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Comment by maest | Hacker News Reader

It's rarely the case that Technology sees those kinds of bonuses; that's most common on the Investment side.

And yes, even places like Jane Street separate between Investement and Tech.

In HFT (and often stat arb) the front and back office dichotomy doesn't apply as much. Basically anyone doing nontrivial engineering work has an opportunity to share in the profits of the firm at Jane Street. They don't need to be a quantitative researcher or trader.

Are you stating this from specific knowledge of Jane Street?

The division in trading firms, IMLE, is between front office (making and executing trading decisions) and back office (book-keeping, accounting, risk control, compliance, administration, etc). Both sides have technical and financial people. But only front office - both technical and financial - is likely to get wild bonuses from doing good trades. Back office bonuses are more about doing the job well.

If Jane Street is sharing some of the trading profit with back office staff, good on them.

I am, yes. I'm more familiar with their researchers, but I know (or have spoken to) people across different functions there. They have security engineers who earn over $1M/year (for one example of something which isn't usually "front office"). For Jane Street it's about impact: if you substantially improve something at the firm, you share in the spoils.

That doesn't mean literally everyone who works there is rich, and the quants will do better relatively speaking. But in the sense of engineers being second class citizens: no, I wouldn't say that's the case at all.

Most buyside joints don't have anything resembling a security engineer. If they actually need one, it's closer to a front office role than not. You also don't want some random jabroni in charge of something mission critical like that.

That isn't the case at the few London HFT companies I've applied to. They had a clear division between quants and everyone else.

In HFT firms algorithm developers are front office as much as traders. (And in some firms, traders don’t even exist as a role.)

which firms don't have traders?

The investment side is engineering.

If you're talking about IT that makes the printer work, sure.

I cannot speak for Jane Street, in particular, but I have spent many years working at a very similar firm, and Investment is not Technology.

There are engineers working in Investment, yes, but the risk profiles, the payout profiles and the focus of their work is very different. Investment deals with getting and analysing data, understanding the market and their algos, coming up with trading ideas, handling their PB relationships, doing the actual trading (e.g. portfolio optim, factor hedging, worrying about financing and borrow costs) etc. Technology deals with all things infra and (in most places) ingesting data and making it easily available internally.

In particular, I would be surprised if the interns in this article were on the Investment side - a fund would rarley publish anything remotely resembling research. In fact:

"Yulan ended up working with both the trading desk that was running this process, as well as the research group, which pointed her at some cleaner cost functions to optimize, as well as encouraging her to try out simulated annealing in addition to the greedy algorithm she started with."

The "research group" and the "trading desk" are Investment.

You can tell someone worked on the old wallstreet when they jump to explain that engineers are not a part of the core finance business. I've seen this trope a million times, and it used to be true. In 2020, the hedge funds making the most money are the ones treating their technology people like they treat their investment people. They interact, receive similar (though not 2M+) pay, and the programmer often has a part in analyzing the data and building the libraries to push the research forwards.

You're basing your assumptions on very little information. In particular, my position was with a buy-side fund set up in the last 5-10 years. It was definitely not "old wallstreet".

I worked at a well known hft prop trading firm, and then at an asset manager. The asset manager was staffed by mostly ex two sigma software engineers, a few from tower research. You basically cant even get an interview there unless you already worked with someone working there. A regular engineer there, a few years of experience made around 650k. I know the industry extremely well, and I know your type. I've watched so many buy side firms fall to the wayside because "good tech doesnt help investing, I will hire the humanities degree from princeton instead". Meanwhile, run through the top returning firms in the last decade, they all also happen to be the firms that pay their engineers the most.

It's too hard to fully explain how wrong this is, so just leaving the comment in case someone else reads it and thinks it might be right.

The investors are engineers. Full stop. They write code. The code makes trades. Everything else is noise to support the engineers writing code to make trades.

When I worked on Wall Street even the IT guys and the doorman had their personal accounts invested at the firm which was a significant perk given that the firm was closed to new customers.

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