I want to chime in here because I took a job in this industry (high frequency trading in particular) right out of college.
I can't speak for the whole industry as I've only worked at one firm, but my experience has been generally positive:
1. The work environment is similar to the software companies I interned with. Nobody wears a suit, the hierarchy is relatively flat, free food/soda/etc.
2. The problems are really interesting. HFT is a competitive game and good (read: fast and reliable) technology is just as important as smart algorithms.
The only downside? It's difficult to leave. I've had coworkers that have been around a while say that people generally don't leave the industry voluntarily.
Why? Money. I'm not trying to be a braggart but I can say with a high degree of certainty that I will never make as much as a developer at a normal software shop as I do now, with the exception of launching or getting in at the very early stages of a successful startup.
Believe me, I get the whole "money isn't everything", "adding real social value is more rewarding" mindset, I do. The reality is though that it isn't easy to halve your salary based on a philosophical argument, however persuasive, especially when you're still working on cool problems.
I'm currently an undergrad making a custom major at my university in Computational Finance. Could I get in touch with you via HN to ask about your experience in the industry? Thanks.
Ah, typo in parent comment. I meant "via email". If you read this comment, I'd greatly appreciate an email at loganfrederick@gmail.com so you don't have to post your email publicly. Thanks again!
If you are a college student reading this and have the slightest inkling of entrepreneurial flare, please please please do not work for a financial company/wall street.
I can assure it will be nothing compared to what you are able to accomplish by starting your own company and building something you care about. In finance, you will be fighting against transparency for the sake of maintaining profits when you could be doing something way more important... And yes the problem solving is fun at first, but then you realize that you could be problem solving on something that matters to you. A few thousand dollars more doesn't matter, and if you figure in the cost of living in NYC you're probably making less.
That is my advice, take it or leave, but please, think about what you're doing.
On the other hand, working for one of these firms can be a huge motivator to start your own. Sometimes, it takes the experience of something you hate to teach you the value of something you love.
Definitely true. That being said, the advice of others in a similar situation can also help you realize that something is not at all what its made up to be.
>and if you figure in the cost of living in NYC you're probably making less.
This is hardly that simple. Lower cost of living means lower wages. That will be a wash with cost-of-living type products and services but not with, for lack of a better word, "international priced" items [1].
I don't understand why so many people in the self proclaimed capitalist hub of the world believe things like living in a lower cost of living area means you have more money.
[1] A closer word might be "luxury" items but it's hard to call something a luxury item that people of literally all classes have (e.g. an iPhone).
How about tens of thousands of dollars? How about hundreds? Millions? Tens of millions? Does that matter?
"In finance, you will be fighting against transparency for the sake of maintaining profits" - not sure what you mean by this, if you could please clarify
Tens of millions maybe to some, but honestly the percentage of people making that is low and it takes years and years to get up there.
Even then, waiting 15 years to make a million won't have the same affect on everyone. Have you read Tony Hsieh's book after he sold LinkExchange: he could either sit around for a year and collect his ~40 million just by showing up and not doing anything, or he could leave early, and take less. He left early and took the cut in pay. I'm sure he made the right choice.
Banks don't make a lot of money from equities, they make a lot of money from over the counter (OTC) markets. These don't trade on an exchange, they are traded via phone calls and bloomberg emails. Banks try to keep pricing information as close to the chest as they can so that they can keep a wide bid ask spread (meaning they buy low, and sell for higher, and not because of appreciation or financial performance). Banks make money by offering 2 way markets (like a book keeper would) so the less transparent they are with their pricing, they more likely they are to be able to increase the bid ask margin. They don't have to disclose prices, and the traders can mark the bonds at almost whatever price they see fit, even if the price they have is super stale. Not only that, no one really knows what some of these complicated securities are really worth. As someone who comes from a science background, I was shocked to learn that "research reports" are more like marketing/advertising and they are not allowed to publish a negative outlook.
In my opinion, it's a messed up system and I don't want younger hackers thinking its a cool thing to do.
This has been a well known phenomenon for quite a while. Even back in the 90s, when algorithmic trading picked up steam, wall st rushed to hire math Phds and now wall st wants algo geeks. It'll be really hard to woo hackers to work in the hierarchy driven wall st culture. Some hedge funds are opening offices around Berkeley and subscribing to the valley way of life.
--"I've had people in interviews ask me point-blank what the social value is that we're adding," Mr. Chau said.
This is a question that shouldn't be uncommon, and should be easy to answer. If people at these financial firms can't easily answer it (and don't say "we increase market liquidity by 1e-30%!"), it's no wonder new hires with lots of prospects would avoid them. Why not work at, say, Facebook, where you're taking part in changing the way people interact, and every single person your age is using your product every day.
If the most interesting thing you do in a day is increase the wealth of others for a tiny tiny fraction of it, that's a huge opportunity cost. You could be be spending 40-60 hours a week doing something you find much more rewarding, and still have high enough a wage to meet all your financial goals.
On the other hand, you could equally say that Facebook's business is finding a way to exploit people's personal data for profit. They are no better nor worse than any investment bank.
90% of web startups are "finding new ways for people to waste (their employer's) time so we can show them banner ads". Social good? Just sayin'.
Oh, I've already got a whole list of reasons that potential hires shouldn't go work for Facebook. :) But you also need to give a recruit positive reasons to come work for you.
What's wrong with making markets more efficient? It's the same as making code run faster, or making a user experience less painful in the sense it's improvement at the margins. Just because the value is less tangible doesn't mean it isn't real. At the end of the day, we could say that all programmers do is push bits over wires. How does this add social value?
There's certainly nothing wrong with it, but if it's the best answer you give to a programmer when trying to attract hires, it's not going to sound very good. It would be like Google trying to attract top marketing talent by saying that they push 400 petabytes of IO a day. Certainly cool, but that's not what a person who's good at marketing is going to be interested in.
The topic says it all though. It's true, Wall Street is on a hiring frenzy right now and they've started to realize how important good talent is.
It means they are going to have to start offering more to get the talent that typically dives off into silicon valley. NYC suits are also a hard sell to the t-shirt style of the west coast and that in itself may be a difficult obstacle.
Wall Street has always recognized how important good talent is. That's why they pay executives and fund managers so much. What's new is the realization they need good software talent.
I'd never work for a financial firm again. It's just too hard to get up in the morning so I can go into work and make columns of numbers a little bit different from yesterday. Boring as hell.
Yep. Financial firms pay good money for a good reason: they need to get some of the smartest people in the world and pay them to do really boring stuff.
Medicine, likewise, pays well for a good reason: they need to get some of the smartest people in the world and pay them to do repetitive and mostly-kinda-yeechy stuff.
Academia is where you get some of the smartest people in the world and let them do stuff they actually want to do. This is why it's the only smart-people profession that doesn't pay very well.
borring? really. if your doing middle/back office yeah but front office work is anything but borring. infact out of the 20 years of coding, nothing compares to finance in the interesting/dynamic environment category.
Eh... I don't know that that's necessarily true. Say what you will about financial firms, but it's not like they pay you to club baby seals while startups pay you to care for orphaned bunny rabbits and kittens. There are startups out there that are unethical along with financial firms who have completely legitimate business models that provide unquestionable value for society.
FWIW, I just turned down an internship at a Chicago HFT company to work for Google this summer. I found the interview process and working conditions to be pretty similar to the tech industry, actually. The clincher for me was that I think it's easier to go tech -> finance than the other way around.
I'm not so sure this is the case. Even though finance is usually an easier environment (e.g. the markets aren't open 24/7 so the apps usually don't have high availability) the people hiring there think that if you haven't worked in finance you can't work in finance.
I can't speak for the whole industry as I've only worked at one firm, but my experience has been generally positive:
1. The work environment is similar to the software companies I interned with. Nobody wears a suit, the hierarchy is relatively flat, free food/soda/etc.
2. The problems are really interesting. HFT is a competitive game and good (read: fast and reliable) technology is just as important as smart algorithms.
The only downside? It's difficult to leave. I've had coworkers that have been around a while say that people generally don't leave the industry voluntarily.
Why? Money. I'm not trying to be a braggart but I can say with a high degree of certainty that I will never make as much as a developer at a normal software shop as I do now, with the exception of launching or getting in at the very early stages of a successful startup.
Believe me, I get the whole "money isn't everything", "adding real social value is more rewarding" mindset, I do. The reality is though that it isn't easy to halve your salary based on a philosophical argument, however persuasive, especially when you're still working on cool problems.