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10/19/08

I'm curious to hear how everyone would rank the top prop trading firms. I've focused the post on firms in Chicago because that is where most of them are. Here is how I've ranked them:

1.Spot Trading
2.Jump Trading
3.DRW Trading
4.Optiver
5.TransMarket Group
6.Peak6 Investments
7.Chicago Trading Company
8.Infinium Capital Management
9.Wolverine Trading
10.Tower Hill Trading

Honorable mention for firms outside of Chicago:

1.Jane Street Capital - NYC (considered to be the best)
2.Susquehanna International Group - Philadelphia (on par with CTC)
3.First New York Securities - NYC (on par with THT)

Feel free to change them around or offer any overall feedback or firm specific feedback.

Trader Joe's List with explanation further in the post.
1. Jane Street
2. DRW
3. SIG
4. Optiver
5. Spot
6. Transmarket
7. Wolverine
8. Peak6
9. Jump Trading
10. First New York

Comments (540)

10/13/14
NoiseTrader:

Hi,
I am a recent undergraduate working in an asset management firm. It has been my passion and dream to become a trader. I have interviewed with several of the top prop trading shop such as Jane Street, Optiver, Tibra and etc. I didn't have any trouble passing any of their screening tests or brain teasers, but for some reason, I am just can't seem to pass any of their final round, which is usually semi-technical conversations with their traders.
And now, I am starting to think there might to certain quality I am missing. Can anyone please advise me what are the qualifies top traders look for? This is really bothering and hurting my confidence. I actually felt some of those final rounds went pretty well as many of my answers resonated with the interviewers follow up, but I still came up short of an offer. Any advise? Thanks in advance!

It might be tough to get into a prop shop from an asset manager because they are very different cultures. You have gotten further than most guys do. Where are you located? What is your undergrad? Usually the engineer/math types get picked first in hard-core prop trading. Sure, there are plenty of fin/business types, but engineering or science backgrounds are more of a cultural fit, at least in Chicago.

http://www.jasonbondpicks.com
10/13/14

Hi,

I have interviewed with the following prop firms: Jane Street, Optiver, Goldenberg Hehmeyer, Knigth Capital, First New York Securities. So I can tell you what I know and think about them from experience.

Jane Street:

- no doubt very smart people
- pays well
- interview as mentioned in many forums is very probability and brain teasers based. I only did first round, but was asked simple mental arithmetic (no pen/paper) over the phone, after which asked about confidence level and how much I would bet that I got answers right. Probability question was you have 4 coins, flip them, what is probability you get at least 2 heads.
- they are registered as broker-dealers and have about 600 million in equity (you can check it out in their SEC filling)
- the founders come from Susquehanna
- a lot of the money they make comes from statistical arbitrage, whereby they try and profit from pricing inefficiencies in market. Example emerging market ETF trading in US while Asia market is closed. Or foreign stocks listed in OTC market in US (by the way they are one of the most active people in OTC pink sheets).
- as with many prop shops, a lot of their activity is linked to ETF, there is a correlation between the growth of these prop shops and the amount of assets in ETF (now at about 2 trillion) and the diversity of ETF...

Optiver

- pre interview consists of 3 mental arithmetic tests, 1st is about 80 questions, must do all sequentially, have 8 mins, pass mark is about 55, -2 for skipped or wrong answer, +1 for correct answer
- absolutely stupid test in my opinion
- they expect you to be robots
- in terms of their trading, they do High frequency, ETF related stuff, market making, options....
- they have not done well in 2009, 2010.
- they pay well though

Goldenberg Hehmeyer

- very small firm
- entrepreneurial
- nice offices
- well capitalised
- most come from Susquehanna, some from Citadel (turnover is extremely high at Citadel, so they can be found in many firms)
- ambition to become like Jane Street
- owned by Goldenberg Hehmeyer, who got his money from selling his futures brokering business
- test very probability based, brain teasers... but on paper
- quite nerdy

Knight capital

- main source of cash is ETG electronic trading group
- need to be good at coding
- they have smart people
- active mostly in equities in US (nasdaq particularly)
- trying to be known in europe

First New York Securities

- paid during training 60 k
- after training, might be paid during transition period
- given firm capital to manage, compensation based only of % of profits you generate
- about 50 % leave after training because found out they are not good at trading, did not like it, or lost money
- it seems that potential to make money is high but not have the feeling that few do and that most manage to just earn decent money but nothing amazing
- registered as a broker-dealer, have about 300 million, check out filling on SEC, FINRA.
- recruited some prop traders from Credit Suisse, B of America...
- want to profit from fact that banks are closing their prop desks
- aims to become a hedge fund, get more capital
- potential insider trading probe (could it impact the firm ?)
- uses different trading strategies, and traders have quite a bit of freedom.

CONCLUSION

- prop shops are either doing some sort of market making, ETF arbitrage or some sort of thing where you take small risks but try to profit from inefficiencies in market
- other strategy is let traders take directional bets (more rare I think)
- in any case, it seems that career prospects after leaving these firms can be very limited, correct me if I am wrong...

10/13/14

Thanks eydey, found your post pretty helpful.

10/13/14

Thanks for the awesome post eydey!

Does FNYS purely focus on taking directional positions using non-quantitative methods (risk arb, catalysts, technicals)?

I win here, I win there...

10/13/14

FNYS does a bit of everything in equities, fixed income, futures...

From all the prop firms, I think they do the most directional positions. Not a very quant place, which is good I think. They do a bit of systematic though.

Apparently they have had close to 20% return the past 5 years (there is an article somewhere on bloomberg saying so).

Sounds really exciting, but there are significant risks involved in joining them and half do not make it after training. Also it will be difficult to get a job after that.

10/13/14

Thanks a lot eydey,

I have a question about Goldenberg Hehmeyer though. How do you apply to them? I can't find their website.

Also, did you interview at any other prop firms?

Are traders at FNYS like global macro portfolio managers holding long term as well as short term positions across many different markets?

Is Jane Street more of a arbitrage and directional trading firm than a market making firm?

10/13/14

Goldenberg hehmeyer have no website, based in London. job adversited in my college.

interviewed only at prop firms mentioned.

FNYS does a bit of everything, not really sure about the nitty gritty details...

Jane Street is mostly stat arbitrage, market making, no directional

As i said, a lot of the quant prop shops are really active in niche markets, options market-making, ETF arbitrage, OTC pink sheets... how does it work in practical terms, don't really know to be honest... only way to find out is to join them...

10/13/14

Thanks for your response. I really appreciate it. And congratulations on making into FNYS and a commodity trading firm. I hope you make the best decision and have a happy life.

10/13/14

a little off topic, but no one seems to be able to give me many examples. What larger non financial companies could you work for and be a trader at? And example would be to work at Exxon and be an futures trader..thanks.

10/13/14
ewlang:

a little off topic, but no one seems to be able to give me many examples. What larger non financial companies could you work for and be a trader at? And example would be to work at Exxon and be an futures trader..thanks.

non financial place where you can work as trader, mostly commodity trading firms. They trade physical products but also derivatives.

- vitol
- glencore
- trafigura
- louis dreyfus
- cargill
- mercuria
- noble group
- koch trading
- bp trading
- exxon mobil
- shell trading
- eni trading
- total trading
- edf energy
- gunvor
- conocco trading
- phibro (owned by occidental petroleum)
- gazprom

i think i have listed some of the largest,there might be more...

10/13/14

Where does WTS rank among these?

10/13/14
Nebular:

Where does WTS rank among these?

by WTS, you mean World Trade Securities...

Just read about them now, they are based in Montreal.

Seems cool.

10/13/14

WTS no good

- just had a closer look and saw that they make you pay for training courses
- anything that asks you for your money= not good
- if they ask for money,means that they are not profitable
- generally though, joining a prop shop is risky, few will make it.
- in quant prop shops (eg. Jane Street, drw...) though very difficult to get into, you will at least have a base salary (good one) and bonus.

10/13/14

when you say quant shop you mean quantitative correct? Does that mean I would have to be a math genius to work at Jane Street or DRW?

10/13/14

ya by quant i mean quantitative

you will need to know maths, especially probability and stats VERY well to pass interview with these prop firms. Jane Street has probably one of the toughest interview process.

10/13/14

I hear the main prop shops mainly recruit HYP kids, but do any of these firms take kids from non-targets? Do you believe I will have more success with certain firms? Also do mostly all of the firms on the "list" produced offer internships?

10/13/14
ewlang:

I hear the main prop shops mainly recruit HYP kids, but do any of these firms take kids from non-targets? Do you believe I will have more success with certain firms? Also do mostly all of the firms on the "list" produced offer internships?

This is not really true. Not sure how it is in NYC, but most of the Chicago prop shops focus on local schools- even the top ones. Think CINNI (Chicago, IIT, NU, ND, Illinois) rather than HYP for CTC, Jump, and DRW.

10/13/14
IlliniProgrammer:
ewlang:

I hear the main prop shops mainly recruit HYP kids, but do any of these firms take kids from non-targets? Do you believe I will have more success with certain firms? Also do mostly all of the firms on the "list" produced offer internships?

This is not really true. Not sure how it is in NYC, but most of the Chicago prop shops focus on local schools- even the top ones. Think CINNI (Chicago, IIT, NU, ND, Illinois) rather than HYP for CTC, Jump, and DRW.

I think an engineering/science degree from any Big 10 school should land an interview.

10/13/14
10/13/14
eydey:

what is HYP?

Harvard, Yale, Princeton. Its how we abbreviate them in America. Sometimes HYPSM to include Stanford and MIT and in finance, W is included for Wharton (UPenn's business school).

10/13/14

- if you can somehow show that you are good at probability and stats, I think you can get their attention (eg.poker, chess competition, math olympiad... could be something else).
- many, will have target schools and will not hire anyone outside. but everything is possible.
- use linkedin, to get an idea of the background of people working at each firm

10/13/14
10/13/14

This is strange: wtsprop.com versus wtstrading.com

what's going on here?

10/13/14
Nebular:

This is strange: wtsprop.com versus wtstrading.com

what's going on here?

WTS prop is based in NY, while WTS trading is based in MTL. Seems odd.

I win here, I win there...

10/13/14
Bi-Winning:
Nebular:

This is strange: wtsprop.com versus wtstrading.com

what's going on here?

WTS prop is based in NY, while WTS trading is based in MTL. Seems odd.

They look identical also....

10/13/14

I know this is a dead thread, but thought it might be the best place to post this.

Anyone hear of SG Cap in Chicago?

10/13/14

The people below me are going to tell you to search =p

10/13/14
juked07:

The people below me are going to tell you to search =p

There have been similar, but not identical, posts such as http://www.wallstreetoasis.com/forums/best-proprie...trading-firms, but it is out of date and mostly restricted to Chicago. I am looking for the best firm(s) to have on one's resume.

10/13/14

You would need to be a lot more specific because some of the 'prestigious' firms don't have any presence in some markets. Getco isn't a significant player in energy derivatives.... but it is considered by many a 'prestigious' shop.

10/13/14
10/13/14

http://www.wallstreetoasis.com/forums/best-proprie...trading-firms-2010

The ranking given here by absinthe seems pretty accurate, though of course different people would give slightly different rankings.

10/13/14

My fav part "I am looking for the GSes" of prop trading. Blehh that alone makes me think you dont' get the concept of prop trading. Prop trading is all about dollars. The highest P&L and most knowledgeable people you want to learn from.

No one cares about anything else. P&L is all that matters and consistency.

10/13/14
marcellus_wallace:

My fav part "I am looking for the GSes" of prop trading. Blehh that alone makes me think you dont' get the concept of prop trading. Prop trading is all about dollars. The highest P&L and most knowledgeable people you want to learn from.

No one cares about anything else. P&L is all that matters and consistency.

You're right - I am a fucking idiot for posting this. Close the thread (not being sarcastic).

10/13/14

http://www.wallstreetoasis.com/forums/best-proprie...trading-firms-2010

The ranking given by absinthe on this thread seems reasonable to me, though obviously people will disagree about the details.

10/13/14

Getco is the GS of hft. Jane Street is the gs of nerdy dudes prop trading over longer periods based on all sorts of random shit

10/13/14

you can be at the GS of prop trading but suck as a trader and therefore not make GS make it rain money.

searchsearchsearch

10/13/14

Good lord. This thread already exists. But anyways, I'll entertain you and give my top 10 list.

1. Getco
2. Jane Street
3. Headlands Technologies (they're new but founded by ex-Citadel partners. No doubt that they will become an important player in the scene).
4. DRW
5. SIG
6. Jump
7. Hudson River
8. Tower Research
9. IMC
10. Tibra

10/13/14
10/13/14

no rentech? would squeeze that in, and Bridgewater. They have prop divisions, or are you not counting those?

Best Response
10/13/14

There may be some inaccuracies here, so feel free to point them out without quoting the list (so I can edit).

Up and coming firms:
Headlands, Teza Technologies, Five Rings Capital

Mainly algorithmic shops
1. Getco
2. Hudson River Trading
3. Jump Trading
4. Tower Research
5. Madison Tyler
6. Knight Capital Group
7. Allston Trading
8. Sun Trading
9. Flow Traders

Mainly derivs market making:
1. Jane Street
2. SIG
3. DRW (also does quite a bit of algorithmic trading)
4. IMC Financial
5. Tibra
6. Optiver
7. Wolverine Trading
8. Peak6
9. Spot Trading
10. Chicago Trading Company
11. Timber Hill
12. Transmarket
13. Group1

Other:
1. DC Energy (energy trading)
2. Louis Dreyfus (Commodities)
3. First New York Securities (many)
4. Consolidated Trading (Commodities)
5. Trillium (short term equity trading)

Honorable Mentions: Ronin, Cheiron Trading, Gelber Group, Aardvark Trading, Geneva Trading, Eldorado Trading, Archelon, Marquette, Belvedere

10/13/14
absinthe:

There may be some inaccuracies here, so feel free to point them out without quoting the list (so I can edit).

Up and coming firms:
Headlands, Teza Technologies, Five Rings Capital

Mainly algorithmic shops
1. Getco
2. Hudson River Trading
3. Jump Trading
4. Tower Research
5. Madison Tyler
6. Knight Capital Group
7. Allston Trading
8. Sun Trading
9. Flow Traders

if u r not only talking about independent prop shops, Citadel's HF desk does very well, even better than Getco/Jump from some perspectives. i cannot agree with you on Allson and Sun, both of them have their problems. Especially Sun Trading, it just had a massive layoff and shank their business a lot in Feb.

10/13/14
lingua_franca:
absinthe:

There may be some inaccuracies here, so feel free to point them out without quoting the list (so I can edit).

Up and coming firms:
Headlands, Teza Technologies, Five Rings Capital

Mainly algorithmic shops
1. Getco
2. Hudson River Trading
3. Jump Trading
4. Tower Research
5. Madison Tyler
6. Knight Capital Group
7. Allston Trading
8. Sun Trading
9. Flow Traders

if u r not only talking about independent prop shops, Citadel's HF desk does very well, even better than Getco/Jump from some perspectives. i cannot agree with you on Allson and Sun, both of them have their problems. Especially Sun Trading, it just had a massive layoff and shank their business a lot in Feb.

1) Already said earlier that this was only independent prop shops, not including divisions of HFs like RenTech, Bridgewater, Citadel

2) Sun and Allston are not ranked very highly.

3) You are a d-bag for quoting the list when my first sentence asks you not too...now I can't edit it anymore.

10/13/14
absinthe][quote=lingua_franca:
absinthe:

There may be some inaccuracies here, so feel free to point them out without quoting the list (so I can edit).

Up and coming firms:
Headlands, Teza Technologies, Five Rings Capital

Mainly algorithmic shops
1. Getco
2. Hudson River Trading
3. Jump Trading
4. Tower Research
5. Madison Tyler
6. Knight Capital Group
7. Allston Trading
8. Sun Trading
9. Flow Traders

double quote, bite me sucker

10/13/14
lingua_franca][quote=absinthe:
lingua_franca:
absinthe:

There may be some inaccuracies here, so feel free to point them out without quoting the list (so I can edit).

Up and coming firms:
Headlands, Teza Technologies, Five Rings Capital

Mainly algorithmic shops
1. Getco
2. Hudson River Trading
3. Jump Trading
4. Tower Research
5. Madison Tyler
6. Knight Capital Group
7. Allston Trading
8. Sun Trading
9. Flow Traders

double quote, bite me sucker

bite me sucker? Who are you Dick Tracy?

If I had asked people what they wanted, they would have said faster horses - Henry Ford

10/13/14

absinthe:
There may be some inaccuracies here, so feel free to point them out without quoting the list (so I can edit).

Up and coming firms:
Headlands, Teza Technologies, Five Rings Capital

Mainly algorithmic shops
1. Getco
2. Hudson River Trading
3. Jump Trading
4. Tower Research
5. Madison Tyler
6. Knight Capital Group
7. Allston Trading
8. Sun Trading
9. Flow Traders

Mainly derivs market making:
1. Jane Street
2. SIG
3. DRW (also does quite a bit of algorithmic trading)
4. IMC Financial
5. Tibra
6. Optiver
7. Wolverine Trading
8. Peak6
9. Spot Trading
10. Chicago Trading Company
11. Timber Hill
12. Transmarket
13. Group1

Other:
1. DC Energy (energy trading)
2. Louis Dreyfus (Commodities)
3. First New York Securities (many)
4. Consolidated Trading (Commodities)
5. Trillium (short term equity trading)

Honorable Mentions: Ronin, Cheiron Trading, Gelber Group, Aardvark Trading, Geneva Trading, Eldorado Trading, Archelon, Marquette, Belvedere

This is EXCELLENT. I think teza is actually on the cutting edge and doing some very interesting stuff. Same with headlands.

Obviously with Getco's decline and knght's demise the algo rankings would probably need to get revised. From what i've heard, jump is doing better than Getco lately.

10/13/14

The next logical step is to make this thread quarterly. Perhaps a weekly or even daily ranking would make more sense.

10/13/14

Brilliant. Especially given how often these prop shops publish trading results.

10/13/14
shorttheworld:

Cmon cocksuckers

no homo plz

make a new list and prestigewhore

space bar plz

and rank things in your little minds when you wont even be able to trade once you get there bwahaha.

1) Datek. END LIST.

10/13/14

Any one ever trade at MBF Clearing Corp? ( Mark Fisher's firm)

10/13/14
10/13/14

as silly as this whole thing is, i would make some changes to absinthe's list. knight is very good, at the level of Getco and hrt, not down with madison tyler. also, sun should not even be on the list - they just fired an enormous number of people recently and have been doing very badly, so allston should be above them.

10/13/14
anontrader:

as silly as this whole thing is, i would make some changes to absinthe's list. knight is very good, at the level of Getco and hrt, not down with madison tyler. also, sun should not even be on the list - they just fired an enormous number of people recently and have been doing very badly, so allston should be above them.

I made a few adjustments but I don't believe that Knight is on the level of Getco or HRT. The talent the aforementioned shops hire is quite spectacular, as is the compensation. Everybody seems to claim they are as good as Getco.

As for adding RenTech, that's just not fair. Medallion is what, $5 billion with ~63% returns since 1989 (35% after 5% and 36% of the profits). Yeah, it's technically only the firm's capital but adding prop arms of hedge funds seems messy.

10/13/14
absinthe:
anontrader:

as silly as this whole thing is, i would make some changes to absinthe's list. knight is very good, at the level of Getco and hrt, not down with madison tyler. also, sun should not even be on the list - they just fired an enormous number of people recently and have been doing very badly, so allston should be above them.

I made a few adjustments but I don't believe that Knight is on the level of Getco or HRT. The talent the aforementioned shops hire is quite spectacular, as is the compensation. Everybody seems to claim they are as good as Getco.

As for adding RenTech, that's just not fair. Medallion is what, $5 billion with ~63% returns since 1989 (35% after 5% and 36% of the profits). Yeah, it's technically only the firm's capital but adding prop arms of hedge funds seems messy.

I agree that adding Rentech is just confusing. But I disagree about Knight. Check their website's career section:

"The Electronic Trading Group (ETG) at Knight is comprised of an elite group of high-caliber and experienced members, including former academics from the best research universities in the world. Currently, almost all of the people who make up ETG have post-graduate degrees - with Masters and Ph.D.s from schools such as MIT, University of Chicago, Stanford University and Ivy League institutions.

Prior to working at Knight, our employees have worked on research topics ranging from information theory and nonlinear control theory to computation fluid dynamics and abstract algebra. Key members of the Electronic Trading Group also include highly skilled quantitative strategists and programmers. We work in many languages, from high-level modeling languages such as R and MATLAB to middle-level languages like C++.

We have a diverse team. Our members include a music producer who has produced yoga music for children, a former professional golfer who competed against current PGA players, a semi-professional table tennis player, a winner in Top Coder 2001, and three gold medalists at the International Mathematical Olympiad."

This group is at the level of Getco or HRT. Knight is the highest volume trader in US equities. (for the record, I don't work for or have any relationship to them, but I think they are underrated/not mentioned often on these forums)

10/13/14

it wont matter all you traders are going to hell for gambling

hope those dollars are worth it!

10/13/14

woah happy, chill, you don't want to be messing with a prospective Hedge Fund analyst, do you!?

And I like it when people do these "top" lists, usually results in my getting more information about different firms when people start arguing/defending their choices.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

10/13/14
D M:

more information

"Information"? haha. Sorry, but you are a noob. You're not getting information, you're getting undocumented third-hand gossip and conjecture from people who "swear they know people". This website is the anus of internet.

Take anontrader, for instance. Huge troll! If you believe anything he says you are a dumbass. How does a perfectly manicured, airbrushed advertising blurb in any way tell you how good a firm is??? Give me a pound of makeup and I can make any ugly person look like a perfect 10.

Getco's website is modest. It has almost nothing on it, because it doesn't feel the need to brag about itself or how many yoga musician golfing pros it has. Think about that for a second. The guy who drives the biggest, flashiest SUV invariably has the smallest penis. If your HFT firm really has to try that hard on the PR blurb, and if it has to stoop down to the level of shameless self-promotion through anonymous accounts on WSO, then maybe it has something to compensate for.

10/13/14
7toaster:

Getco's website is modest. It has almost nothing on it, because it doesn't feel the need to brag about itself or how many yoga musician golfing pros it has. Think about that for a second. The guy who drives the biggest, flashiest SUV invariably has the smallest penis. If your HFT firm really has to try that hard on the PR blurb, and if it has to stoop down to the level of shameless self-promotion through anonymous accounts on WSO, then maybe it has something to compensate for.

holy shit that is so true. yeah i would never work for knight after reading that description posted anywhere how embarrassing

10/13/14
7toaster:
D M:

more information

"Information"? haha. Sorry, but you are a noob. You're not getting information, you're getting undocumented third-hand gossip and conjecture from people who "swear they know people". This website is the anus of internet.

Take anontrader, for instance. Huge troll! If you believe anything he says you are a dumbass. How does a perfectly manicured, airbrushed advertising blurb in any way tell you how good a firm is??? Give me a pound of makeup and I can make any ugly person look like a perfect 10.

Getco's website is modest. It has almost nothing on it, because it doesn't feel the need to brag about itself or how many yoga musician golfing pros it has. Think about that for a second. The guy who drives the biggest, flashiest SUV invariably has the smallest penis. If your HFT firm really has to try that hard on the PR blurb, and if it has to stoop down to the level of shameless self-promotion through anonymous accounts on WSO, then maybe it has something to compensate for.

Anybody who isn't a complete moron and has some analytical skills can weed out the bullshit. You obviously don't fall in this category. If somebody puts up 100 names of prop firms and lists them from 1-100, it doesn't matter whether someone listed a certain firm as #3 or #99, I still have 100 firms to look into cold-calling or cold-emailing. Just because I want and like having these lists doesn't mean I'm getting on my knees in thanks that someone gave their opinion on which are good and which aren't.

So, yes, more information.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

10/13/14
10/13/14

talked to quite a few guys at IMC. This shop is heavily underrated and is going to be on the same level as Getco or Citadel.

10/13/14

what's the big hype about this Getco?

10/13/14

it's the greatest firm on earth basically. they're at least as selective (i would say more, but it's hard to measure) than Jane Street or Citadel, they trade all sorts of shit with a very small team of traders and make insane amounts of money. hours are great, office is nice, workplace is laid-back, you can wear whatever you want. and it's great to be hired there, they train new hires really really well and pay them better than any other company i've ever heard of. don't want to get into numbers but on another post someone else said that they didn't think it was much higher than Citadel compensation for second years (300-400), and i corrected them. it is significantly higher

10/13/14
arden:

it's the greatest firm on earth basically. they're at least as selective (i would say more, but it's hard to measure) than Jane Street or Citadel, they trade all sorts of shit with a very small team of traders and make insane amounts of money. hours are great, office is nice, workplace is laid-back, you can wear whatever you want. and it's great to be hired there, they train new hires really really well and pay them better than any other company i've ever heard of. don't want to get into numbers but on another post someone else said that they didn't think it was much higher than Citadel compensation for second years (300-400), and i corrected them. it is significantly higher

I'm sorry but I think Getco is overrated by WSO. Yes, it's true that their starting salary is astronomical, but you need to do some critical thinking and ask yourself why that is. The reason they can promise and deliver such standard high starting salaries is because they have a heavy handed profit-sharing throughout the firm. Profit-sharing is great when you're on the bottom of the totem-pole, but really holds you down when you become a star. If you are truly stellar, your upside will be lower at a place like Getco.

Please, take what you read on anonymous forums with a grain of salt. Think about it. Why can no other firms tell you what you're expected to make in 2 or 3 years, but Getco can? There's a reason for that, and the reason is profit-sharing. There's a tradeoff: Getco provides income security at the expense of a lower potential. If you're truly a badass, why would you limit your potential?

10/13/14
7toaster:
arden:

it's the greatest firm on earth basically. they're at least as selective (i would say more, but it's hard to measure) than Jane Street or Citadel, they trade all sorts of shit with a very small team of traders and make insane amounts of money. hours are great, office is nice, workplace is laid-back, you can wear whatever you want. and it's great to be hired there, they train new hires really really well and pay them better than any other company i've ever heard of. don't want to get into numbers but on another post someone else said that they didn't think it was much higher than Citadel compensation for second years (300-400), and i corrected them. it is significantly higher

I'm sorry but I think Getco is overrated by WSO. Yes, it's true that their starting salary is astronomical, but you need to do some critical thinking and ask yourself why that is. The reason they can promise and deliver such standard high starting salaries is because they have a heavy handed profit-sharing throughout the firm. Profit-sharing is great when you're on the bottom of the totem-pole, but really holds you down when you become a star. If you are truly stellar, your upside will be lower at a place like Getco.

Please, take what you read on anonymous forums with a grain of salt. Think about it. Why can no other firms tell you what you're expected to make in 2 or 3 years, but Getco can? There's a reason for that, and the reason is profit-sharing. There's a tradeoff: Getco provides income security at the expense of a lower potential. If you're truly a badass, why would you limit your potential?

One possible resolution of this problem is for Getco to make much more money in general than competitors. To what extent this is true or untrue is information I do not have, but I suspect that is what many posters believe.

10/13/14
7toaster:
arden:

it's the greatest firm on earth basically. they're at least as selective (i would say more, but it's hard to measure) than Jane Street or Citadel, they trade all sorts of shit with a very small team of traders and make insane amounts of money. hours are great, office is nice, workplace is laid-back, you can wear whatever you want. and it's great to be hired there, they train new hires really really well and pay them better than any other company i've ever heard of. don't want to get into numbers but on another post someone else said that they didn't think it was much higher than Citadel compensation for second years (300-400), and i corrected them. it is significantly higher

I'm sorry but I think Getco is overrated by WSO. Yes, it's true that their starting salary is astronomical, but you need to do some critical thinking and ask yourself why that is. The reason they can promise and deliver such standard high starting salaries is because they have a heavy handed profit-sharing throughout the firm. Profit-sharing is great when you're on the bottom of the totem-pole, but really holds you down when you become a star. If you are truly stellar, your upside will be lower at a place like Getco.

Please, take what you read on anonymous forums with a grain of salt. Think about it. Why can no other firms tell you what you're expected to make in 2 or 3 years, but Getco can? There's a reason for that, and the reason is profit-sharing. There's a tradeoff: Getco provides income security at the expense of a lower potential. If you're truly a badass, why would you limit your potential?

yeah that makes perfect sense. i guess it's just the case that all the stellar traders and superstars there happen to be idiots and don't realize how much money they could make somewhere else. i mean it's not like if someone was really brilliant and got hired at Getco they'd have the basic analytical skills to realize that their potential is limited once they've worked there a few years. i mean why else would they have a single digit number of people to ever have left the firm voluntarily

10/13/14
arden:
7toaster:
arden:

it's the greatest firm on earth basically. they're at least as selective (i would say more, but it's hard to measure) than Jane Street or Citadel, they trade all sorts of shit with a very small team of traders and make insane amounts of money. hours are great, office is nice, workplace is laid-back, you can wear whatever you want. and it's great to be hired there, they train new hires really really well and pay them better than any other company i've ever heard of. don't want to get into numbers but on another post someone else said that they didn't think it was much higher than Citadel compensation for second years (300-400), and i corrected them. it is significantly higher

I'm sorry but I think Getco is overrated by WSO. Yes, it's true that their starting salary is astronomical, but you need to do some critical thinking and ask yourself why that is. The reason they can promise and deliver such standard high starting salaries is because they have a heavy handed profit-sharing throughout the firm. Profit-sharing is great when you're on the bottom of the totem-pole, but really holds you down when you become a star. If you are truly stellar, your upside will be lower at a place like Getco.

Please, take what you read on anonymous forums with a grain of salt. Think about it. Why can no other firms tell you what you're expected to make in 2 or 3 years, but Getco can? There's a reason for that, and the reason is profit-sharing. There's a tradeoff: Getco provides income security at the expense of a lower potential. If you're truly a badass, why would you limit your potential?

yeah that makes perfect sense. i guess it's just the case that all the stellar traders and superstars there happen to be idiots and don't realize how much money they could make somewhere else. i mean it's not like if someone was really brilliant and got hired at Getco they'd have the basic analytical skills to realize that their potential is limited once they've worked there a few years. i mean why else would they have a single digit number of people to ever have left the firm voluntarily

With your heavy sarcasm, it's not clear what point you're trying to make. You aren't really *saying* anything in your post.

Are you saying that there is no profit-sharing at Getco? Or are you saying that profit-sharing is a good thing? I'll agree with you that in many cases profit-sharing is a good thing, and it seems to fit well into their culture. One of the things profit-sharing does is breed a friendlier and healthier atmosphere. However, profit-sharing is not an absolute good, and is not without its costs.

10/13/14

damn... what venues do they recruit from? straight out of undergrad or are they looking for people with a track record

10/13/14
10/13/14

Does the trader have to have great programming skills at Getco ?

10/13/14

i'm saying you're a fucking idiot because you're trying to tell everyone that Getco holds you down when you become a star. if that were true, stars would leave....

10/13/14

What's with the lowbrow personal attacks? What's wrong, widdle kid, did your mom dress you badly today? Did you get a boo boo?

I never said that Getco holds anyone down. I said profit sharing holds the top down. It's a fact. Socialism lifts up the bottom at the expense of the top. On the other hand, many people probably like socialism, after all we elected Barack Obama. Look, kiddo, there is zero debate we can have on whether profit sharing holds the top down, because that's what it is by definition. It gives you more stability and security and a lower potential upside. It's safer, and lower risk, which is very appealing to many people.

If you're saying that large scale profit sharing *does not exist* at Getco then that's another story altogether and all of the information that people have been giving me is wrong.

So Arden, go consult your sources, does large scale profit sharing exist? Because mine all say yes, lol.

10/13/14

haha okay. i'm sure the people at Getco will be thrilled to hear of your high opinion of their altruism. i'll leave it up to readers of the forum to decide whether it's more likely that 1) Getco actually just makes more money than other firms and insecure people from inferior firms, like you, feel the need to make up dumb reasons why that's not true or 2) top people at Getco are so selfless that they are okay with the implementation of profit sharing even to the extent that their pay is severely curtailed and STILL don't leave

10/13/14
arden:

2) top people at Getco are so selfless that they are okay with the implementation of profit sharing even to the extent that their pay is severely curtailed and STILL don't leave

Wow Arden, you really should do your research before posting, you sound like a mega n00b. Our whole dispute can be solved instantaneously if you just ask one of your friends who works at Getco and ask them if they have profit-sharing. However, since you haven't, it's obvious you don't have any friends at Getco. And therefore you are unqualified to be having this discussion and you should please stfu, sit down, and let the adults discuss. It's not like they even hide the fact that they implement profit-sharing. It's not some big proprietary business secret.

Arden, talking to you is like talking to a 6 year old.

"and still don't leave"???

It's called a noncompete clause. Have you heard of it? There's a big price to pay for leaving, you know that right? If you do choose to leave, they'll activate your noncompete and pay you only the base salary (which is gonna be like 20-30% of your Getco bonus) while you twiddle your thumbs for a year. If you do the math, it usually makes sense to hold onto the 1 bird in hand rather than let it go to take a risk for the 10 birds in the bush.
I am just a college student with lots of friends that have gone through recruiting, ok? I don't have a bone to pick with anyone. I just don't like how WSO can, without any reservations, say that Getco is some kind of utopian idyll. There's only one company that is truly paradise: it's a large California software company and it gives its employees free massages and it is mainly focused in making the world's information useful and accessible for all of humanity.

10/13/14

Getco is a top firm no doubt. Whatever their culture is it is working because they have been maintaining their stance in a mkt that is getting thinner. Absinthe's ranking of deriv's MM is accurate.

Louis Dreyfus will probably loose its ranking on the energy side as they have lost a number of key traders.

10/13/14

Hi,
I am a recent undergraduate working in an asset management firm. It has been my passion and dream to become a trader. I have interviewed with several of the top prop trading shop such as Jane Street, Optiver, Tibra and etc. I didn't have any trouble passing any of their screening tests or brain teasers, but for some reason, I am just can't seem to pass any of their final round, which is usually semi-technical conversations with their traders.
And now, I am starting to think there might to certain quality I am missing. Can anyone please advise me what are the qualifies top traders look for? This is really bothering and hurting my confidence. I actually felt some of those final rounds went pretty well as many of my answers resonated with the interviewers follow up, but I still came up short of an offer.
Thanks in advance!

10/13/14

First piece of advice: post this question ONCE in it's own topic. Didn't need to post it three times in three different topics.

As for your question, I don't know the answer to that.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

10/13/14

Met a few first-year Jump traders this past week. Really smart kids who majored in CS at top schools like MIT/Stanford/Berkeley. One of the guys brought up Getco and saying how tough their interviews are. He said the reason Getco employees almost never leave is that they get an equity stake in the firm, which increases every year, and the payout doesn't happen until later on. So even if you want to leave, the prospect of getting that big paycheck a few years down the road makes it difficult to leave.

10/13/14

i like how i made this thread to be fodder and out of sarcasm and its actually been reborn. signs of WSO's quality deterioration ;[

10/13/14

Getco is for sure the best independent prop trading firm worldwide.

But at BB or HFs you can earn much more as a world-class trader. Only the founders of the prop shops are truly making money.

I would bet the two founders of Getco earn 5 times more than the firm's best trader.

10/13/14
RexAlpha:

Getco is for sure the best independent prop trading firm worldwide.

But at BB or HFs you can earn much more as a world-class trader. Only the founders of the prop shops are truly making money.

I would bet the two founders of Getco earn 5 times more than the firm's best trader.

At what they do, Getco are undeniably good. But there are so many different styles of prop trading that it's impossible to make such sweeping statements.

Also, it doesn't make sense to say that a top trader at Getco would earn much more at a BB or HF. Getco's style is ultra-high frequency - they get in and out of positions before you can bat an eyelid and eat up a tiny spread on the way. As such, these strategies wouldn't be of much use to a hedge fund because they have absolutely no scalability. Yes, any hedge fund would love to run a strategy with a Sharpe of 10+, but if it only has a capacity of $10mm then would you offer it to external investors? Of course not. You'd trade it with your own money - just look at what RenTech have done with the Medallion fund. Banks, on the other, do have groups who directly try to compete with Getco and the like. In general, they struggle to keep up with the pace. That's not necessarily because they have less intelligent people, but high frequency trading is a technological arms race and the bureaucracy that goes on within banks prevents them from competing on this front - by the time you've jumped through all the hoops to get faster computers, the things you end up with are already out of date. A prop firm like Getco is much more nimble in this sense, so they are always at the cutting edge of technology.

As for the founders of Getco earning much more than their employees, isn't that obvious? They built the firm, put up all of the capital and thus take on all of the risk. Regardless of how much the owners earn, I can promise you that no-one at Getco is poor.

10/13/14
RexAlpha:

Getco is for sure the best independent prop trading firm worldwide.

But at BB or HFs you can earn much more as a world-class trader. Only the founders of the prop shops are truly making money.

I would bet the two founders of Getco earn 5 times more than the firm's best trader.

You people on this site don't know the half of anything about this company

10/13/14

There is no struggle, the banks will win the race, they got 10 times more capital than the prop shops...

Okay, Goldman Sachs heavily reduced its proprietary activities, but other banks enlarged their activies.

For example RBC Capital Markets, they got a new system called Thor, which competes with HF-Market Makers on exchanges, trying to match better prices for institutional clients of RBS Capital Markets.

The Prop Shops equity isnt that much to compete with large algo traders like GS or Barcap.

Remember the french guy Jerome Kerviel( Junior Trader at SG CIB), he was able to enlarge his daily positions up to EU100 billion on his trading desk, cause his MDs deactivated the control systems. The normal limit was EU125 million, which is pretty much for a single trader, in prop shops they trade with smaller sums.

I know that at JP Morgan's proprietary divisions, the limits were set to +$250 million per senior trader, the division generate every day more than $75 million dollar profit.

At Getco the annual profit lies between $200 and $500 million.

10/13/14
RexAlpha:

There is no struggle, the banks will win the race, they got 10 times more capital than the prop shops...

Okay, Goldman Sachs heavily reduced its proprietary activities, but other banks enlarged their activies.

For example RBC Capital Markets, they got a new system called Thor, which competes with HF-Market Makers on exchanges, trying to match better prices for institutional clients of RBS Capital Markets.

The Prop Shops equity isnt that much to compete with large algo traders like GS or Barcap.

Remember the french guy Jerome Kerviel( Junior Trader at SG CIB), he was able to enlarge his daily positions up to EU100 billion on his trading desk, cause his MDs deactivated the control systems. The normal limit was EU125 million, which is pretty much for a single trader, in prop shops they trade with smaller sums.

I know that at JP Morgan's proprietary divisions, the limits were set to +$250 million per senior trader, the division generate every day more than $75 million dollar profit.

At Getco the annual profit lies between $200 and $500 million.

Having capital is great, but the problem is scalability. As I said before, high frequency strategies just aren't scalable. So the fact that banks have much more capital than prop firms like Getco is irrelevant. Bare in mind that prop and high frequency algo trading are not one and the same, so it doesn't make sense to compare the general prop activities of a bank to a firm like Getco.

Anyway, if capital alone was enough to win the high frequency race, then firms like Getco would not exist as banks would have killed them off long ago. The real edge is in technology and getting smart people to run that technology effectively. Banks struggle with this because they are too slow to adopt the latest developments and the best computer scientists have no interest in working for big, bureaucratic organisations.

Offer anyone in the high frequency team at Goldman a job at Getco and they'll bite your hand off...

10/13/14
bambi:

Having capital is great, but the problem is scalability. As I said before, high frequency strategies just aren't scalable. So the fact that banks have much more capital than prop firms like Getco is irrelevant. Bare in mind that prop and high frequency algo trading are not one and the same, so it doesn't make sense to compare the general prop activities of a bank to a firm like Getco.

Anyway, if capital alone was enough to win the high frequency race, then firms like Getco would not exist as banks would have killed them off long ago. The real edge is in technology and getting smart people to run that technology effectively. Banks struggle with this because they are too slow to adopt the latest developments and the best computer scientists have no interest in working for big, bureaucratic organisations.

Offer anyone in the high frequency team at Goldman a job at Getco and they'll bite your hand off...

There is no race between prop firms and Bulge Brackets like GS or CS. It was my fault to compare big banks with prop shops, beacause this is stupid, cause they have different strategies. Proprietary Trading today needs HFT strategies, because there's a race in trade execution, in arbitrage the bank with the best execution gets the whole money. The focus of prop shops lies not on fast trade execution, it's more the quantitative way, more analysis. In speed terms, the large banks lead.

I must repeat, annual profit of a very good prop shop like Getco reaches a maximum level of $500 million.
JP Morgan's proprietary division generates everday more than $75 million.

Prop shops are niche players, they're searching for opportunites the big banks left out.

You're right in the point that big banks are too slow to adopt new technology, they're not only too slow, they're too big. The best computer scientists always work in research at MIT, Stanford and Co, cause they're not interested in money. So when prop shops or big banks offer them money, they fail.

10/13/14
RexAlpha:

There is no race between prop firms and Bulge Brackets like GS or CS. It was my fault to compare big banks with prop shops, beacause this is stupid, cause they have different strategies. Proprietary Trading today needs HFT strategies, because there's a race in trading execution, in arbitrage the bank with the best execution gets the whole money. The focus of prop shops lies not on fast trade execution, it's more the quantitative way, more analysis. In speed terms, the large banks lead.

I must repeat, annual profit of a very good prop shop like Getco reaches a maximum level of $500 million.
JP Morgan's proprietary division generates everday more than $75 million.

Prop shops are niche players, they're searching for opportunites the big banks left out.

You're right in the point that big banks are too slow to adopt new technology, they're not only too slow, they're too big. The best computer scientists always work in research at MIT, Stanford and Co, cause they're not interested in money. So when prop shops or big banks offer them money, they fail.

Proprietary trading, in general, doesn't need speed. High frequency trading does. All that is implied by prop trading is that the capital being used does not come from an external source. The styles can range from ultra high frequency to long term macro. So the fact that JP Morgan's prop division generates $75mm/day compared to Getco's $500mm/year is again irrelevant since Getco's focus is purely high frequency. Even then, when you consider the risk adjusted return I have no doubt that Getco would come out on top. A more meaningful comparison would be to compare the profitability of the high frequency groups in banks to Getco.

Banks do try to compete with firms like Getco and they cannot keep up with the pace. Believe me, I've been on both sides of the fence and the difference is night and day. You're right in saying that high frequency trading firms are niche players, but as things stand it's the banks who are looking for the opportunities that they have left out, not the other way around. Between them, Getco, Knight and Citadel are responsible for around 50% of the daily activity on the NYSE - that's three firms whose combined capital is dwarfed by a someone like Goldman. This alone is indication that banks can't win the speed race, because if they could then they would have eaten up those opportunities first. Getco/Hudson River/Jump/etc. are what the high frequency teams in banks aspire to be like, but they do not have the technology let alone the manpower. For example, Goldman's high frequency team employs around 30/40 people worldwide whereas Getco employs around 350 people, the vast majority of whom are quants or software engineers. Add to that the simple fact that any quant/programmer who wants to work in high frequency trading and has done their homework would take Getco over Goldman any day of the week, you get a good idea of the difference in the quality of the people between the two organisations.

10/13/14

I have never worked at any of these prop trading firms, so take what i say FWIW, but I think its notable that places like Getco seem to create a structure that doesnt include people becoming "stars" and this is why you dont hear about people leaving with big deals at other places as often. At a big name hedge fund you have alot of contact with the sell-side and smart people build names for themselves quickly which allows for alot of opportunity elsewhere. Contrast that with an anonymous programer at someplace like Getco.

It seems likely to me that the founders/higher-ups at a place like Getco actively work to create a flat structure, both in idea generation and in pay, to actively discourage people from becoming stars and therefore leaving sooner. So they pay people more early-on but then they keep them there by not letting them become high-profile and that keeps their pay from skyrocketing as they become more senior. This is mostly just my conjecture, but I think its backed up by the fact that I cant name one senior-level person (other then the founder) at any of these firms whereas I can name several "non-founders" at most qualitative hedge funds.

10/13/14

The fact that GS employs up to 40 people in the whole division shows that their trading is fully automated, their trading staff is reduced to 10 people, most people there are educated in Computer Science and Math( A lot of PhDs) Believe me, GS has better technology.

You're right that Getco trades Ultra High Frequency but that results in Ultra low earnings. Getco VaR is 10times smaller than the BBs competitors, but they earn rare compared to JP Morgan or GS.

So far I know, ten firms are responsible for more than 40% of daily volume in US Equities. In US Futures up to 100 Firms dominate up to 70% of the whole OTC market.

Believe me, in electronic trade execution the BBs lead the way. GS Electronic Trading has the same software developper than RenTec, GS spends billions for new algo software, they got also the fastest computers. That Prop firms generate more volume means not that they have faster trade execution.

Cause many prop firms have high security standards you hear only good things from them, but their faults aren't public. I bet that many prop firms lost high sums in the 2010 flash crash or the commodity crash in may 2011.

10/13/14

Getco's trading is fully automated. There is no manual execution or discretionary trading going on there. And yes their earnings are low per trade, but they make so many trades with such little risk that this it all adds up to something very impressive.

You keep contradicting yourself and making up statistics. Earlier, you correctly agreed with me that banks are too slow too adopt new technology and now you're telling me that Goldman have better technology than Getco. Also, I know for a fact that Getco, Knight and Citadel alone are responsible for 50% of the daily activity on the NYSE - that's a lot of spreads to eat up, so if Goldman were so hot then why would they let that pass by?

I think we're just going to have to agree to disagree...

10/13/14

The rise of Getco and others is fueled by the Volcker Rule. Big Banks reduced their prop trading activies and concentrate more on DMM, and liquidity providing for institutional clients.

The downfall of sales&trading has already begun. In 2009 GS $34 billion profit with their sales&trading divison, that was all before the volcker rule (They had also 131 $100 income trading days, a great record).

The fundament of sales&trading,FICC will remain, but equity trading definitly will be reduced.

I see a great position taking war between HFs and prop firms. In times of this upcoming war I would prefer working in a prop firm like Getco. Never heard that massive amounts of prop firms went bancrupt, but HFs did it in 2008.

10/13/14

RexAlpha:
The rise of Getco and others is fueled by the Volcker Rule. Big Banks reduced their prop trading activies and concentrate more on DMM, and liquidity providing for institutional clients.

The downfall of sales&trading has already begun. In 2009 GS $34 billion profit with their sales&trading divison, that was all before the volcker rule (They had also 131 $100 income trading days, a great record).

The fundament of sales&trading,FICC will remain, but equity trading definitly will be reduced.

I see a great position taking war between HFs and prop firms. In times of this upcoming war I would prefer working in a prop firm like Getco. Never heard that massive amounts of prop firms went bancrupt, but HFs did it in 2008.

Eh, vast majority of prop trading firms are pretty boring IMO unless you absolutely love algorithmic trading and writing code. Hedge funds are much more fascinating, especially the multi-strategy and macro funds.

10/13/14

The upcoming rival of Getco and Knight Trading (ETG) will be Guggenheim Partners.

They started a fund with $500 million in equity, designed to manage up to $4 billion in capital. They have hired 3 complete trading desks of GS's prop trading division. So far I know they'v got also the best server and trading execution technology.

The fund---> Guggenheim Global Trading LLC
http://www.pionline.com/article/20110302/DAILYREG/...

http://www.businessinsider.com/Guggenheim-to-hire-150-proprietary-traders-fleeing-banks-2011-3

I give Guggenheim Partners 5 years to close up with Getco. Knight is leading on US equity markets, beating Knight will be very difficult...

10/13/14

I just wanted to comment that the guys at the HFT firms like Getco to me really are not traders. They are just programmers who create code to take a penny off of every trade. They dont learn anything about the markets and I can assume spend most of their day just looking at numbers on the screen and trying to make 40 million trades a day with a little more than 50% of the trades making 1 cent.

This is a consistent strategy until it doesnt work anymore which its time will come. I think they are in for a rude awakening in the markets. Already nearly 80% of the NYSE stock trading volume is algos. They all nearly have the same strategy and same technology.

The one who does not fall, does not stand up

10/13/14
ProdigyOfZen:

I just wanted to comment that the guys at the HFT firms like Getco to me really are not traders. They are just programmers who create code to take a penny off of every trade. They dont learn anything about the markets and I can assume spend most of their day just looking at numbers on the screen and trying to make 40 million trades a day with a little more than 50% of the trades making 1 cent.

This is a consistent strategy until it doesnt work anymore which its time will come. I think they are in for a rude awakening in the markets. Already nearly 80% of the NYSE stock trading volume is algos. They all nearly have the same strategy and same technology.

Exactly

They have majors in Computer Science and Financial Engineering, all they do is programmig algos, no trading.

But this is the future, automated trading withdraws higher earnings in fin-markets. Maybe HFs can build a wall against HFT and Algo trading through old fashioned trading (Arbitrage, Event driven).

Algo and HFT traders only now trend follwing strategies based on media or insider information and then Long/Short Arbitrage, wow thats so fucking amazing.

This discussion about the benefits of HFT/Algo Trading seems to me like intellectual masturbation.

10/13/14
ProdigyOfZen:

I just wanted to comment that the guys at the HFT firms like Getco to me really are not traders. They are just programmers who create code to take a penny off of every trade. They dont learn anything about the markets and I can assume spend most of their day just looking at numbers on the screen and trying to make 40 million trades a day with a little more than 50% of the trades making 1 cent.

This is a consistent strategy until it doesnt work anymore which its time will come. I think they are in for a rude awakening in the markets. Already nearly 80% of the NYSE stock trading volume is algos. They all nearly have the same strategy and same technology.

haha yes, this is what you might think if you knew literally absolutely nothing about high frequency trading or Getco. nothing could be further from the truth

10/13/14
arden:

haha yes, this is what you might think if you knew literally absolutely nothing about high frequency trading or Getco. nothing could be further from the truth

You proved that you're a fool, the main component of HFT is computerized trade execution.

I can tell you something about HFT Trading firms. You think that there are many traders, switching large positions through algo trading and HFT mechanism. You're actually wrong. The most work done by humans is resarch and programming. You watch too much CNBC, seeing all the "experts". In HFT firms there small groups of real traders needed, the bigger groups consists of Quants, they're doing research.

The most here are talking about Quant Traders and Quantitative Trading, the most ignoring that all so-called Quants do in generally research not trading.

I studied Fin. Math, the Quants studied CS, Financial Engineering, Applied Physics or Applied Math. The main component of their degree program is research.

So tell me where in their courses do they learn trading ???
http://finmath.stanford.edu/people/faculty.html

http://www.maths.ox.ac.uk/prospective-students/gra...

You see RESEARCH, ANALYSIS, PROGRAMMING

When you want to learn something about HFT or Algo Trading read Narangs "Inside the black box" or Irene Aldridges "High Frequency Trading"

10/13/14

Alright this is ridiculous. Rex> No need to get offensive. Especially when both books you listed are some amateur level hashjobs. Also no academic program teaches you how to trade. If it was already known in academic circles, there is about a 0% chance there is any alpha left in it. I say this from actually having contacts at these places, interning at these firms, and also knowing what is taught to students who get these degrees.

You guys want to talk about HFTs and the like, go to NuclearPhynance or (a step back) Wilmott. There is a lot you guys need to learn if you think that HFTs are in competition with some of these other strategies. Each of these areas have a particular niche and a limited amount of alpha to extract from that particular niche. Comparing them (HFT to options MM for example) to each other is actually stupid.

10/13/14
baddebt88:

Alright this is ridiculous. Rex> No need to get offensive. Especially when both books you listed are some amateur level hashjobs. Also no academic program teaches you how to trade. If it was already known in academic circles, there is about a 0% chance there is any alpha left in it. I say this from actually having contacts at these places, interning at these firms, and also knowing what is taught to students who get these degrees.

You guys want to talk about HFTs and the like, go to NuclearPhynance or (a step back) Wilmott. There is a lot you guys need to learn if you think that HFTs are in competition with some of these other strategies. Each of these areas have a particular niche and a limited amount of alpha to extract from that particular niche. Comparing them (HFT to options MM for example) to each other is actually stupid.

Thanks

The books are helpful for him to understand easily...

Trading cant be learned, it's in your blood. You can try to learn or understand to trade, but you must have it in your blood when you want to achieve astonishing track records and huge income.

There are no academic programs because trading is not an academic skill to train , its naturally gifted or god given( for the religious people).

10/13/14
RexAlpha:

The books are helpful for him to understand easily...

wow thanks i'll be sure to pass along your suggestions to co-workers at my hft firm

10/13/14
arden:

wow thanks i'll be sure to pass along your suggestions to co-workers at my hft firm

And my name is Santa Claus

I guess you're unemployed, wasting your time posting annoying comments

10/13/14
10/13/14
brooksbrotha:

Isn't Glencore a trading firm?

Glencore has a trading arm. Glencore trades commodities mainly physical, using derivatives only to hedge positions.

Clearing in ICE Futures Europe: Glencore Commodities Ltd.

Glencore's main competitors (Physical trading) are Vitol SA, TOTSA, Shell Trading, Trafigura, Gunvor and Mercuria energy trading.

Vitol SA is the "Goldman Sachs" in Oil Trading
http://www.vitol.com/group-performance.html

Alex Beard, the Global Head of Oil Trading at Glencore turned into a billionaire after the IPO.

10/13/14

Don't equate RexAlpha with "us people."

10/13/14

Toro Trading is a another up and coming derivs firm.

10/13/14

Good progress on listing GC. Also Cargill, ADM, Bunge, LDC (surprised that's the only other one listed prior), Noble, Mercuria, Olam...

10/13/14

What about chimera securities? It is above or below T3 Trading?

"It's not that I'm so smart, it's just that I stay with problems longer." - Albert Einstein

10/13/14

Could somebody please shed some light on Gelber Group? I may intern there this summer but I can't find much at all about them.

10/13/14

Does Timber Hill even exist anymore? I see that they are owned by Interactive Brokers, but I can't find any recent info on Timber Hill on their website. Nothing about their trading operation or anything.

10/13/14

How does Belvedere stack up against drw/ctc/Optiver?

http://www.jasonbondpicks.com
10/13/14

read "one good trade" by mike bellafiore great book on this subject.

10/13/14

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