs while there are so many interesting and/or fun other things to spend time on when undergrad on campus

Many of them were or are interested in other things like compilers, home-labbing; a couple of them game, too. It's just that because we're about to graduate, job offers dominate the conversation, and HFT jobs dominate that conversation.

Re: How to Build an Exchange (2017)

#84

Post by hansvm »

dasil003 wrote: post #43
DWqRdped wrote: post #28

Earlier quoted context omitted.

a high performer at citadel or JS can make 1m in 5 years. i don't know many people at google make that much.

Not many at Google receive that much in their offer letter, but with the stock appreciation over the last decade and stacked refresher grants, I'd be willing to wager there were thousands making >$1M as of Nov 2021 (many fewer since the stock has fallen though).

If Google is offering an initial total cash equivalents of $300k (say $140k salary, $480k/4 stock, 15% annual bonus on each), that's roughly the same deal as somebody else getting a base salary of $300k. The fact that a particular investment decision (GOOG) can accidentally push the individual's yearly increase in net worth past $1M isn't a good way to judge what Google is actually offering:

Anyone with a base salary of $300k can obtain a similar payoff structure by taking out a $550k loan to invest in GOOG, and taking out additional smaller loans at each stock refresh. The tax benefits from capital gains/losses and time-value-of-money benefits from getting your bonus sooner should handily outweigh the cost of servicing the loan, but even in a worst-case scenario where you pay interest for no benefit, that example Google offer would be a lot more comparable to a $315k-$330k salary, not a $1M+ salary.

Re: How to Build an Exchange (2017)

#85

Post by pclmulqdq »

hardwaregeek wrote: post #59

I've always been curious whether someone will succeed in using the same development strategy as Jane Street, namely using a non-C++ language as their primary language. I suspect OCaml may have been a very good choice back in the early 2000's simply because C++ was a much different language and there weren't many options for other languages. Building up an ecosystem was not a bad plan because most languages did not ha…

There is a little bit of survivorship bias here: in the 2000's, the two main languages of HFT were C++ and Java. By 2015, all the Java shops (and many of the C++ shops too) had failed. Lots of companies tried to do something other than C++, but most of them chose wrong.

Re: How to Build an Exchange (2017)

#86

Post by caddemon »

delta_p_delta_x wrote: post #83
caddemon wrote: post #75

Earlier quoted context omitted.

Most people I've met that actually got jobs at top HFTs were quite curious about a lot of topics in school (and still are with extra time they have). I'm surprised your friends are so fixated on HFTs while there are so many interesting and/or fun other things to spend time on when undergrad on campus. A lot of HFTs have their own training programs anyway for the job specific knowledge, so it is more important to buil…

> I'm surprised your friends are so fixated on HFTs while there are so many interesting and/or fun other things to spend time on when undergrad on campus Many of them were or are interested in other things like compilers, home-labbing; a couple of them game, too. It's just that because we're about to graduate, job offers dominate the conversation, and HFT jobs dominate that conversation.

Fair enough, the time around graduation can be pretty stressful for everyone!

Re: How to Build an Exchange (2017)

#87

Post by boring_twenties »

caddemon wrote: post #68
Ntrails wrote: post #65

Earlier quoted context omitted.

I would assume JS has industry standard levels of notice, non-compete and deferred comp - which will sure help keep people around

Jane Street definitely does not have a non-compete. Citadel does though. Deferred compensation is probably not relevant to any of the major quant firms, payment is almost entirely cash. If you're high enough up to start receiving stake in a prop firm directly as part of your bonus you are an order of magnitude above the TC cited by the original comment. Of course, the amount of comp you can get is a big reason people…

When I worked at a small prop shop, the cutoff was $400k TC, after which 50% would go into the fund for N years.

Currently I work at a large bank. My comp is all cash, but many of my colleagues get deferred stock compensation. Not sure what exactly the limit is but it's definitely much less than, say, $1m.

Re: How to Build an Exchange (2017)

#88

Post by vgatherps »

CoolGuySteve wrote: post #10
dcolkitt wrote: post #8

Earlier quoted context omitted.

Yeah, as an exchange FTX was pretty terrible. The matching engine was notorious for being high latency, unreliable, and having all sorts of undocumented issues. Every algo trader there will tell you horror stories about trying to cancel an open order, getting a cancel confirmation, then getting notified that the order was executed. Sometimes seconds later. What really gave FTX a competitive advantage was its cross-ma…

The main advantage of FTX's exchange was that it was far better than Binance's but that's barely saying anything. I'm not sure why crypto exchanges have such lousy technology. Lost acks, weird parser errors, missing order id fields, sessions giving no indication that the matching engine is down, etc. It seems like any conceivable way an exchange can break will be encountered after only a couple months of trading. It'…

There’s a graveyard full of “crypto exchange but built with good tech”, ftx even bought one iirc.

The market favors move fast, market to retail, etc etc over spending time cutting microseconds off the 99th%.

A lot of the exchanges also don’t have people who know what they’re doing. Lots of normal startup folks coming from an environment where “premature optimization is the root of all evil” and “move fast break things” is the norm.

Re: How to Build an Exchange (2017)

#89

Post by Ntrails »

caddemon wrote: post #81
Ntrails wrote: post #77

Earlier quoted context omitted.

> Deferred compensation is probably not relevant to any of the major quant firms, payment is almost entirely cash. Deferred != stock. > If you're high enough up to start receiving stake in a prop firm directly as part of your bonus you are an order of magnitude above the TC cited by the original comment. Fair

Yes you could theoretically delay cash comp over a period of 3+ years like tech companies do with stock, but I've never heard of that happening. I suppose by the technical definition the year end bonus cash is deferred comp, but I don't think 1 year is especially hard to plan around. People might stick out an extra few months because of it but it's not locking anyone in for years at a time. Plus even if you subtracte…

> I've never heard of that happening.

I have heard of it enough that I assume it is industry standard (much like the non compete).

Admittedly I am more familiar with the quant side than pure dev

Re: How to Build an Exchange (2017)

#90

Post by _dain_ »

caddemon wrote: post #75
delta_p_delta_x wrote: post #53

Earlier quoted context omitted.

I'm quite salty about HFTs. I'm a final-year undergraduate with a bunch of close friends who all love C++ (yes, we're masochistic that way). They're all really smart, too (me, not so much—my GPA is 3.00/5). However, after a while, it got really dull and frankly, a bit exasperating when all the rest of them could discuss were HFTs, their ridiculous, outrageous salaries, matching engines, order books, and low-latency t…

Most people I've met that actually got jobs at top HFTs were quite curious about a lot of topics in school (and still are with extra time they have). I'm surprised your friends are so fixated on HFTs while there are so many interesting and/or fun other things to spend time on when undergrad on campus. A lot of HFTs have their own training programs anyway for the job specific knowledge, so it is more important to buil…

>Most people I've met that actually got jobs at top HFTs were quite curious about a lot of topics in school (and still are with extra time they have).

yeah and that's the worst part, they take the brightest minds of the generation and have them working on moving money around instead of building fusion rockets

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