Imprecate

GS isn't even top-5 on NASDAQ.

Professional trading was never cheap. The barrier to entry for becoming a high-frequency trading firm is much, much lower than becoming a NYSE specialist was a decade ago. You could co-locate there for a few million dollars, which is small money all things considered.

The biggest players in this game are not massive NYC investment banks.

ETA: That's not to say this is a good book. It's not. I'd recommend Vidyamurthy's Pairs Trading and Harris's Trading and Exchanges, but there really aren't many good books on this style of trading--anyone who knows how to do it well has no incentive to write a book on it.

However, you might have trouble getting people with families to take the job, especially if they're relocating.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a3Es...

Instead of being fired or laid off, employees are put into "Milton" type roles where they are made to feel useless, or intimidated into quitting/committing suicide.

There's a line between workers' rights & social safety nets and making the employment market extremely inefficient. I think it's fair to use public funds to retrain employees who have spent years contributing to society, or even to provide them a temporary income so they don't have to worry for their family's future. Still, people generally want to do useful work, and keeping unproductive workers employed hurts them, other candidates, and the nation as a whole.

In any case, most high-frequency operations are only trading for themselves.

In most modern stock markets there is not tiered access. My order is just as good as anyone else's, and no participants are given unfair notice of another's orders. Firms can spend money and be more competitive in these markets (e.g. better analysts, faster systems, co-location), but anyone has a fair shot at competing. If an order is public, there's nothing wrong with me taking action based on it before you if my only advantage is superior technology.

There are many high-frequency strategies, and front-running/manipulating markets might be one that unscrupulous firms engage in, but most would rather make legal money. The linked article doesn't make a lot of sense. For one, flash orders are no longer available on major exchanges, and secondly it's very difficult (and costly) to push most stocks 30 cents away from their fair value.

Most of the anti-HFT things I read are pushed by buy-side traders who have a hard time tricking the market into executing huge orders without moving the price, as if they ever had some natural right to do so. Trading is a competitive endeavor. If your poor execution algorithm shows your hand and someone more sophisticated notices, it's fair play for them to use that public information.

"In the old days, short-term liquidity was provided by specialists or floor-traders. In the past 10 years, their role has largely been replaced by sophisticated high-speed computer models. CNBC still reports live from the floor of the NYSE to preserve an outdated illusion for the public - the reality is the vast majority of the trading is now done by computers."

From Tradebot Systems' homepage (http://www.tradebotsystems.com/) - a proprietary trading group out of Kansas City that competes with major investment banks.

I disagree with the author's characterization of market-making as predatory. There are risks involved in providing liquidity, so there should be some cost, and as a purely competitive enterprise with many players, the costs will be very low. All brokerage houses allow you to submit your own limit orders if you don't want to pay the spread. I fail to see how a bunch of computer market-makers competing with one another to offer spreads tight as 1 cent are worse than the old monopolist NYSE specialist quoting in $1/16ths while seeing all order flow.

Saying you're eligible to work somewhere is different than disclosing your nationality. One is a material part of the hiring process; the other is something people discriminate on.

Stick to the things that actually affect job performance. It keeps the process fair for everyone.

Things are pretty similar where I work. We will look at most people if their resume lists the relevant technologies, but the phone screen and in-person interviews are very tough. There are so many liars out there that resumes aren't a very good filter. Even academic pedigree doesn't seem to count much in the software development world, though it counts more if you're doing more research-y/academic things like machine learning.

That kind of "Superman" thinking that things would be great if only you tried harder is BS in a lot of cases. Most people do not want to get into road accidents, deliver code late, or build a shoddy product. Fixing the incentives or process works better.

I would guess manuals are involved in more accidents and more fatal accidents, at least in the US, since the only people who buy them here in great numbers are performance enthusiasts, frugal bastards, and diesel truck drivers. Some enthusiasts are responsible and don't push their cars on public roads, but many aren't. If there is a difference, it's probably small. My parents have two of the same car, one in manual and one in automatic, and they never mentioned a large difference in insurance cost. Actuaries would charge manual and auto drivers different prices if their risk rates differed.

I like to keep a low profile for the most part. I don't want to attract the wrong kind of attention, look like a "young hot-shot kid" at work, etc. There's nothing wrong with women appreciating your success and ambition, but nobody wants to be a meal ticket.

I think women like confidence more than money, but having both never hurts. I once joked to a friend that my luck hadn't improved significantly despite earning much more; he quipped "you were still a guy who was going to make a lot of money back then, you just didn't have it yet."

The most interesting signaling behavior to me is being a hipster. Not having to work is really showing familial wealth and status. Most people don't come from a background where they can spend all day finding cool music and weird clothes rather than working a 9-5.

Financial industry experience is not required but it's a plus. Must be able to work under extremely high pressure, deliver on promises, learn and work independently and aggressively, build reliable software, and work with all areas of the business to generate P&L.

narita . jal712 at gmail

No clever modeling is going to generate 3000% quarterly returns in mostly efficient markets without taking significant risk. I do this kind of stuff for a living. Either the model is excessively curve-fit or they didn't account for real-world concerns like slippage, latency, market impact, the bid-offer spread, and transaction costs. A typical user of their signal services won't be able to reproduce those results.

Statistical techniques have some interesting uses in quantitative finance, but it's important to find an underlying economic reason to explain why your model works. Stat arb <http://en.wikipedia.org/wiki/Statistical_arbitrage>; is a common strategy, but there are sensible reasons why it (sometimes) works. If two securities are in the same industry, they'll tend to move in tandem since they're affected by similar factors. Thorp's articles (linked in the Wikipedia page) are worth a read if it's something that interests you.

Also, the difficult thing about modeling financial markets vs. other phenomena is that there's a huge incentive for market participants to avoid leaking information. Most inefficiencies are arbitraged away quickly or players who "show their hands" wise up; the market is a harsh mistress. Maybe years ago a big execution in a particular stock was indicative of its direction, but buy-side traders are smarter now and use algorithmic strategies that split orders temporally and physically across exchanges or trade in dark pools to avoid information leakage. There's not nearly as much incentive for you to hide your Google searches or ad clicks, so there's more opportunity for useful (and profitable) modeling using these techniques.

I think the Wii is cool and it definitely broke into new markets. Party/casual games are a big thing and I like playing it at friends' places. Families I know get really into it, with parents playing as much as their kids.

I'm sure there's little incentive for Nintendo to do so, but I'd gladly pay another $100 for a more powerful version with HD graphics and more HTPC-like capabilities.

ETA: The only bad thing I've heard about PS3 is how difficult it is to program for from former game developers. Publishers seem to be pretty good at getting good results with it, plus you can install Linux and tinker with Cell programming if you're so inclined. MIT has some really good slides and notes from one of their courses online (http://groups.csail.mit.edu/cag/ps3/).

I think it's more fair for the employees, which is why I support it; I don't find cigarettes to smell particularly bad. The only places where I miss it are little dives where cigarettes smell nicer than stale beer.

Anyway, to each his own. I do think smokers should be courteous in public even if most people don't find the smell offensive; waving a flaming stick around carelessly in a crowded place is dangerous.

I could only see that being the case for short-term contract work.