High frequency trading – Should I work for a trading company?

Posted by Chris on March 4th, 2010 filed in Trading

So you’ve graduated a fine  university with a degree in math, economics, CS, or some other actually useful piece of paper showing you know (theoretically anyway) how to do something of use to society.  Congratulations!  At job fairs all over the country at the best schools, or perhaps the schools that company recruiters went to anyway, trading companies want to hand you the keys to a decent salary, possible ridiculous bonus, hot secretaries, and the best office digs money can buy.  Oh, and a couple billion dollar trading limit if that’s what you’re into.

Should you take it?

Do you like money?

Do you like money more than anything else in the world?

That’s the question you have to ask yourself.  You’ll make more than enough to live on.  You’ll probably get a bonus ranging from a couple months salary to the type of money your parents wouldn’t be comfortable thinking about.  The office will be wonderfully furnished, and the work will be interesting.  They’ll only hire the hottest HR women, the prettiest secretaries.  Free drinks, snacks, bar after hours, a car service, free insurance, paid breakfast lunch and dinner.  It’s a crazy world.

It’s also all you’ll have.

Traders – you’re in it for money.  That’s what you *do* after all.  Play along for a couple of years, save your bonuses, and start a restaurant.  Live a life of boring luxury if you want.  IT folks, you’re my people.  I don’t do it for the money – it’s sure as heck nice though.  You probably do it because it’s coolest work you’ll ever find.  You can use your beloved language (ahem, perl) because it’s what you’re the fastest and most productive in. The best, fastest, newest everything you can find.  But you’re working for the traders.  The traders make the company money, you are an expense.  Sure, they give lip service saying that you’re all equal, but you’re not, are you?  When they stay late so they can have more profits on their books it’s a measurable thing that shows up at the end of the year in their bonus.  When you stay late, it’s so you don’t get yelled at.  Uptime doesn’t measure to actual dollars.

Why you should say yes

  • It pays well!
  • There’s no place in the world like the financial industry.  The companies nearly literally do nothing but create money.  Salaries are good, bonuses are better.  I don’t know of anyplace in the world you can make as much.  Period.
  • Benefits
  • Benefits match salaries. 100% paid health, vision, dental, AD&D, life insurance policies.  Free food.  Paid transportation – public, light rail, parking passes.  Drinks and frequent outings and parties.  Snacks and gym memberships.
  • It’s interesting work
  • Figuring out low latency systems, writing programs that handle billions of dollars, tying systems made of dozens or hundreds of smaller programs together.  New algorithms, different languages, the flexibility to change things.  All make for time flying doing cool things.
  • Smart people
  • The smartest people money can buy!  They’re not hidden in a think tank or back room either – they’re right next to you making your brilliant ideas sound silly and trivial in comparison.  So many great people to learn from.  Steal their book lists, read their favorite websites, pick their brains.  Making you smarter makes the company money too, after all.
  • Office environment
  • Ever seen a trader’s station?  The only limiting factor in the number of screens they get is their peripheral vision.  Six 30″ lcd’s orientated vertically with 19″ monitors on top of that.  Tech people get the hand-me-downs, of course, but you still get rather good hardware usually.  Aeron chairs, anything ergonomic the office manager can find.  Shiny toys bought by vendors for the company.  Giant-screen TV’s everywhere.  Kitchen to hang out in.  Everything is beautiful and functional.
  • Cool toys
  • Brand new routers, switches, servers.  Fiber.  Network cards with their own operating system.  Fiber fabrics that use different frequencies of light to get more bandwidth.  GPS time servers.  At least gigabit everything.  Terabyte storage arrays.  Entire floors of a building designed around cooling.  Datacenters.  It’s really freaking cool.

Why you should say no

  • You’re admitting you’re a whore
  • There’s no nicer way to put this one.  You are saying that  you value money over anything else.  Health, morality, family.  You’re only in it for the money, and the company you work for doesn’t do anything but make money.
  • You will burn out
  • Ten hour days will get you fired for not showing up.  The pace is frantic, at the end of the day your brain melts.  Adrenaline from the awesome parts of the job doesn’t do it after a while.  Sleep is for poor people.
  • The work stops being interesting
  • Yes, you can spend another year working to make your system trade faster.  Just like last year.  There isn’t even a target to shoot for.  Just “faster”.
  • Smart, but narrowly focused people
  • The mighty Wolfram is famous for this.  “I’ll see you this weekend” “No, I’m watching the super bowl.”  “What’s a super bowl?”  The people around you (and you, by extension) focus so much on the ways to make the company more money that nothing else exists.  You have to be so good at what you do to stay ahead that that’s all you can focus on.
  • Work-life balance does not exist
  • See also You will burn out, above.  They buy you for the hefty fees you are making.  Wake up early to get in before market open, work, then study your job when you get home.  We were actually planning to put convertible couches into the conference rooms for sleeping.
  • Chaotic work environment
  • Ever been to a casino?  That’s a lot like the floor.  You don’t even have the token courtesy of cubicle walls to stop the ringing, talking, yelling, sheep noises, etc.  Add to that constant interruptions and a lot of work gets done.  Badly.
  • Paranoia
  • These companies are secretive, and for good reason.  Everything from hardware, to network paths, to what programming language is fodder for the enemy.  Trading is a zero-sum game, after all.

Is it worth it?

Hell yes.  Or maybe not.  Try it.  If it doesn’t go against your ethics, you don’t mind taking a few years off from productive life, and can keep yourself broad enough while making it in the world there, it’s an amazing experience.  And the money doesn’t hurt.

At least if you can handle the negatives.  And they’re real.  You’re supporting traders.  You can be the head of IT, the lead SysAdmin, the brilliant network engineer.  Whatever.  You’re a monkey who works for the lowest trader.  If the company talks about work-life balance, it’s because they’ve had trouble with people quitting recently and that’s what they mentioned.  If they don’t, it’s because they don’t believe in it.  That said, it’s amazing work.  It’s fast work.  It’s educating work.  It’s inspiring and depressing.  If you can disassociate yourself from what you do, and be awesome at doing it, it’s really really worth it.  Personally?  I have no problems admitting I do what I do for money if the job is interesting enough that I’d do it anyway.  Give more to charity if it bothers you.  If you can’t handle time time, though, you’re not going to do well.  All I can do is try to present it so you can make an educated choice.


2 Responses to “High frequency trading – Should I work for a trading company?”

  1. shawn Says:

    Been in the business for 13 years. And yes, I am a whore. And oddly, still married to my first wife. ;0

  2. Anonymous Says:

    I’m in IT at a trading firm. It’s the toughest job I’ve ever had. They pay is good. Don’t be afraid to ask for 30-50% more than what you think you’re worth. I didn’t, It’s the only regret I have.

    Don’t expect your yearly review/bonus to be based on how well you do your job. What matters is everything you’ve done above and beyond your job. Just doing your job will lead to termination.

    Take the job, even if you end up not liking it, the experience will be well worth it.

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