HFT Compensation
What does trader / algo. dev. compensation at a top HFT firm such as Hudson River look like 5 years out?
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15% of your pnl. Depending on your trading style / product, this can range from 100k to 10MM. No hard figures here.
I would be very surprised if the base salary at HRT was 100k or less. CONDITIONAL on still being employed there after 5 years and not being fired almost everyone is probably making at least 200-300k. 67MM pnl for one trader with 5 years experience would also be an extreme outlier.
Conditional on still being employed after five years, what do you think median comp would be like? What about 10 years out?
I really don't have a good sense about HRT. Also a lot depends on how well HRT (or any other firm you join) does over the next 5-10 years which is obviously very hard to predict. For example in 2008 GETCO spent 319MM on compensation while having only 189 employees at year end while in the first nine months of 2012 (before the Knight merger) 409 employees got 114MM in compensation (~150MM when annualized). Link to their financial results is here http://dealbook.nytimes.com/2013/02/13/in-first-disclosure-getco-reveal…. Not really sure what the take away is other than hope your firm does well.
10MM was a bit exaggerated if you aren't a partner, but my point was that prop trading firms have a clear compensation metric called PnL. You can get screwed over your bonus by a BB if you work in trading, but not so much by a principal trading firm. Also prop traders 5yrs out don't really look at base comp. Who gives a fuck if base is 60 to 160, if your USP is PnL.
I work at a prop firm (not HRT) and am aware of what pnl is. Some firms have individual pnls while others only assign pnl on a team or firm level. I think this is more common at more quantitative firms where it's hard for someone to be a really good developer, researcher, and trader and there is more job segmentation. I largely agree re base salary other than it's a lower bound.
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