How to become a quantum in an HFT company

Original author: Michael Halls-Moore
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I often receive letters from people wishing to get a job at HFT firms (HFT or High-Frequency Trading). They sometimes have problems with the application process, as well as with understanding the necessary technical skills for a particular position. I wrote this article in order to explain what high-frequency trading is, what skills are needed to be hired, and who should I contact in search of a job.

Keep in mind that HFT is a purely technical field. It attracts the most prominent candidates in the field of mathematics, physics, computer science and electrical engineering, most often during their postgraduate studies or after several years of work in any highly specialized field of industry. Despite its high pay, working in HFT-firms will require significant costs in terms of training and investment.

What is high frequency trading (HFT)


The term "HFT" includes a wide range of operations from algorithmic trading. In the context of this article, this means conducting a huge number of trading operations with the minimum possible delays. “Minimum delays” means the processing of data from feeds updating quotes and the closure of trading operations in less than a millisecond. In turn, delays in the most “advanced” HFT firms are less than microseconds. A further decrease in this value directly depends on the appearance of more productive specialized hardware.

High-frequency trading is a fairly closed area. It is very difficult to find information on how HFT firms work. However, some information can still be obtained from the list of open vacancies, advertisements and individual Internet articles. Ultra-high-frequency trading (Ultra-HFT, UHFT) is also very different from other forms of algorithmic trading. It is built solely on technical solutions and a huge number of calculations. After the start of trading according to a certain algorithm, almost no adjustments are made to its work (as long as it remains profitable), which is very different from low-frequency systematic trading, in the process of which people often make their adjustments.

Working in such an environment is highly competitive and can often break people. Many months of research overnight become irrelevant if the exchange working scheme changes, a new legislative framework appears, or if competitors can start processing data at higher speeds. Therefore, such work is suitable for well-disciplined people with higher technical education, able to work “under pressure”, people who value independence and a highly professional team.

Entrepreneurial mindset


Most high-frequency trading companies are small. Their modest staff usually numbers about 20-25 people. This is due to the fact that employees of such firms follow a well-defined entrepreneurial culture and a meritocratic outlook on life. At the interview, you, as a candidate, will be asked what innovations you can bring to the organization.

Given the fact that the bonus fund is shared by all (although it is distributed taking into account the different “weights” of an employee), you will need to demonstrate the ability to generate income that (explicitly or implicitly) exceeds your salary and bonus. Otherwise, you simply do not make sense to hire. That is, in order to even begin to consider you as a candidate for a position, you need to show skills that no one else has in the organization.

On the other hand, there is a chance to create a place "for yourself." People in the company may not search for new employees at all, but if they realize that you have rich experience in a certain field, they can open a vacancy for you. The meritocratic approach in HFT firms usually allows sufficient autonomy in projects. Therefore, if you want to work in an initiative environment side by side with extremely smart and talented people, then probably HFT will suit you.

Working hours in this area are above average. 60-70 hours a week is not uncommon, especially when the project deadline is close. However, intense intellectual work and monetary compensation usually outweighs the workload. This lifestyle is not for everyone.

How to get into the environment of high-frequency trading


There are several ways in which you can get into this environment, but most of them require outstanding technical skills in one or more of the exact sciences: mathematics, physics, computer science, or electrical engineering. Usually people come to HFT firms after:

  • Postgraduate studies . Most HFT firms hire candidates after graduate school in a specific area relevant to the company's objectives. Such an approach is the simplest, since according to a doctoral dissertation, publications or the status of a university it is easier to determine the candidate's abilities. Therefore, if you really want to make a career in the field of HFT, research in the field of low latency systems for transmitting information can be a good help. There are also frequent cases of selection of distinguished students from the last courses of the most popular technical universities (MIT, Stanford, Cambridge, Imperial) with their subsequent training for a specific position.
  • Gaining experience in the high-tech industry . Experts in specific areas where minimal data transmission delays are required (for example, in telecommunications) are usually hired for their knowledge of the subject area. However, it is worth noting that, as a rule, for normal work in their field, in any case, they need an extensive technical base. Scientists working on projects related to high-performance computing (for example, in the CERN data center or other national laboratories with supercomputers) are in high demand due to their experience with Big Data.
  • Experience on the stock exchange . Demanded are those who know how the work of the exchange is organized “from the inside”. This is explained by the fact that such people are most likely to help in creating new algorithms that profitably use the information architecture of a particular exchange.

One of the most common misconceptions is a strong belief that to gain a place in the HFT sector, extensive knowledge of finance is required. Most HFT firms do not pay attention to the availability of knowledge in the field of finance, given the sufficient level of technical competence of the candidate in other areas necessary for the organization.

General skills


Job responsibilities at HFT firms are very diverse. Almost every employee is forced to have a higher technical education and the ability to conduct independent research in this area (i.e., he must have a good knowledge of theoretical material). Since HFT is essentially a "technology sport", most should also have knowledge in computer engineering, electrical engineering, or experience working with low latency data transmission in other areas, such as telecommunications.

There is also now a demand for knowledge and experience with a certain type of software, such as graphic subsystems (GPUs) and user-programmable gate arrays (FPGAs)

By and large, any subject area that can somehow reduce delays in bidding or increase the speed of algorithmic calculations will find its place in the HFT. Examples of such areas are:

  • Schemes of the work of stock exchanges . Among those engaged in high-frequency trading, the basis of skills is extensive knowledge in organizing the work of stock exchanges. Knowing how the application book works, as well as all the intricacies of technology on a particular exchange, can play into your hands.
  • Processor architecture . High-frequency trading involves a significant number of operations in a relatively short period of time. Keep in mind that increasing the speed of these operations in any way will do you a plus. It is useful to have knowledge of processor architectures and hardware, especially systems other than x86 architecture (such as GPUs and FPGAs).
  • Networks with minimal delays in transmitting information . One of the main sources of data transmission delays in trading is the network stack. HFT firms value experience in optimizing packet processing, writing custom network modules, and using the Infiniband high-speed switched serial bus.
  • Understanding the laws . Knowledge of such legal acts as the “Regulation of the National Bank System” (Regulation NMS) of the United States of America and the EU Directive “On Financial Instrument Markets” is necessary in HFT operations.
  • Kernel optimization . The main task during optimization is to reduce delays and increase the speed of operations. Therefore, today there are frequent cases of rewriting the core of the software to speed up the process. Many HFT firms value their experience in modifying the Linux kernel.
  • Online algorithms . Speaking of delays in performing operations, I did not go into the details of the HFT algorithms. Often, these algorithms include "repeating" operations with arithmetic mean, error, and linear regression. Therefore, the analysis of the results of previous calculations in time is very important.
  • Programming languages . Despite the fact that most UHFT companies switched to specialized hardware (for direct processing of information and network exchange), in cases less dependent on delays, trading companies can use multithreading of C, C ++ and Java languages ​​(with a special garbage collector). Some trading firms value their experience working with such languages ​​and parallel computing.

As you can see, these skills are often technical in nature and require an academic degree or several years of work with certain technologies on an industrial scale. If you have experience with the above things, then you have a chance to prove yourself in an interview with an HFT firm.

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Work searches


As with most financial positions, it’s worth looking for a job through employment agencies. The largest HFT firms are located mainly in New York and London. Chicago also has a large number of organizations involved in high-frequency trading. Recruiters are usually knowledgeable in the subject area and are able to answer whether your experience is suitable for the requirements of the position. Note that the bar is very high! Most likely, you will have to make every effort to find a job, which can take a lot of your time.

Despite the fact that you can apply directly to the company, the most difficult is the process of finding companies engaged in high-frequency trading. Usually, if you are popular in your highly specialized field, the organization will try to hire you on its own. This can play into your hands if you really want to work in this company, publish your research, participate in conferences and just seriously improve your track record.

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