Moving from trading into IT. Reasonable or stupid?

realtaco's picture
Rank: Monkey | 32

Hey,

I'm am VP trader working in one of the mid-tier banks in London.

I'm not very happy with my current role anymore, so looking to move on. Initially I was looking for other trading roles, but much to my surprise, I didn't find much. It feels like there are very, very few roles out there.

To make things worse, it feels like as a VP already, it's hard to move into a different trading area - in spite of having a really good CV & an exceptionally good P&L history to show for!
But understandably, seems like most roles require experience trading that particular product, so I feel like I'm already pigeonholed into trading my particular product.

So after having been on the hunt for a few months, it feels to that what was more of an abstract fear in the past ("trading is going to disappear, e-trading will take over!") has really swiped away most jobs by now; and the few that remain are almost impossible to get, unless you have traded that particular product X before. This is really bad right now already, but I'm afraid it'll only get worse from here; e-trading will continue to grow, and each year of more seniority will make switching areas even harder.

That's why I've recently been contemplating going into IT, development specifically. I have a few offers from good buy-side names for such roles.
The downside is that the salary of these is significantly lower than what I currently make. And most development roles seem to be in a similar area, financially - though there are a few out there that do pay extremely well, on par (if not better than) trading, though it's hard to plan how realistic it may be to get one of these in the future.

The upside is that, well .. tech will keep growing. It's very interesting & challenging. It's a lot more stable. And as someone with knowledge of markets/trading and IT both, I might be in a good position in terms of career development.

I'm strongly leaning towards taking on such a role, but the outlook of a 20-60% pay cut today (who knows about the future) is of course a big mental hurdle.

So just wanted to hear the opinion of fellow traders .. am I being an idiot here, giving up a more or less well paid role (though with very unclear future) to go into tech? Or would you agree that taking that cut today might still be the smarter choice, given where trading as such is heading towards?

Comments (32)

May 6, 2018

See my thread, I'm pretty bearish on this whole trading crap myself but not sure if we have the same motivations

What do you trade though? Why aren't you happy? If you have a good trading pl shouldn't you be living the high life or going to a hedge fund and making the ka-ching ka-ching? I might not have the answer but I think the background will be useful to know

May 6, 2018

I'm trading delta1 rates products.
So product-wise, extremely simply - which just increases the whole electronification issue.
The (moderate) complexity of the role is based on the underlying market segment rather than product kind, also lots of very illiquid stuff. That business is very sell side-specific however, nothing you could really bring over to a hedge fund or such, unfortunately.

Quite a few reasons why I want to move on. First of all, my job has become 75% inner-company political fights, 25% trading - annoying as f.ck. Paid insultingly badly last year as well in spite of the P&L (though still better than the tech roles I'm currently looking at). And lastly, I've just become fairly bored of the role - I like fairly technical stuff (be it maths or IT work), and the scope to do such things is just very limited, given the product.

May 6, 2018

Why do they hire technical people for simple products?

May 6, 2018

Can you take it easy at work for a little and build up your tech skills to the point where you're able to not take a 20-60% decrease in pay? I think that Google has an explicit "high compensation plan" to help with this.

May 6, 2018

Thanks! That might be an option indeed.

It's more or less what I've been doing anyways actually, and I think my tech skills right now are at a point where it's becoming relatively hard to improve, without actually working in a professional tech environment. Stupid example, but take HFT systems development - super interesting, but not a clue how you could even approach that privately. Sure you can look into some general low latency techniques, but for hands-on specifics, I'd imagine you need to be in an environment where you actually have the infrastructure for that etc.

Aside from that, I'm not sure whether it would be smarter to make to move now, learn a lot (and pay aside, some of the offers I have now I think may be GREAT learning opportunities), and more or less gamble that will open up more profitable roles in the future.

Or wait longer until you find a job that matches my salary. But from my talks with headhunters & just browsing around etc., those roles exist, but aren't plentiful - and truth be told, I'm not sure if time is on my side. I'm very confident in my coding skills, but for companies just looking at CVs, it's always an unknown of course.. "there's this guy applying, he demands an exceptionally high salary and in contrast to all other candidates, doesn't have the same professional experience in dev roles" .. if it's not a role where my trading experience is a big selling point, then it's certainly hard to argue

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May 6, 2018

Hmm.. What is your background? How much programming can you do?

I've reached my PM limit, can you PM me?

May 6, 2018

Thanks - unfortunately I just signed up today, so I'd have to wait 2 days to PM.

I studied finance (with some focus on the more quant'sy side, though not PhD level) both under- & postgrad, but have been programming... more or less for most of my life. Have applied to 3 of the large/very techy hedge funds and have passed all their plethora of technical tests, coding challenges and what not with very good feedback - so think my programming skills should be fine for such a move. Of course there'll still be plenty of topics to brush up on more as it's a bit hard to do without a proper role - e.g. extremely low latency stuff, highly distributed systems etc.

Mainly using C# at the moment, though more or less comfortable with most higher level languages (the likes of java, python), RDBMs etc.

May 6, 2018

Ok. Check back with me in a bit. I've got some people I think I can point you towards who left for tech.

Tbh, finance" programming" as in the FO is trash. If you were a quant and can quickly transition to tech style coding standards, you would have been in SF now.

Banks are investing in alot in etrading in rates, have you tried transitioning to that team? If you have rates experience and like rates+tech, it's a shame not to leverage that into your next role.

Furthermore, can you do OOP and OS with algos? Fundamental SWE is differently from trading style coding. Were you also a STEM major?

May 6, 2018

I would recommend you go into data science. not IT (what you are really describing is tech support)

It will keep you stimulated, and is a pretty automation-proof gig.

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May 6, 2018

I agree with @imsurance, I would recommend checking out data science roles. There are a plethora of technical roles that you can go into where you can utilise both your commercial mindset and technical skillset. I recommend checking out the following roles:
- General data analytics role
- Data visualisations (although this tends to be a lot more javascript orientated but you can find roles that have python or R projects)
- Advertising analytics (lots of cool statistics based in this role - you can have a read of general trends in the industry via this article https://blog.stackadapt.com/what-is-data-science-a...) - [wild card] sports betting companies utilise a lot of data analytics (the UK allows sports betting but the US is pretty strict on it)

Also, have you considered a role as a product manager at a tech firm? The role of a product manager entails working closely with developers to ensure that the product that they are working on is going to plan and the product that they are delivering is of a high standard. It's a highly sought after job and with your real world business experience (i.e. working with devs by going through code and dealing with general IT issues), I reckon you have a good standing in that kind of role. For the most part, tech firms have a solid demand for product managers and places like FB and Google have incredible perks. That being said, the role is significantly less technical than a straight up dev or data science role.

And since we are on the subject of programming, I highly recommend getting comfortable with Python. This is because Python is the Lingua Franca of the tech world. I recommend going through some Jupyter notebooks about Python programming to get comfortable with Python (this is a decent basic tutorial - https://www.dataquest.io/blog/jupyter-notebook-tut...). I also recommend checking out the functional programming paradigm, although you do not necessarily have to programme in a FP style, you will be introduced to invaluable concepts such as higher order functions, currying functions, side-effect free computations, typed functions, etc. Another you can do to keep up-to-date with the tech landscape is to checkout the latest posts on the HackerNews website, its a great resource to check out the latest and greatest and you might want to checkout the dedicated jobs page embedded onto the site for tech-related roles.

May 7, 2018

Thanks, appreciate your input!

Data Science in general is definitely interesting; I've come accross a few roles in the quantitative research departments (trade signal analysis etc.), though always had the impression those were very much aiming for the PhD crowd.

Outside of finance and the big silicon valley guys, I'd assume the pay cut for such roles would be even larger though? If I recall right, I saw a bunch of data analytics roles in the 40-65k GBP region or such; that would be a bit of a very hefty cut if true.

Product management isn't anything I've checked out so far to be honest. Sounds like something worth exploring as well tho, will definitely have a look around!

May 7, 2018

I highly recommend this piece written by Mark Joshi, who is a quant and has a tonne of real world experience - http://www.markjoshi.com/downloads/advice.pdf
As mentioned in that article there are 6 types of quants found in finance. As far as I know, Quant Research definitely requires a PhD but of the 6 I reckon you would be suitable for a desk quant/strat, quant developer and statistical arbitrage roles. These roles are not as theoretical as a quant research role and therefore do not require the academic dexterity that a PhD can offer yet they do require strong commercial knowledge and strong work ethic - both of which can be exhibited by the fact that you are a VP trader. So I recommend you doing some further research to see if anyone those roles align with your personal interests.

Regarding roles outside of finance and big tech, the reality is that there will be a large pay-cut.

In terms of the product management front, check out this article from TNW as it gives a great insight into the life of a product manager - https://thenextweb.com/entrepreneur/2015/01/31/day...

May 7, 2018

I'm at associate level, if anything I've been hoping someone higher up could give me some clarity but here's my take.

I'd make the jump absent any better opportunities. Frankly I'm a bit jealous, sounds like a big quant fund and you know your shit. I think it'll open up much more opportunities for you, you could switch to tech with an actual formal development background, you can try to find other buyside trading roles, or you could go back to a sell-side e-trading desk.

The only downside seems to be the pay your giving up but I think that could be illusive. I don't know actual circumstances but seems like the pl your making is mostly due to the banks franchise, even if you are adding additional value you prob won't be too hard to replace if something goes wrong, and by that time there might not be as many roles available out there. Would also be harder to make the jump to something like this. I think you can punch some numbers in excel and estimate the opportunity cost and weigh it up with the potential upside. Pay forgone if anything will be more of an insurance premium for your career.

I'm quite impressed that your technically sound enough to get the role and capable of doing the hard core stuff (low latency memory bus, whatever that is). The most complicated stuff I've done on the desk is build a optimizer for our equity vol surface using differential evolution on the exotics trading desk but I would love to work in a dev role. I'm reasonably confident in my coding abilities but like you said some things are hard to learn without actually being in a dev role.

You seem smart, I would play to your strengths rather than stick to something thats potentially replaceable

May 10, 2018

Thanks!
Was almost expecting to hear a lot of people say "don't give up your salary you idiot!", to be honest - quite surprising and definitely reassuring to hear so many agree it may be a good move to do

May 9, 2018

A bit of a rant here and I hate to sound negative but I feel compelled to write.

Realtaco - you must be a seriously bright and hardworking fellow. You made it to VP level front office, have tech skills beyond 95+% of the general population, and have a masters. You understand how financial products work and the ecosystem of capital markets.

WHY IN THE FUCKING NAME OF GOD ARE YOU BEING FORCED TO LOOK AT JOBS THAT PAY LITTLE MORE THAN A GARBAGEMAN?

WTF? Why did we go into this business? TO MAKE FUCKING MONEY.

I live in NYC...the fucking guy who collects tickets on the LIRR makes like $120k....Why are jobs that require deep tech and financial knowledge paying less than that? Seriously...WTF?

In any sane world you are a $250k+USD person all day every day. Literally nothing in this world makes sense anymore....

End of rant.

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May 9, 2018

Dude, calm the fuck down. There are well paying tech gigs.

May 10, 2018

Ha, well. Let's be honest, the qualifications of a job aren't really that correlated to pay. I'd almost say "unfortunately", but then again I really wouldn't want to compare my salar with a CERN physicists that way ;)

Anecdote though: After my MSc I got an offer for an incredibly skilled job, highly quantitative, would have been one of the very few people in the company without a PhD. Not sure how I even got an offer, but that's a different topic..! By far the most qualified role I could have ever taken. BUT, the salary was seriously terrible. As in, half of what the (let's be honest, much much less demanding) grad role in a bank paid.

Best Response
May 9, 2018

Silly question - you know the answer yourself.

You are doing a job where you will be let go in 2-5 years potentially. Maybe you'll make it an extra 10 years and average $500k so $5m with a probability of 25% so $1.25m weighted average gains.

You are a VP so likely in your early 30s and have 30 years left of work, let's say you average $200k over that time, that's $6m with job safety. Do you take the wild gamble of $1.25m or the safe $6m with the potential of being a lot higher? (I don't count you being let go and finding another job, the more you age the more likely it is not to happen).

20-60% pay cut? I took a 65.5% pay cut, spent 2 years of lost earnings and MBA money, and a drop in seniority (used to head a team). I now make models as an associate working in PE and my peers are all 3-5 years younger. Regardless, I know I won't be a useless equity derivs guy and I'll have the necessary skills to have a long career. I knew all of that going in and didn't need any confirmation to see the writing on the wall of automation in my job...

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May 9, 2018

https://www.ft.com/content/67e48ae4-4fab-11e8-9471...
Interesting read

Would be interesting to hear someones perspective who works with syndicate

May 10, 2018
Comment
May 10, 2018