Maybe now is not the time to work in high frequency trading (HFT). Low market volatility has crippled some larger players, while larger rivals have swooped in for their struggling competitors. Virtu’s $1.4bn takeover of HFT giant KCG Holdings in April is indicative of the problems facing the sector, DRW Holdings, one of the world’s largest HFTs, agreed in August to buy RGM Advisors, while prop trading firm Sun Trading has also put itself up for sale this year. Many HFTs are expanding into new territory – including cryptocurrencies – in a bid to revive their fortunes.
HFT firms remain something of an enigma, however, despite the spotlight shone on the sector by Michael Lewis’ book Flashboys. Even big firms fly under the radar and while rumours abound about traders being scooped up from investment banks and hedge funds – and large pay packets – little data is really available. Through conversations with specialist recruiters, looking at the careers centres of major HFT firms and analysing the available financial data, we’re able to give you an idea of the jobs and pay on offer currently. Please note, this is not a ranking…
1. Virtu/KCG
Who? In April, Virtu Financial completed its takeover of $1.4bn takeover of rival HFT KCG Holdings. KCG was a relative giant in HFT firms – with close to 1,000 employees globally – and former employees have already been flooding out of the combined unit since the deal in April. Virtu had 148 employees at the end of last year, according to its 2016 annual report released in March.
Hiring? Much of the focus at Virtu since the merger has been on working out where the overlaps are, which has inevitably resulted in some senior exits. As we’ve reported variously since April, senior KCG staff have been departing and many have found new positions. Hedge fund Two Sigma has taken on Ilya Ustilovsky, its head of ETF quant research, Mike Blum, KCG’s chief technology officer, has been hired by Goldman Sachs as a partner and CTO for its electronic trading unit. Robert Crane, its head of electronic execution, has joined HSBC as global head of cash execution, and Graham Wayne, KCG’s head of EU electronic trading, has signed up to Barclays. But the cuts have been deep – at least 60 people have gone in London since April, and insiders suggest that up to 70% of headcount is likely to go in the UK. Right now, Virtu has 19 open jobs globally (including internships) and the bulk (eight) are in technology.
Pay? Virtu spent $85.3m on compensation costs in 2016, or an average payment of $575.6k. The only available figures for KCG Holdings were for its European operation, which paid an average of $251k in 2016, down from $391k a year earlier.
2. Sun Trading
Who? Tech-focused prop trading firm that includes HFT among its trading strategies, which is also reportedly on the market for sale having struggled in the low volatility environment. It has around 100 employees in the US across New York and Chicago and 26 people in London.
Hiring? No. It has two open roles globally – a junior quant trader in New York and a market data engineer in London.
Pay? Compensation has been sliding at Sun Trading’s UK operation (the only available figures) and was an average of $241k (£189k) per head in 2016, down 8% on one year earlier and from a $380k average in 2014.
4. Jump Trading
Who? It has around 350 employees across its offices in Chicago (HQ), New York, London and Singapore. Likes to keep a low profile and rarely (if ever) ventures out into public, but was established 15 years ago and has been gradually becoming one of the biggest HFT players and top firms on the Chicago Mercantile Exchange.
Hiring? Jump has been expanding fairly rapidly over the past few years and at this point last year was hiring 60 additional people. In the UK last year, headcount increased by 45%, according to its latest accounts. Right now, it’s more subdued, but still appears to be recruiting. It has 28 open roles across all of its offices, with Chicago boasting the bulk of the roles. It’s hiring graduates, but also data scientists, quant traders and a whole host of software engineering roles.
Pay? This is only available for its European operation, where profits fell from $39.6m in 2015 to $27.2m last year. It has 68 employees in London (up from 49 in 2015). Jump said that it made “significant investment in personnel” last year, and this has resulted in some big staff costs. It spent $75.7m on its employees last year – or an average pay packet of $1.1m.
4. Tower Research Capital
Who? Founded in 1998 by former Credit Suisse prop trader Mark Gorton, Tower Research Capital is a HFT firm comprised of engineers, physicists and computer science graduates. It has around 300 employees worldwide, including within its European subsidiary Spire (Europe).
Hiring? Yes. It has 51 open roles currently, although a large proportion (22) are based out of its Indian office in Gurgaon. However, there are a healthy number of quant trading, software development roles and graduate opportunities across London, Chicago and Singapore. It’s European arm increased headcount by 24% last year, and now has 102 employees.
Pay? The only available figures are for its European arm, where pay averaged out at $660k in 2016, down from $783.9k in 2015.
5. Tradebot Systems
Who? Based in Kansas City and predominantly focused on US and Canadian stock markets, Tradebot was thrust into the headlines for being the only HFT named in the Barclays’ ‘dark pool’ saga in 2014. It accounts for 5% of total trading volumes in the US stock market and trades 5,000 companies each month, according to its website. There are only around 60 staff.
Hiring? Tradebot has ten openings, primarily in software development, but also for equity traders and quants.
Pay? It only pays traders $50k-100k as a base salary, depending on experience, but points out that the ‘big money’ is made through its annual bonus scheme. This is, of course, connected to personal performance.
6. XR Trading
Who? A Chicago-based HFT that has trading teams focused on seven asset classes including agricultural products, equities, FX and metals. Has offices in London, Chicago and Sydney.
Hiring? Yes, relative to its size XR is expanding. Its latest results suggest that it had 12 employees in London last year – four more than in 2015 – but it currently has just one job in the City, for an experienced traders. It has the 10 roles in its Chicago office, but these are primary software development.
Pay? The only available figures are for its London operation, which has just eight listed employees. It paid them an average of $289.7k last year, down from $383.9k in 2015.
7. DRW Trading
Who? Big player in the HFT with around 500 employees globally. It’s based in Chicago, but has offices in London, Montreal, New York, San Francisco and Singapore. Profits at its London arm surged from £4.5m in 2015 to £11.3m for the year to March 2016, according to accounts released this month.
Hiring? Yes. It has 29 open roles globally – 21 of which are in technology and one of which is in trading. However, it had 32 employees in London last year, according to accounts released in October, which is down from 37 people in 2015.
Pay? New accounts for 2016 suggest that its 32 London employees received an average payout of $301.8k.
8. GSA Capital Partners
Who? Straddles the divide between quant hedge fund and HFT firm, GSA has a trendy office overlooking London’s Green Park. It manages money for clients, and profits in 2016 (the latest available accounts) were £130.8m ($170.9m).
Hiring? It has 19 partners in London, according to its latest accounts. It has an open call for interested parties on its careers page, but no advertised vacancies. It’s not easy to get in – just 25 people have been hired out of 10,000 applicants since 2010. It’s headcount across the group is 102, up from 99 in 2015.
Pay? Its 19 partners earned an average of £6.9m ($8.8m) in 2016, but across the group its employees were paid an average of £198k ($258k).
9. Two Sigma International
Who? A tech-driven HFT firm that claims to have been using Big Data in its trading strategies before it became fashionable. Founded in 2001 and currently headquartered in New York with offices in London, Houston and Hong Kong. It has over 1,100 employees globally and its offices are Uber-trendy – it even has its own music recording studio for its employees and throws parties that it calls fiestas.
Hiring? Very much so. It currently has 82 roles globally across portfolio management, trading, tech and support. In the UK, it has 21 employees, but this is a 50% increase on the previous year.
Pay? Again, the only figures are for its London operation, where pay averaged £309.1k ($406k) per head, up slightly from an average of £306.7k in 2015. Reports suggest that ‘math nerds’ in the U.S. start on $550k at Two Sigma, however.
10. Allston Trading
Who? Boasts its casual office attire and “weekly shoulder massages” as benefits on its website. Allston was founded in 2002 by a trio of CME futures traders. It has ceased trading on US stock markets to focus purely on more profitable derivatives markets. Has around 125 employees.
Hiring? Not really. Has a four open roles – two for traders, one DevOps engineer and a “general application”.
Pay? No data
11. IMC
Who? Headquartered in the Netherlands and surely one of the oldest HFTs, having been founded in 1989. It has 500 employees across Amsterdam, Chicago, Sydney, New York and Hong Kong and Zug.
Hiring? To an extent. It has 27 roles across Amsterdam, Chicago and Sydney, primarily trading and a range of engineering and development positions. There are also intern and graduate opportunities. IMC says in its latest annual that it hired an additional 100 people last year, and increased headcount in its technology team by 20%.
Pay? No official figures, but Glassdoor suggests that junior traders bring in $80k and options traders earn $95k. Trading interns earn $6.2k a month. Software engineers supposedly earn $107k. Perhaps it’s all in the bonus. IMC’s annual report said that it paid its employees €89.3m ($104.3m) in bonuses last year and that 17 people earned variable compensation of more than €1m.
12. Hudson River Trading
Who? Another firm that claims to account for 5% of all stocks traded in the US. It has around 100 employees worldwide across offices in Austin, London, New York and Singapore, 25 of which are algorithmic traders. The rest work on writing software and other middle and back office roles. Hudson River is reportedly in talks to buy Sun Trading.
Hiring? Somewhat. It has around 15 jobs globally, including graduate roles.
Pay? Its London operation paid out an average of £470.9k ($615k) its 12 employees last year, which is broadly in line with 2015.
13. Spot Trading
Who? Has around 100 employees across technology, equity research, quant and trading functions within its Chicago HQ. Claims to operate a meritocracy where all employees are rewarded for the performance of the firm, rather than compensated on individual performance.
Hiring? No. Currently no job openings.
Pay? No data
14. Chicago Trading Company
Who? Founded in 1995, Chicago Trading Company (CTC) evolved from an open outcry firm into one staffed by quants and traders supported by a technologists. It primarily focuses on the derivatives market.
Hiring? Not much – it currently has seven roles, all of which are in technology.
Pay? Glassdoor suggests that it pays its traders salaries of $119k, although the bonus is likely to be substantially more, and that software developers earn $110.2k.
Contact for news, tips and comments: pclarke@efinancialcareers.com
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