Comment by jacquesm | Hacker News Reader

Comment by jacquesm | Hacker News Reader

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The value created by the work that you did for hire does not have to translate in to your salary at all, just like you're not going to have to share in the losses if the project turns out to be a dud.

When a welder helps to put together an oil rig that then either makes millions of dollars or explodes, sinks and causes billions in damage the fact that he did it as a salaried employee shields him from the damage just as much as it will insulate him from taking a share in the profits.

That's why it's work for hire. You get to decide up-front if that sort of thing is what you want.

So if someone offers you the opportunity to program a computer and make that company millions of dollars you are being compensated for your time, not for how much money your software will make.

The shareholders of the investment bank and the people that thought up the spec for the thing that you are building will have a much bigger claim to the profits than the guy that codes it up, and not surprising, they're the ones that will eventually make more money on it than you.

Why programmers should be different in this way from welders is not clear to me. Everybody that works for 'big-corp' makes the same kind of deal, and if you didn't make more money for the company than you cost you probably wouldn't have a job to begin with.

You clearly haven't worked in finance. The traders get a percentage cut, as do the quants, it's only reasonable the hackers started asking where their cut was. However they are conflating programmers and quants here, the guy who puts together a FIX interface is a pretty replaceable cog, the guys who develop algorithms and their implementations are quite literally worth their weight in gold if they're good. The thing with the serious high-freq stuff is the line between implementation and algorithm really starts to blur, you need people who can write seriously fast code that's also bulletproof and can be turned around fast. You need a deep understand of how markets work, how feeds work, how to handle everything from fast market conditions to managing latency issues in multi-venue trade distribution setups.

> You clearly haven't worked in finance.

Chase Manhattan bank, the Netherlands branch, formerly the Nederlandse Crediet bank, about 3 years from when I was 19 to when I was 21, both as a systems level programmer as well as an application programmer.

> However they are conflating programmers and quants here

Yes, but I didn't, I only spoke about the programmers. They do not come up with the models, they just lay the bricks.

The algorithm developer has a different role here and is more than likely not the same guy as the one that codes it up.

Please refrain from using the bricklayer image here. It is demeaning, silly and wrong. In order to implement a mathematical model, a programmer has to:

  a) Understand the model.

  b) Come up with a fast algorithm for the specification.

  c) Prove the algorithm correct.

  d) Make no mistakes implementing the algorithm.

All of this has nothing to do with bricklaying. Moreover, it's quite ironic that the geniuses who come up with the models often "forget" point c) for their own work.

And if there are lots of programmers who can do that once the algorithm has been given them, then the position will be filled by lower bidders who are willing to take salaries and don't demand slices of the cake. It doesn't matter economically how much it feels like artistry if there are lots of people who can apply the same artistry and who all want the job. Supply and demand.

Try putting up a brick wall before you class the comparison as demeaning.

You were the one who said just lay the bricks. This clearly implies that laying bricks is an inferior task compared to coming up with models.

EDIT:jacquesm, do you have a voting ring or why are your posts at 2 points (and mine at 0) the instant you post?

On the contrary, I think laying the bricks is plenty difficult in and of itself. But it's like wanting a share of the rent as a bricklayer of the apartment building that you are putting up.

I can do both (lay bricks and code), and I think there is a distinct parallel between laying bricks and writing code. Both use simple, re-usable building blocks to create very complex systems that need to be built to high standards if they are expected to stand the test of time.

The equivalent between the architecture and the algorithm designer is a similar one.

To demand a share of the cake just for laying the bricks tells me that you should not be doing work for hire but that you should be working as an independent contractor or as a starter-upper. You can't expect 'none of the risks and some of the gains' in a position like that.

A 'mere' programmer, just like a 'mere' bricklayer can be replaced by another programmer or bricklayer.

An architect or an algorithm designer contributes something uniquely theirs without which an endeavour might not happen at all.

Programmers are a rare profession in that they seem to think that somehow their contribution to a project is unique enough that they by the simple act of transcribing a specification to a working prototype have become co-owners, no other discipline suffers from this misconception.

If you want a slice of the action put up your money, but don't just put in your time, expect a paycheck and a slice of the cake if all you do is code, you are more than likely to be found 'expendable'.

While the comparison seems reasonable, it has one fatal flaw:

you are saying coders should be treated the same as bricklayers (salary); but are algorithm designers treated same as architects? I believe the former are paid percentage and later paid salary.

It seems financial sector do not follow the same rule as construction business.

Why should I have a voting ring? If the situation would have been reversed would it be ok with you if I accused you of having a voting ring? I don't think so.

If there is anybody on HN that has an aversion against voting rings it probably is me, and I wouldn't ever stoop so low as to cheat on something as silly as a conversation on a website (or anywhere else for that matter).

Whoever voted for me is free to step forward, I swear I haven't a clue who voted me up and you down.

edit: This sort of ticks me off by the way, within two days I first get this character calling me a troll: http://news.ycombinator.com/item?id=1556756 , now I have a voting ring? Way to go).

edit2: and if I had a voting ring my posting http://news.ycombinator.com/item?id=1560732 would not be stuck at 3 votes ;)

It wasn't me, but if you up-/downvote because you agree/disagree with someone, it's hardly surprising that you'd upvote one guy's posts and downvote the other. Really, there's no need to stipulate a voting ring here. (And adding one point to a comment is pointless, anyway; you'd use a voting ring to get submissions to the front page.)

"Prove the algorithm correct" - gosh, if only that were true.

It's a hybrid of programmer, trader, and quant. The article doesn't mention this, but they know how to program and how to trade. They come up with, code, and write the algorithms. At a prop firm it is usually used by a desk of clerks / traders at that point, who tweak dials on the software depending on market conditions. It's a lot more than just writing code. Going the startup route requires adding on the businessman, sales, negotiating hats as well as taking management of the desk and the traders / clerks. It's a not a trivial step by any degree, however compared to the value the trade developers are adding to the trade versus how they are being compensated, some how been willing to take on that extra burden to get a chance at a better deal.

I don't think the article was disputing the original work contracts or implying that any part of the contracts were illegal or deceptive. Instead, the programmers mentioned in the article were upset because they became aware of just how valuable their work and knowledge can be. Those past high frequency trading work contracts are over and done with, but that doesn't mean the programmers need to take the same terms for future work. In fact, with some investment of their own, they may be able to supplant some of the established trading house market with their own startups and actually receive the fruits of their labor. What a concept!

Wealth is all about percentages and the standard profit percentage share for professionals and engineers, "big-corp" or otherwise, is 0%. These programmers left to start their own trading companies, likely because the salary bumps being offered (a measly $45,000 extra on $150,000 base salary, in the example) were insulting compared to the revenue being generated directly from their work. That's demonstrable value. Consider: a 1% profit share from the example in the article would be over $300,000 per year. Not a large bonus at all for a financial managers or executive, but not an outlandish bonus for a highly valuable member of a lucrative enterprise, either.

Your last paragraph sounds a lot like, "keep your head down and be thankful you have a job." I assume you're just defending the status-quo and pointing out the tradeoff between sharing the risk/reward and being comfortably salaried. You can't possibly be implying that programmers or other skilled professionals shouldn't even try to negotiate better contracts, right?

We tried to get a percentage, figuring that our value added on top of all the infrastructure they had was worth atleast that much. Long story short, the prop firms weren't interested. It's a better for them to just hire new people, to maintain what they've got, it's that lucrative. Though that's starting to dry up as trade developers aren't cheap to hire anymore whether or not they are good. A lot of people I worked with back then have deals arranged where they get cuts now. It makes little sense for them not to.

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