NCWoods, Don't waste your time and money pursuing a dead career. Trust me, you'll thank me later for giving you this advice. Your odds of being able to code for a living is very slim. High tech field has been completely taken over by foreign H1B workers. American software engineers with masters and PHDs from MIT/Stanford are getting laid off and replaced by young foreign workers. If C++ coders with 15+ years experience can't find jobs, what makes you think you can do it?
Interesting point lemeeplay. It's true that many foreign programmers are replacing most of the domestic ones. So if a quantitative finance master's won't help to get into HFT, whats the difference in the quant degree over a general MBA? What jobs does the quant finance masters prepare you for that the MBA doesn't?
cosine was making very pertinent points for your benefit. Knowing what the problem is is very important. HFT is done for a set of reasons. The HFT happens among a set of players. Often decision makers do what they do because they do not know how to deal with what is going on. HFT is THE classic example nowadays. HFT like PA trading is a workaround for not knowing the workings of markets. Preparation for the other topic, making money trading markets, can be done in a formal education context. My vote goes for two places: electrical engineering (communications and HF opitions) and what is now known as game theory. In the past it centered on the activities of ISAGA before formal education got organized. What a thrilling few decades those were. Computers finally got enough capacity to eliminate critical thinking and computer science and physics filled the former niche. Latency never became a workaround for critical thinking.
"Interesting point lemeeplay. It's true that many foreign programmers are replacing most of the domestic ones. So if a quantitative finance master's won't help to get into HFT, whats the difference in the quant degree over a general MBA? What jobs does the quant finance masters prepare you for that the MBA doesn't?" To tell you the truth, not many. An MBA is still the prefered degree when it comes to doing front office business as it helps you develop your contact network in the financial markets. A PhD is still prefered for risk management, pricing and desk quant type of jobs. The financial engineering degree is not bad as it is skewed towards technical content, but the real issue is that innovation is so rapid (at least it used to be) in the financial markets that real new products are not developed by financial engineering graduates but by PhDs, as the problems to be solved require a much more general background than knowing how to solve a few basic PDEs. Plus it doesn't cost more to a bank to hire a PhD rather than an MS. It doesn't need tons of them, just a few to design and develop hedging and pricing methods for new products, given the demand from the sales guys.
MBA, Master in Finance for HFT ? Before you spend years getting the right education, why don't you spend some USD for this here : http://www.rtsgroup.net/trading/algorithmic-traders.html Rapid Strategy Deployment RTD Tango removes complexity by enabling users to build their own framework without in-depth programming knowledge. Using a proprietary language based on an Excel macro language, enriched with hundreds of vital trading components as well as a syntactical check of strategy code, traders and programmers alike can reduce the time to market for their trading strategies. Execution Speed RTS Tango is a client-server-based application that is fully integrated into RTSâs infrastructure. The integration of the RTS infrastructure minimizes internal latency for market data and execution to the low sub-milliseconds.Order processing and performance are dynamically improved to respond to high-speed, sensitive trading styles. http://www.rtsgroup.net/trading/algorithmic-traders/rtd-tango.html Have fun reading.
My answer to you is forget it. Its a fad... Yes yes there are some cleaning house, but this is a fad until the efficiencies are wringed out. I worked an investment bank and was in the same team as those writing market making and high speed trading systems. I myself worked on the risk of the OTC products. What I saw was an arms race. This means at the end of the day what will work is the faster gun. That means more and more money for infrastructure until the cost of the infrastructure outweighs the profits of the trading system.
'Same team' meaning... ? OTC product risk sounds pretty far away from HFT system design to me. In what kind of bank is that done 'in the same team' ? One is middle office, the other is front office, one is risk, the other is programming, one is custom made products, the other is exchange traded. Skill sets are not even close to be similar. So how exactly does your experience as an OTC products risk manager entitle you to say that high frequency trading is a fad? Here's some news for you buddy: everything in an investment bank is an arms race, and investment banks always invest more and more in business segments until the marginal profit is driven to zero. In fact, all businesses do that. Revise your econ 101. Banks will invest in infrastructure to provide cheaper liquidity and faster price discovery to long term investors, triggering technological innovation, amortizing the cost of high-end computer systems and network infrastructure. They will do so until, it is true, the marginal profit of doing so converges to zero. Yet this is far from meaning that the total profit generated by HFT will converge to zero. The total profit will be *maximized*, and as with any maximum, the first derivative is... zero. Meanwhile, long term investors will be able to trade higher volumes in response to new information affecting the value of securities, resulting in more efficient markets in the long run. Capital will be allocated more efficiently across firms and governments. You'll pay less taxes, and your hamburger at McDonalds will be cheaper. That's not a fad. A fad is creating a limited liability entity that will buy already traded liabilities and repackage them as new liabilities and hopefully sell them with a spread over the original liabilities in order to pay lawyers, accountants, managers, bankers, sales people and, of course, risk managers (who quite frankly did not prove to be much useful), in the process. Now we're talking fad.
First I was not a risk manager. Second the team I was part of was drum roll.... CUSTOM PROGRAMMING!!! You see the way that the teams were split up were according to business on one side and software on the other side. And in the software it was split up in products. And I guess since you are from one of those environments you can probably understand that there are a whole host of products, like Front Arena, Lighthouse, etc, etc... Because this was the software side of things they thought it would be better to keep Front Arena with Front Arena even though they might cross business boundaries... So guess what, being in custom programming we were an odd lot of various skills... Next time don't presume to know something that you don't know about, ok? There is more to investment banking other than computers. There are a whole host of things that big investment banks do, that do not require an arms race. For example, wealth management is not an arms race. Or how about M&A, Equity Underwriting, or Debt underwriting... Not an arms race either since it is just a bunch of quants sitting down thinking how things can be structured. Again, this is only one part of the business. You need to read the following book: "The Business of Investment Banking" from Amazon... This book gives you are really overview of what investment banks do. Now that is a stretch if I ever saw one. First do long term investors want to trade in higher volumes? They already have it with dark pools since that was the original reason of dark pools. High frequency trading for a long term investor adds very little since the long term investor does not care if they got a stock at 3% higher or lower. What you are talking about is the trader. The trader is directly affected by high frequency trading since 3% at the bottom and 3% at the top can make quite a difference. A fad as defined by dictionary.com: a temporary fashion, notion, manner of conduct, etc., esp. one followed enthusiastically by a group. And considering how rabid you are on this thread, I made my case and high frequency trading is a fad. High Frequency trading works because the odds are unevenly stacked. Some are getting lots and lots chips, whereas others are not. But that will change with time to the point where it will not be interesting anymore.