
Coders who trade: Wall Street designs its staff for the future - chollida1
https://www.bloomberg.com/professional/blog/coders-trade-wall-street-designs-staff-future/
======
chollida1
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 happen.

Somewhere around mid 2000's most quants started to be able to program pretty
well. Not necessarily with C++, though lots (especially former physics) could
use C++, but certainly with mat-lab, etc. This really shrunk the required
programmer head count,

This, coupled with the fact that few programmers were trained in fields like
stochastic calc, and the advent of offshoring meant that programming started
to be come a lower status job around this time.

Some relatively small fields like HFT kept good programmers in need, but these
jobs are relatively few and far between compared to the sell side bank jobs.

Now, programmers are much more valuable/respected once again, due to the
requirement for top notch software, not even as a competitive advantage, but
just table stakes to compete in the markets.

And like most fields programming in finance has really started to specialize:

\- lockless programming, low level Linux, user mode network drivers, etc for
HFT

\- distributed systems, low latency messaging for quote dissemination in large
systems like what most sell side banks run.

\- real time risk limits, web UIs for helping to visualize and alert portfolio
risk

\- "production" modeling of quantitative models, for those that can span the
programming/math boundary

~~~
colordrops
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 finance and learn these types of
specializations on the job, or are they hired away from other industries lured
by big comp packages?

I guess it's just a case of lack of empathy on my part. I just can't
understand why anyone would want to put so much effort and skill into making
bots for farming money for a bunch of questionable people.

I don't feel too guilty for saying this. Every time a story about bitcoin is
posted to HN, people go off topic and start complaining about everything that
is wrong with bitcoin. I don't see the same when we talk about finance in
general, even though similar sentiments apply, maybe more so.

~~~
log_base_login
I think it helps to understand that the financial sector provides capital that
serves to energize virtually every other sector in every industry.

Without finance, there is no biomedical research (private especially). Without
finance, there is no aerospace advancement. Without finance, there is no
alternative energy. Being able to facilitate a more liquid, more transparent
financial sector is, in my opinion, a calling worthy of any programmer who
seeks to make the world a better place.

Your assignment of people as 'questionable' is likely an artifact of the 2007
recession, and that kind of thing is a personal choice. I can guarantee you
that there are 'questionable' people in every sector and in virtually every
company. Sometimes people are great, and sometimes they aren't. Their field of
employment has very little to do with what makes them that way, and I think
that it's a little ignorant to be so casual (and I say this because you are
certainly not alone in your judgment) with how you view people.

Remember how, as children, we are taught to not judge books by their covers?
Why do the same with a programmer who works in finance? Sure, some of the work
may be a little pedantic, like squeezing an extra millisecond out of an
algorithm, but hey, that's computer science in general, and I liken that to an
F1 racing team spending hour upon hour sculpting the perfect frame for their
car.

Sorry for the rant, I've spent a decent amount of time working on financial
algorithms, and what you said touched a nerve.

Have a great day!

~~~
carterschonwald
WELL said! :)

I stumbled into finance a few years ago and I’ve had overall the best bosses
and work env ofanyone I know. I’m also doing a more audacious program of
research engineering/ computer science than I could likely do anywhere else.

I like to sometimes describe my work as some combination of “making the
systems that fund aerospace at least as reliable as commercial aircraft”, as
transparent as intergalactic vacuum, and easy to use to boot! Or at least
that’s the idea :)

On the hft front I recently started at poking at how to get accurate time on a
dev computer, which gets fiddly the moment you want really interesting
accuracy on commodity hardware :)

~~~
log_base_login
Thanks for the praise, and for the insight per your experience. Sounds like a
great gig!

I looked you up, and see that you are likely working exclusively in Haskell,
but thought you might derive some value from Carl Cook's presentation on
optimizing HFT code at the most recent cpp convention. I recognize the
languages are distinctly different, but he provides some interesting
theoretical points along the way that might be advantageous to you.

Here's a link:
[https://www.youtube.com/watch?v=NH1Tta7purM&feature=youtu.be](https://www.youtube.com/watch?v=NH1Tta7purM&feature=youtu.be)

Also, I can sympathize with your plight to run scalable sims. I've done some
work in bioinformatics, and am building a small cluster at home so that I can
learn to write code that'll scale to more massively parallel systems that are
de rigueur in that domain.

Cheers!

~~~
carterschonwald
I’ll have a gander! Thx for the link. I do code in other stuff when it makes
sense ;)

Yeah building stuff that works easily in the small and sanely in the large is
a fun challenge. Also hard.

Possibly because of your original comment, or perhaps unrelatedly, I’ve been
lately saying “finance done right is the lock free wait free scheduling
algorithm for moving society’s resources around” —— all the other stuff folks
think of as finance is really just icing and fancy wrapping on top of that
core truth

------
rb808
> Eighteen are now enrolled in the program, including Korn.

GS has 34k employees. Thousands of traders and probably >10k in IT. 18 people
isn't really a revolution. Devs still are second class citizens in banks - the
highest earning ones switched to become traders and just do some python/R/VBA
on the desk. There are a few hedge funds (Millennium, Two Sigma) where devs
are nearly treated as well as traders - would be interested to hear of any
place else.

~~~
dsacco
_> There are a few hedge funds (Millennium, Two Sigma) where devs are nearly
treated as well as traders - would be interested to hear of any place else._

Software engineers are treated very well, if not as well as research
scientists, at essentially any large or successful quantitative hedge fund.
This includes firms like DRW, Optiver, Tower Research, Two Sigma, RenTec,
Citadel, etc.

------
dogruck
This is a native recruitment piece for Goldman and other banks. It was
probably orchestrated between GS and BBG.

That said, I think it’s genuine. Computer Scientists who work on Wall Street
should not view their role as simply “a person who can write code.”

Lastly, this is from October.

~~~
vostok
Not only is it a native recruitment piece, but it's telling that they didn't
talk about total compensation.

~~~
lordnacho
I would think it's pretty good. I get recruiters calling me all the time, a
lot of them are quoting £150-200k total comp. That's for a guy with over a
decade's experience in financial coding. By contrast on StackOverflow the
salaries that you can see tend to be much lower for the non-finance things.

~~~
vostok
It's not surprising that it's higher than the average job on stackoverlfow.
That's about what I would expect. I'm not saying it's horrible, but it's not
exactly higher than top paying tech companies.

~~~
lordnacho
Any idea what the tech firms pay in London? I don't have many data points for
them.

~~~
nvarsj
I'd say the typical for a senior engineer is around 70, ranging up to about
100 or so depending on expertise/company. Going to lead/architect you're
looking around 80-120 total comp (there's a huge range...). Finance will pay
much better like you said, 150-200, but the tech will be pretty bad. People
making over 150 out of finance are generally contracting or working for a US
company.

------
praulv
Counter view: I only work in the field because it's the only way in tech to
pay rent where I live. I actually hate it, it's of zero value to society and
frankly the trading/business side are real assholes under pressure

~~~
aaronchall
> 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 investments?

People earn, save, invest, borrow, and build their dreams. Finance makes it
possible.

I'm sure you just want to pay the rent, but finance is very competitive and if
your firm created no value for society, it would go out of business.

~~~
55555
> if your firm created no value for society, it would go out of business.

This is silly wishful thinking. There are plenty of businesses that are
sustainably built on screwing people over or simply extracting money from
them.

> What value are financial services?

I don't think he's talking about financial services like retail banking. I
think he's talking about HFT activities other than market making. Legal front-
running, etc.

~~~
closeparen
>screwing people over or simply extracting money from them.

People enter these transactions because there's _something_ in it for them,
even if you think it's too little.

~~~
thomastjeffery
So you are upset they didn't say "approaches no value" instead of "no value"?

~~~
closeparen
It’s literally incorrect that businesses can sustainably provide no value. It
may be the case that they can sustainably offer deals you wouldn’t take, but
how we get from there to the business being immoral, useless, or deserving of
a ban is more nebulous.

If people are systematically taking deals you wouldn’t, there might be a broad
societal problem (why is tht crappy situation anyone’s best option?) or an
information problem (why don’t they know better?) but the business offering
the deals is probably not a logical or useful target if you want to address
the larger problem.

~~~
thomastjeffery
> It’s literally incorrect that businesses can sustainably provide no value.

That depends entirely on the definition of "value".

If a business exists solely to move money/stock around, that action does not
create "value", in the sense that juggling oranges does not create "value".

Trading stocks is an effort to take advantage of the fluctuating relative
value each stock has, so that individuals can take home the "profit". Such
"profit" is not created, but sifted out of the economy. Is that 100%
worthless? No, but it's darn close.

------
naturalgradient
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?

~~~
throwaway129999
I'm in the range of 3-5 years out of undergrad, working at a quant firm. My
total gross comp for this year will be about 400-450k, majority of that is
bonus.

By quant firm I mean either a proprietary trading firm (no outside investors)
or a hedge fund (takes outside money), but not a bank.

I have a CS background but have self-studied in stats, and received mentorship
from people with strong math backgrounds.

Main advantages of quant shops (doesn't apply to banks) over working at
Google/FB/Netflix etc:

\- small company size, startup style working environment, but big corp pay (or
more)

\- more varied/interesting work, e.g. mix of distributed data processing, high
performance numerics, or performance optimization in latency sensitive code

\- compensation paid purely in cash, no stock options/RSUs

~~~
ng12
> compensation paid purely in cash, no stock options/RSUs

Hands down my favorite part of working in finance. Better salary, no bullshit.

~~~
otakucode
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 earned for the company, they can be had for a
song.

~~~
shostack
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.

------
dookahku
So how does a mid-level software engineer get into trading? I do paper trading
on my own for fun but I'd like to make it a career.

~~~
rb808
Depends on what you mean. If you're looking at tech trading of stocks from
home, quantopian is a great place to start. wallstreetoasis forums for a
traditional roles for juniors and people trying to get in.

And just remember its a shrinking area. There are lots of traditional traders
that have been laid off and are looking for work.

~~~
blobbers
Is quantopian a viable platform or are you just going to food for the bigger
fish in the pond?

------
blunte
Step back and consider the immense intellect and creativity being devoted to
just making money.

~~~
jabretti
Yes, but step back and consider the immense intellect and creativity being
devoted to getting laid, or speculating about what's going to happen on Game
of Thrones, or thinking up clever things you should have said half an hour
ago, or complaining about what's wrong with Star Wars these days.

Or arguing on the internet.

Just a teeny portion of our species' intellectual output winds up creating or
discovering anything of real value, but that's fine, we muddle through
nonetheless. The finance industry has its role to play in ensuring the lights
stay on and there's food in the supermarket.

~~~
blunte
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 industry" that we're talking about here is self-serving and in
most cases is having no positive relationship with the lights or the
supermarket.

The transportation industry, by comparison, has a profit motive but ultimately
turns human creativity and intellect into things that arguably make life
better for a large number of people.

~~~
hacker_9
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, and smarter people are going to make better
choices. It is why financial hubs, such as London or New York, have more
resources to play with and so can provide a higher quality of living.

~~~
dreamdu5t
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.

------
otakucode
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, once you mix in other systems
operating in the same area all bets are off. And once you have the majority of
trades being performed by automated or rules-based systems, you ought to
detect their parameters through assuming reasonable things about those systems
(processors which are limited to a certain number of operations, bounding the
latency on their response to change, limitations on the complexity of the
systems or rules being used due to needing to be comprehensible to human
analysis in its source form, etc) and looking for predictable patterns created
primarily by the interactions between those automated systems. Everything I
have read about automated trading systems (which of course is always very
light on details due to everything being extremely valuable and proprietary)
seems to indicate that most automated systems are designed as if they are
operating in an environment where the other traders are primarily humans. If
anyone has come across indication that they are treating the movements of the
market as the output of deterministic software systems rather than 'natural'
trading, I'd be appreciative of a link!

~~~
mrchicity
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...](https://mechanicalmarkets.wordpress.com/2015/04/30/market-data-
patterns-order-anticipation-and-an-example-trading-strategy/) \- 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.

------
j45
A datapoint for the argument that "technologists can learn business easier
than business folks can learn technology" camp.

------
jaymzcampbell
I wonder if this will see an ability to more easily switch into
fintech/banking as a developer working in various other industries. I worked
with GS via a mobile agency for a while and really respected the developers
and what they were doing from an engineering PoV. I had always viewed that
industry as essentially closed unless you got in straight after graduating.

Has anyone ever made the switch into an engineering role within a bank? Is it
hard to get past the lack of specific "financial" experience if you have X
years of software engineering behind you in general?

~~~
arenaninja
Not working on a fintech but FWIW I work on trading platforms for a well-known
investment bank. Getting in was not particularly difficult but even with some
experience you may need to network with someone on the inside to get your
resume in front of the right recruiter, simply submitting your resume via the
usual channels appears to be a crapshoot (though I had never applied here
because I wasn't aware they were in town)

My salary is quite average for the role/seniority level and AFAICT it's
resented by many developers who work here because many will trade their "in"
on their industry into more interesting fintech/banking work elsewhere
somewhere down the line for higher compensation.

Knowledge of financial transactions is definitely highly specialized and I
don't have nearly enough of it yet but it has started to sink in

~~~
cyberpunk
Would I be correct in guessing from your username that you work with
FrontArena? It seems in-house coustomisation of those kinds of systems isn’t
paid very well (although I know some murex guys who get paid quite a lot as
consultants).

What does the day to day look like working on these beasts? Are you in Europe?
Most of the developers I know working on these platforms seem to be quite
silod and not really involved with the programmer ‘scene’ as it were (all
using windows, no opinion on editors, never heard of hn, don’t care about this
weeks $shinynew etc which I know shouldn’t be any kind of grading scheme but
it always strikes me as a bit strange).

Would like to hear your opinions on it: are most people who end up working
here turned into these (generalisation warning, I know not all) unmotivated
souls by the sheer pain of working on this stuff or does it just attract
candidates who don’t really care that much about tech?

~~~
arenaninja
The username I have carried for some time since I used to play this bomberman
clone called Teslatron.

I am not in Europe but a large chunk of the team I'm working with is.
Divulging the name of the company is frowned upon, but it's one of the large
full-service investment banks

Day-to-day is a lot like other jobs but projects are better managed than I
have previously experienced resulting in less meetings for developers.
Development can be faster-paced as a direct result.

News of $shinynew is discussed daily by developers (e.g.: React's license,
React 16, Vue, etc.) but projects themselves tend to be more conservative as a
matter of company policy. I can say the average developer on my team is more
capable than the average developer at other companies I have worked with
previously. People who are unmotivated will be moved to projects nobody wants
(my observation)

Regarding editors, environments, tech events, HN, StackOverflow, etc.:
participation is likely there but self-identification is a huge no-no

TLDR: It's not all rainbows and there are institutional challenges, but the
tech side is not naive

------
dustingetz
Where are the engineering recruiting channels? Can't find anything except
corpspeak blah blah that isnt even meant to be read

------
antoniuschan99
Crypto is doing really well these last two years, it seems like that is the
startup equivalent to the investment banking/quant jobs. However with Crypto,
it does feel like the beginning of the dot com era. Dot Com == ICO

------
Mikeb85
Well it's a lot easier for a trader to learn enough programming to implement
specific algorithms than it is for a programmer to learn about financial
markets.

------
likelynew
Can someone give me any information on what skill set can one develop for a
quant job as a programmer, and what to know for the recruitment process.

------
guard0g
I'm coming back to NYC....

------
known
Is it a cost cutting exercise? Because GS is ruthless in cutting costs.

------
chx
There was an amazing article about one of the programmers responsible for
inventing CDS and I can't find it again :( it included such gems as putting
offal in a grinder and getting steak out of it, anyone remembers it?

