How does HFT comp work?

Albertsons rvUd721
Apr 25 22 Comments

I've always wondered how these high HFT comp numbers work, like people making $1m out of school.

How many people are in HFT, how many make that, and what is the highest you've heard of? Is it based on some sort of profit sharing and what is a typical percentage?

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TOP 22 Comments
  • Citadel lda
    300K+ out of school. You either do well enough to see your TC grow > 10% per year or be fired.
    Apr 25 5
    • Albertsons rvUd721
      OP
      How many years can you stay in before it levels out as an IC?
      Apr 25
    • Susquehanna International / Eng Kristaps11
      What’s tech debt like in Citadel? Generally okay across the board? What’s the variance like given your size?
      Apr 25
    • Albertsons rvUd721
      OP
      I would imagine there isnt any tech equity so debt wouldn't be an issue
      Apr 25
    • Two Sigma / Eng kysk
      Is Citadel as much of a sweat shop as people say?
      Apr 25
    • Albertsons rvUd721
      OP
      The point of HFT is simple fast code. If it requires lots of work then it's just being way overcomplicated by something.
      Apr 25
  • Oracle jceg8
    HFT as in high frequency trading? Its pretty much a hedge fund but with algo instead of people. Nobody makes 1 mil in hft out of school just like how nobody runs a hedge fund right out of school. The only fund that comes close to the kind of TC that you’re talking about is medallion fund by Jim Simon but no one knows anything about it.
    Apr 25 2
    • Albertsons rvUd721
      OP
      Are quants better paid? How high do they go?
      Apr 25
    • Quora eNHU01
      HFT firms often run market making businesses, so very different from hedge funds.

      Some companies like Citadel run both, but the market making part and the hedge fund part are legally required to be separated from each other.
      Apr 25
  • New NcEf26
    Had two offers at hedge funds, one fresh out of school was 150k base, 25k sign on, 25-75k first year bonus.

    Got another offer two years of experience at 150 an hour with the expectation of working 50-60 hours a week. Expected yearly comp of the contract was 350k-400k. Long hours. Was told sky was the limit for compensation, but in all reality I would make 650k all in when hired in as an employee. This place offered high payed contracts til you proved yourself. Extremely hard to get a full time offer

    Interesting thing was I was really inexperienced, had literally two years experience. Most tech employees were veterans from two sigma, de Shaw, and tower research. They mostly hired through their network, never hired anyone full time who couldn’t be personally vouched for by staff
    Apr 25 3
    • Albertsons rvUd721
      OP
      For some reason I was under the impression there was conditional pay. You describe it like a guaranteed bonus.
      Apr 25
    • Two Sigma / Eng kysk
      Which place?
      Apr 25
    • Albertsons rvUd721
      OP
      Don't remember, I don't know. Was probably thinking of quants.
      Apr 25
  • Oracle edsav
    Who makes 1m$ out of school?
    Apr 25 0
  • Susquehanna International / Eng Kristaps11
    No one makes $1m out of school.

    Highest I’ve seen have been Jane Street / Hudson River Trading / Citadel / Jump, all around 250-325 including signing bonus. There are a few really small more secretive firms made up of high performing traders/devs who left other firms that may pay more but I haven’t seen any of them hire new grads.

    Firms usually have around 80-1500 employees.

    HFT is usually only one of many revenue streams of a trading firm. Different firms focus on different efforts.

    Depends on the firm, but usually traders are the ones making the real money. That said there also way fewer traders than devs and their job security and exit options are a lot shittier.

    If you want to learn more about trading refer to this blogpost:

    https://blog.headlandstech.com/2017/08/03/quantitative-trading-summary/
    Apr 25 5
    • Albertsons rvUd721
      OP
      Does pay go up a ton with experience? Does the winner of the international math Olympiad get offers for $10 million a year at a quant job?
      Apr 25
    • Susquehanna International / Eng Kristaps11
      Depends on the firm. Some firms reward uhh.. entrepreneurship I guess you can call it more than others.

      Being an IOI medalist will help you get a quant job but nothing will guarantee high pay like high performance. And trading is kinda funny / cool in that the smartest person isn’t always going to be the best performer .

      Also I may be wrong about this because I don’t have a good idea of what quants really get paid across the industry or what their noncompetes look like but I think on average the best traders make more than the best quants. But again depends on the firm. Someone who knows better please chime in.
      Apr 25
    • Albertsons rvUd721
      OP
      When people say buy side, does that include traders? Are all traders buy side, or what does buy side include besides private investors?
      Apr 25
    • Microsoft Not_at_MS
      Kristaps11, much of what you’ve said about traders vs devs is true at places like Jane Street and SIG but not really applicable to Citadel, HRT, Jump, and other more automated places where human traders aren’t really the core of the business. AFAIK HFT-focused firms generally pay both their researchers/quants and devs equally well, although quant compensation can be more variable.

      rvUd721, no, not all traders are buy side. For example, sales traders working for bulge bracket banks would be considered “sell side” rather than “buy side”.

      Based on the people I know in the industry, HFT comp can be anywhere from 250-300k (very low end / grad) to 500k-700k (a reasonable starting point for someone with 2-4 years of experience) to 1.5+ million (high end). Also, no one really cares about experience. It’s about results.
      May 4
    • Susquehanna International / Eng Kristaps11
      Like I said, depends on the firm. Places like HRT, Jump, and Tower are the exception not the rule. As competition gets tougher firms are trying to diversify revenue streams.

      Also I’m pretty sure traders on average make more than devs at Citadel. Anyone from Citadel please correct me if this isn’t true.
      May 5
  • 1000%, dude saved the company
    Apr 25 0
  • New NcEf26
    Some places do guarantee a bonus
    Apr 25 0

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