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Slashdot: High-Frequency Programmers Revolt Over Pay
Slashdot: High-Frequency Programmers Revolt Over Pay
shodson
OC, California, USA
Quantoholic
Experience: Advanced
Platform: IB/TWS, NinjaTrader, ToS
Broker: IB, ToS, Kinetick
Trading: stocks, options, futures, VIX
Posts: 1,976 since Jun 2009
Thanks Given: 533
Thanks Received: 3,709
I think it's much more than just an office and an internet connection. You have to have a very low latency network with some of the fastest servers (like flash-buffered NICs running on a PCI-E slots) and network gear (multi-redundant 100 GB Ethernet routers, switched and load-balancers), co-located on or near exchanges and also have intermarket connections set up as well. I can imagine that these exchanges do not run on IP networks open to the public internet, rather, you have to have special business relationships with the various exchanges to play on their networks and it probably requires a large amount of capital, insurance and compliance with other regulatory requirements that are not readily available to a bunch of coders that just quit their day jobs. You probably even need a seat on the exchanges (could be $1M+ a seat) to play at this level.
I have a friend who developed HFT algo's for a local firm who pulls in 400K a year from the firm and three others who work there as higher ups, but all have quantitative mathematics degree's. Not an investment bank, all their profits go back into the company. Been up there a few times to talk with them but w/o a masters or PhD, I couldn't get in the door, even with my Series 7/66. They got a seat on the NYSE last year and were able to get their data servers in the same server room as the NYSE, so minimal latency. The days that the company makes more than $1M, the C-levels take the whole firm out for drinks.
There is definitely more to being a partner to a HFT programmer than just an ISP connection. It's takes big money, industry connections, and large outlays for reducing trading latency from milliseconds to microseconds.
