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They are sometimes confused as to how to go about applying for roles and are unaware of the technical skills necessary to obtain a job.
I've written this article to explain what HFT is, what type of skills are required to get hired and who to approach when looking for a career. Be aware that HFT is an extremely technical discipline and it attracts the very best candidates from the fields of mathematics, physics, computer science and electronic engineering, often at the grad school level or with years of industry expertise in a niche area.
Obtaining a role in an HFT firm, while often highly lucrative, will take a significant investment in terms of study and effort. The term 'HFT' covers a wide range of activities in algorithmic trading. For the purposes of this article it means executing trades at extremely high volumes over extremely low latencies.
In fact, the "bleeding edge" of the top HFT firms measures trade latencies on the sub-microsecond scale. This latency is only set to decrease as more sophisticated customised hardware becomes available.
HFT is an extremely secretive discipline. It is very hard to find out information about how HFT firms operate. Job postings, vendor marketing pages and the odd internet article do provide some insight, however. It is highly technically driven and extremely quantitative.
There is almost no discretionary input once an algorithm has been deployed until it becomes unprofitable! It is also a very competitive and often-times disheartening environment. Months of research can be thrown away in a day if an exchange modifies its architecture, a new regulatory environment surfaces or a competitor is able to exploit a process at a rate faster than you are.
For this reason it suits highly technical, disciplined individuals who crave autonomy and a collegiate environment of extremely capable people, while acting under a decent amount of pressure.
This means they possess a strong entrepreneurial culture and a meritocratic mindset. Any HFT firm will be questioning what you as a candidate can bring to the table that doesn't already exist in the firm.
Given that the bonus pool is shared by many employees albeit in a weighted manner! This means you need to possess a set of unique skills that the firm doesn't currently include, in order to even be considered for a role. The flip-side to this process is that often you will be able to "create your own role" within the firm.
The firm might not even be hiring, but if they feel that your skills in a particular area are strong enough they may create a position for you. The meritocratic approach of HFT firms usually allows significant autonomy in your projects.
Thus if you wish to work with extremely smart and capable individuals, in a self-starting environment, then HFT is probably for you. Such roles often come with longer hours than many might be used to. The fast-pace, intellectual stimulation and compensation generally outweigh the workload, however.
This may or may not suit your desired lifestyle! There are a few paths into HFT, but most of them require extensive technical skills in one or more of the following hard sciences such as mathematics, physics, computer science or electronic engineering. Individuals often join HFT firms via:. One common misconception is that it is a hard requirement to possess an extensive background in finance to apply for HFT roles.
Most HFT firms are actually indifferent to your knowledge of finance, assuming that you have extensive technical expertise elsewhere that they can make use of.
The roles at an HFT firm are quite diverse. Nearly everybody in the firm will have a highly technical background and will be capable of independent research in that field i. Since HFT is essentially a "technology sport" many will have backgrounds in computer science and electronic engineering or low-latency expertise from backgrounds in other industries such as telecoms.
Essentially, any skill that can in some fashion reduce the latency of the trade lifecycle or increase execution speed of algorithmic calculations will be found in HFT. Examples of such expertise includes:. As can be seen, these skills are often deeply technical and require either a grad school level of involvement or years of industry expertise in certain technologies.
If your skillset intersects with any of the above areas then you should find that you'll be able to score some interviews with HFT firms. As with most quantitative roles in finance the best way to gain a job is through recruitment agencies. The good recruiters are often relatively well-versed in the domain and will be able to advise you as to whether your background is suitable. Be aware though that the bar is set rather high! You will likely have to work hard to find a role and it could take some time.
While direct application to such firms is possible, the tricky part is figuring out which firms actually take part in HFT! Often, if you are well-known in your particular technical niche, the firms will try and recruit you directly. If you have any questions about HFT or quant careers in general, feel free to email me at mike quantstart. You'll get instant access to a free part email course packed with hints and tips to help you get started in quantitative trading!
Paths into HFT There are a few paths into HFT, but most of them require extensive technical skills in one or more of the following hard sciences such as mathematics, physics, computer science or electronic engineering. Individuals often join HFT firms via: Thus if you are really set on a career in HFT, then carrying out research into low-latency systems is likely to be a good way in.
It is also not unheard of for the best undergraduates to be hand-picked from the top technical schools MIT, Stanford, Cambridge, Imperial and then "trained up" on the job. Industrial Expertise - Experts in a particular low-latency industry such as telecoms are often brought in for their particular domain knowledge. Although, generally in order to function well in the initial domain these individuals have a deep technical background usually academic anyway.
Scientists working on High-Performance Computing projects such as the data centre at CERN or other national super-computing laboratories are also highly sought after, by virtue of their "big data" experience. Financial Exchange Experience - Any individuals with insight into the inner workings of the exchanges being traded on will be highly sought after as they are likely to be able to help carry out research into new algorithms that can make use of the exchange architecture.
Examples of such expertise includes: Exchange Architecture - Extensive knowledge of how trading exchanges operate is a common skill found among high frequency traders. Being aware of how the order book operates, as well as the intricacies of the technology stack in a particular exchange can put you at a distinct advantage.
Processor Design - HFT involves substantial volumes of calculations over an extremely short time scale. Being aware of any means of advancing the execution speed of these processes will be advantageous. Deep experience with hardware and processor design, especially on systems other than commodity x86 hardware alternatives such as GPUs and FPGAs is useful. Low-Latency Networking - A large part of the trade lifecycle latency comes from the networking stack. Experience optimising packet processing, writing custom networking modules or use of Infiniband switched fabric networks is also attractive.
Kernal Optimisation - The common theme among these requirements is reduction in latency and increase in execution speed.
Thus it is now commonplace to rewrite parts of the software kernal in order to gain a speedup. Experience in Linux kernal modification is beneficial to many HFT firms.
These often consist of "rolling" calculations for means, variances and linear regressions. Thus any prior history of high-throughput time series analysis expertise is beneficial. Extensive experience in any of these languages and parallel processing will be attractive to certain firms.
Looking for a Job As with most quantitative roles in finance the best way to gain a job is through recruitment agencies. Just Getting Started with Quantitative Trading? Quant Trading Lessons You'll get instant access to a free part email course packed with hints and tips to help you get started in quantitative trading! No Spam Real, actionable quant trading tips with no nonsense.More...