Difference of Job Role Between Trader and Developer in Algo Trading?
I'm a bit new to the entire algorithmic trading scene and I wanted to know if there is a major difference between these two roles other than what I think below:
The trader - who looks at market trends and researches the markets
The developer - who actually writes the code for the algorithms
OR are the above people actually one job altogether and the developer needs to know both trading and coding, or vice versa?
Also, if they are separate roles, which one pays more? And is it possible to do both?
Thanks.
If the job is listed as a developer, rather than a quant or trader, then it is generally not an alpha generating role. You work with a trader or quant or team of traders and quants to program and optimize a strategy.
Pay is dependent on many things. Developers tend to have higher salaries and more job security. Traders have much higher upside potential income wise due to the fact that they are in an alpha generating / risk taking role.
With that said, if it is algorithmic and high frequency trading, most traders will at least have a general understanding of some programming languages and their limitations/features and most developers will understand a bit about the strategy, the marketplace, etc.
trader tells developer what to build (but doesnt know how to build it), developer builds it, adding his own insight. Trader trades it. Knowing what the other can do is very important in doing either role. Not many traders can code, not many coders can trade. If you overlap (i do) you're a rarity.
Can anyone further elaborate on the pay for developers on an algo trading desk? Also, what are the exit opps like?
Thanks
Best Path to Algo-Trader - Developer vs Junior Trader? (Originally Posted: 07/18/2014)
I'm a developer intern at a prop shop and my goal is to work as an algorithmic trader. For next summer I'm wondering if it would be better to work as a developer again or to apply for a junior trader role on a (most-likely) non-algo desk. Which path is better for algorithmic trading? I certainly do not want to be a pure developer 10 years down the line but I can put up with a few years of it if it can lead me closer to my ideal position. What if the developer position were Citadel's FTAP?
As a developer I would receive better pay, better hours, and may get to work on an algo-desk right out of college. On the downside I may be stuck doing projects that teach me nothing directly about trading.
As a junior trader I would take a pay cut and would probably work on a non-algo desk, but the experience is trading related.
I'm also aware of entry-level roles like Jump Trading's Algorithmic Trader Intern, but I'm trying to expand my options because of the immense competition for that role.
It really depends on what your current developer role entails and what you are looking for. If you want to develop the trading strategies (which is more fun and interesting in my opinion), definitely look into working as a quantitative strategist type position. From my experience, most of our developers mainly work on building tools for the traders as well as coding up the trading logic and strategies the quants produce into c++. Every firm does things differently, but from what I've seen working as developer is a steadier position, but not nearly as fun as building out strategies. The downside of being a quant researcher is that finding winning strategies is very difficult. It essentially boils down to whether you want to be coding up the algo strategies or testing and designing them, each route tends to pay pretty well.
Similar situation here. My end goal is to work as an algo developer/trader. Right now I have offers for a Citadel FTAP-like position and S&T at a BB. I'm leaning more towards the dev role. Could I eventually transition better (compared to pure S&T) to HRT / Tower as an algo dev?
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