Can anyone shed light on KCG(or former Getco)?
I got a first round interview with KCG for a EQ trader role. The only thing I know about them is that they're formed by merger of Knight Capital Group and Getco,
How are these guys doing right now? Are they still the top on the prop trading industry as Getco was, or are they focusing on other stuffs as they turned a public company. Should I expect hardcore programming questions as they focus on electronic trading (which Getco was doing)?
I will appreciate any info about this company and its interview process. Thanks in advance guys.
Did you apply online? I was under the impression that right now they are only hiring people with Masters degrees or proven track records as they have been getting slammed since the merger.
I applied both online and referral by networking with my alumni. I'm don't have a Masters degree or track records; I am actually an undergraduate from a semi-target school and definitely not a rock-star programmer. Pretty interesting..
I'm doing a masters in CS and got an email reminder about their campus presentation. They're the only company that I've heard from so far.
They are certainly not doing as well as they were before. The industry has changed (volumes and margins lower) and their model that made a killing in the 2000s is becoming less and less relevant. That said, people are leaving/they are trimming the fat in order to get back into the game again with new pushes in HFT.
Ever heard of Getco? (Originally Posted: 02/16/2013)
I have an IB friends told me that average traders (fresh out of undergraduate) made a base salary of $200k in Getco and the bonus go up as high as 150% of your base salary. Can anybody please confirm or reject this statement, please?
Is Getco a well-known company as GS and JPM? I never really heard of it. This same friend told me that Getco has majority of the employers come from MIT or Stanford background.
Yes, Getco is an extremely well-known firm. Just not by 99% of Americans who are more worried about why milk went up by 15 cents/gal at Walmart.
getco pays a lot more than any BB but to get in there you'd probably need to be in the international math olympiads during highschool or a putnam fellow..
They take top notch CS/Math kids - fluency programming is essential. They also tend to look down upon corporate culture.
they work easier hours than BBs (though stress is just as high), make a shit ton more, and laugh at investment bankers who grind away building pointless models just to land a deal...
It's very tough to get a job there. They tend to hire math/cs whiz kids from harvard, mit, and stanford. I got to final round interviews before getting dinged. It's probably the only prop shop I would have taken over my current BB trading job.
Regarding compensation, base is NOT $200K for first-years. The year I applied, it was around $100K. No idea on bonuses, but they can get very high very quickly depending on how good you are and the profitability of your desk. It is not at all uncommon for 25-26 year olds at GETCO or Jump to make $500K/year.
http://www.wallstreetoasis.com/forums/getco-disclosure
I would be stunned if this level of pay continues. Profits are off quite a bit and that is just based off of what is publically available.
What year? Sounds like 2008-2010.
Over the last few years when GETCO did well, its compensation was very high. 25 year olds making 7 figures was not uncommon. Pay has come way down however with recent declines in performance. Dealbreaker's article at 2013/02/Getco-hoping-that-acquiring-knight-capital-will-bring-back-some-of-the-excitement-of-its-glory-days/ compares Getco's historical per-employee revenue and compensation to that of Goldman Sachs.
Thanks, so what does one expect the total compensation for Getco to be for this year 2013? 100k base + 300k bonus?
Look at the S4 filing from Getco/Knight. You can calculate average historical comp from that report.
The bonus will depend obviously on your group's performance.
GETCO is a very reputable firm & used to make astronomical profits. Emphasis on "used to"
A lot of Algo Market makers are having a harder time getting a edge because of so many other players entering the mix, and the costs of overhead are huge. This isn't the kind of operation where a bunch of schmucks play around with etrade accounts, they have to pay up for the heavy machinery.
My friend's salary isn't anything too far out of line with what a banker would make given the fact most of us are getting payed less than pre-08, but she works more tolerable hours (a quant trader). As others have said they prefer to hire the creme de creme of math whiz kids from ivy league schools to their desks, so getting in would be quite the challenge.
Bonuses on the other hand are tied to group p&l, and her first year (2012) she managed to make 150k for herself.
So it's definitely a good living, but it's not some road to El Dorado. We're in a business that's akin to everyone thinking they can beat traffic by waking up an hour early, but since everyone is doing it traffic becomes just as slow.
GETCO, are things as bad as they look? (Originally Posted: 04/20/2013)
From news Getco financial results look quite poor: several years of declining revenues, layoffs, etc. Anyone have an inside scoop on what's going on in there? Is it a turnaround story, cyclical downturn, or just straight-up decline?
What's the base for their dev's? I just got a head hunting email saying there is a shop offering 160K + Bonus. F trading if I can pull that. lol.
yeah they're filing chap 11 soon
I have a very good friend from college who used to work there. Basically, it all boils down to the disconnect between top-level management and most employees. As you know, high frequency shops tend to be very selective and only hire programmers and people with very strong quantitative backgrounds. However, the people who control everything at the top can be described as anything but... I would not go so far as to say that they are downright incompetent, but you have to realize these guys are antiquated dinosaurs (the founders are former pit traders) who would wouldn't even get passed the initial resume screen if they applied for a job at their own firm today.
The people in charge have more in common with the former college lacrosse players and jocks that dominated Wall Street trading desks in the 1980s. This is the Wall Street that Michael Lewis described in Liar's Poker, where traders made their living through "intuition" and the day-to-day work was full of chaos and screaming, swearing and pushing. Today, this kind of trader is a dying breed. The people who are filling trader roles are guys with quantitative degrees in math and computer science.
To be blunt, a company cannot hope to maintain long-term success if the people in charge do not have the core competencies or do not understand (or only have a superficial understanding) behind the technology that enables them to make money. Technology will improve and/or change. Certain strategies that used to work may one day stop working or will become less profitable. The solution is not to simply hire more programmers - one will run into the problem of diminishing returns. Rather, one needs to do an honest and fundamental reevaluation of their Company from the top down. However, if you do not have the core competencies to begin with, you will not realize where the problems are. Instead of finding a solution to the problem, your default reaction will be to throw money at the problem (e.g. hire more programmers) and hope for the best. Sadly, it is path that will inevitably lead to failure.
Of course, you have to give these guys credit for realizing the opportunity that would arise from the increasing importance and reliance of technology in trading. They got in early and hired a lot of smart people from non-traditional finance backgrounds (e.g. programmers, mathematicians, scientists). In the process, the founders and senior partners at the top made A LOT of money for themselves while the smart employees they hired - though very well compensated relative to the Street - only received a small fraction of the total value they created.
Based on their S4 form they hired ~100 people and expanded their balance sheet $500mm during the past year to expand non high frequency trading. While $500mm change in balance sheet is small as far as finance is concerned, it sounds like a whole lot for a firm that traditionally didn't keep overnight positions. They are also purchasing Knight, which is a somewhat overlapping but also complementary business. This sounds like a firm that realizes change is necessary and is executing upon it.
I am waiting with bated breath to see how all this plays out. If they fail, who would succeed? Technology costs are ripping higher, so small shops will have problems keeping up. And why would anyone think that other firms aren't having similar problems? It's just that this info is extremely secretive, and we all assume that they are making untold fortunes.
Deo: Highly disagree. Yes, the co-founders were former pit traders, but they recognized the potential of electronic trading in 1999, founded, GetCo, and now they have over a decade of managing an e-trading company. Pretty sure they're as knowledge about this market as any other executive at any other company. And you give your bias away in your last sentence, about how the non-founder employees "only received a small fraction of the total value they created" -- really, do you not acknowledge founding a new company (and paying all the costs of it out of your own pocket for the first several years, deciding the strategy, hiring the people to implement that strategy, etc) was a pretty frickin' huge part of the "total value creation"?
massiveattack: Yeah, I'm curious too. I was offered a job at Getco a year ago (comp was VERY good but I didn't take it for other reasons). The people seemed sharp, though. That was before the Knight merger and the recent S-4 disclosure. From the S-4, it looked like 2007-2009 were incredibly good (as you'd expect for a market-maker during the financial crisis) and 2010-2011 were fine (not nearly as good as the peak years but you can't expect normal times to be as good as the crisis times). But then something bad happened in 2012 and revenues fell apart. No idea why, no idea if that'll continue into next year or not.The decline in profit could mean anything (like investing for the future, accounting to make the Knight merger success look better, etc), but the decline in revenues is troubling. The real question is whether that's due to increased competition, or just unusually low VIX for the past year. Your guess is as good as mine.
morgantire: You were out of school? Out of curiosity, what were the reasons you chose elsewhere? Up until now offers from them seemed like something that one does not simply decline.
In my case, I declined simply for the boring reason that my fiance wasn't able to relocate. Nothing more than that. The people and the company and the offer all seemed good. I have no idea what (if anything) has changed over the past year, but based solely on my experience then, I would certainly recommend speaking to them if you have the opportunity.
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Knight Capital - Info/knowledge about the group? (Originally Posted: 04/24/2008)
Does anyone have any info/knowledge about Knight Capital Group?
Bump. Would be interested as well.
They have a pretty descriptive website, especially for the Electronic Trading group.
GETCO - has anyone heard of this firm? (Originally Posted: 10/31/2007)
They're recruiting very aggressively at Stanford. Google search reveals it to be yet another high frequency prop-trading firm. Does anyone have knowledge of this firm's reputation/pay/opportunity etc. ?
I've never heard of this group but it appears that they received backing from General Atlantic Partners. These guys are one of a handful of PE groups that I have seen invest in financial services and technology businesses (areas where you don't generally see much PE activity). I would be very interested to hear how they did in August given the carnage in stat arb land, an area in which these guys seem active. I found the following link that provides some good info but it is a bit dated and may not even be accurate.
http://blogs.wsj.com/deals/2007/04/13/trading-firm-getco-gets-big-priva…
about GETCO. I'm probably going to have to choose between them, Citadel's FTAP and DRW
These firms are both good choices however be careful of the High Fequency only shop. If the transaction tax as proposed by congress comes along it could be bad for them.
I am a headhunter for guys like you and could introduce you to some other great options.
Feel free to contact me at [email protected]
getco is number 1 in high frequency, by most measures. now, it's all technology - but that's not a bad thing.
Knight Capital - Stock (Originally Posted: 08/06/2012)
I want to start this off by saying that I'm aware of how risky this trade is and that loosing $400 million is an unforgivable mistake even if it was done by evil skynet robots, but if a company is willing to give them more capital it makes me think there might be something here. The stock continues to go down, and it's a steal right now for a company that is worth $400 million. Is it a good idea for me to put a small amount of money into this stock and see if I can double it?
The stock went down because common equity is being diluted by new capital. It's a correction; the value proposition is largely unchanged, except that Knight is now better capitalized.
Just initiated a covered call this morning. Not a big trade but i plan on selling calls for the next few months if it does not reach my target.
I don't think it'll double anytime soon unless you hold for awhile and they buy back a ton. Though I bought and sold covered calls as well. >.> Small trade.
Huge drop this morning made the price very attractive for the medium term and the increased volatility has beefed up premiums. Bought KCG at 3 and sold SEP 4 C. I will most likely roll it over a few times.
well im getting free commissions for now so it doesnt really matter. also i do not want to face the possibility of early exercise
why is loosing $400 mil so bad? isn't tightening $400 mil bad too?
I was just looking up this company this morning as well. If they fixed the bug, this shouldn't affect the long-term company performance, IMO.
I haven't looked into it much but from what I've heard at the current price once the bonds become converted to equity the Market Cap will essentially be larger than it was before the mistake. I've also heard that morale is down huge at the firm and no is working as hard as they used to and are leaving right at 5 which could be a bad sign.
Trouble at GETCO? (Originally Posted: 12/02/2011)
I heard this yesterday from a very reliable source. Apparently, Getco is having a rough time, and they had to drastically cut down on bonuses this year. A lot of the employees are thus heading for the exits. This seems to fit in with a headhunter telling me earlier this week that a lot of Getco traders and quants are on the job market.
I can confirm that they're actually recruiting. I've been contacted by at-least 2 HHs about gigs at GETCO within the last month. Not that it disproves that they're in trouble, but I would imagine they'd not be recruiting so aggressively if that was the case.
Agreed. I know someone who recently got a job offer from them. This is for undergrad recruiting though...
^ could be a false signal; firms often keep pinging applicants or doing career fairs to give the impression that things are normal even if they have stopped/cut back hiring. BBs do this regularly.
absolute nonsense. not true in the slightest
Article in yesterday's WSJ about Getco buying BoA's NYSE floor operation:
http://online.wsj.com/article/SB100014240529702043977045770707315577512…
Getco has been in a downward spiral for the last few years. Things have accelerated to the downside this year, and that's why so many Getco employees are looking around.
The problem at Getco seem to be their inability to make quantitative strategies work. The firm is built around having manual traders 'tweak' simple ideas and them let incredibly fast infrastructure get you firs in line. This works great as long as you are first in the queue. As competition chipped away at the speed advantage, Getco attempted to buy and create quantitative models, but nothing has worked. The culture was phenomenal for taking a working model and scaling it across the world. Getco is clearly a good implementer and a poor innovator. The company still makes money, and I'm sure it will be around for a long time. It's just gong to take time til it can get some traction.
^ complete bullshit
Sounds pretty plausible to me. Why else would they be laying off so many employees?
http://www.ft.com/cms/s/0/b6bf723e-b5a9-11e1-ab92-00144feabdc0.html#axz…
As a current trader in the business, I can assure you current market conditions are very difficult. Even though I don't work at Getco, models and strategies that have worked extremely well in the past are being slammed as more algos designed specifically to fight other algos are released. Obviously there are people out there who are still successful in this environment but it requires ingenuity, willingness to try new things, and luck.
This is true, and although I do not work at Getco I'm sure they are going through some of this
arden what's your point? no credibility atm
recruiting not only fits with expansion but also with collapse ie ppl rush for exits, they need to hire to replace (albeit hire fewer n00bs)
also, yes this is a theme for many HFT/algo firms this year. while it remains to be seen whether things will turn around, i can confirm from a reliable source that some big MM'ing players have withdrawn from significant markets this year for similar reasons (tighter spreads, too much competition etc)
Getco Disclosure (Originally Posted: 02/15/2013)
Getco revealed its financials on Wednesday before its future purchase of Knight Capital Group. It looks like they've been struggling maintain their peak revenues of 2008 crisis, mainly because of the decrease in trading volume and the increasing competition. They seem optimistic about the future, though, especially concerning new markets and products. Question being how much they can benefit from a macro-based bull market ?
Here are some of their numbers :
There's more in this DealBook article, for example.
i guess i knew they werent huge but i never realized they were that small
Yeah, maybe they aren't the holy grail that everyone makes them out to be anymore
They can probably get something decent out of their Knight deal. The competition is crazy though.
The big money in options is in retail flow. Knight had this. The other companies that were interested in it, were backed financially by a company that was linked to the US gun industry. It fell apart in the sandy hook aftermath,. They lost their funding and Getco sailed home.
Source: Insider.
"Profit went down 82% from $139 million to $25 million."
Clear BSDs...
Maybe not anymore, but these guys used to be serious BSDs. Dealbreaker's article at 2013/02/getco-hoping-that-acquiring-knight-capital-will-bring-back-some-of-the-excitement-of-its-glory-days/ compares Getco's historical per-employee revenue and compensation to that of Goldman Sachs.
From what I hear, Getco was strong when it started up because it was one of the first firms to prioritize using speed to win. Unfortunately, the speed game is reaching a limit and other firms are catching up, and they're not coming up with new innovative technologies/ideas anymore.
Their last innovative idea being "let's relocate closer to the exchange."
IMO trading of the future will be who can use snaps the best.
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