Quant/HFT firms during downturns or recession
Since everyone and their mother is clamoring about a recession, and I will be most likely joining an HFT firm soon (got an offer but still interviewing with tech), I'm wondering about the next few years at these firms for a SWE. Interested in hearing from veterans of down/flat periods about changes in compensation and possible layoffs. #citadel #hft #recession #optiver #virtu #sig #finance
Quant firms profit off inefficiencies in the market. Markets are most volatile during recessions. Relatedly: quant firms had decelerating growth up until the pandemic (likely due to the rise of passive index investors), but thanks to the rise of retail traders making negative EV active trades, quant firms have been hitting record growth. Most firms are rapidly expanding to profit off the current market inefficiencies.
HFT firms make a killing when there’s volatility in the market., March 2020 was one of the best months ever for both my current firm and my previous one. At my old place we had a bunch of traders retire in 2010 because they made such a fortune in 2008 and 9, instead of being made redundant in a recession you get your bonus doubled.
Idk, nervous about what happens when retail traders don’t have money to throw in to stonk options
Lol plenty of institutional investors will get dumb real quick in a serious recession too.
I don’t work in quant/hft, but do know a lot about the tech industry. Typically SWE folks are always in demand at quant firms regardless of economic outlook. It’s usually folks on the business/strategy side that take a hit during rough times. This is mainly just because there’s not too much room for opportunity during recession times so typically hedge funds realize this slowing of growth ahead of time and act accordingly to cut down overhead and help their lines of business run more efficiently. Hope this helps!