High frequency trading isn't as alluring as it used to be. As Financial News points out this week, net profits at Optiver, Getco and Citadel are down - a lot. And last month, DE Shaw, a quant-driven hedge fund active in the high frequency space, made 10% of its staff redundant.
Despite this, the Wall Street Journal insists that there's still lots of hiring, mostly driven by banks which are trying to increase their presence in the space.
The WSJ claims that Nomura, JPMorgan, Citigroup, BarCap and Deutsche are all hiring. Recruiters say this is a slight exaggeration and that there isn't loads of recruitment, but that there is some. They also say that high frequency trading is one of the most lucrative careers to go into: some banks will (allegedly) offer traders 50% of their profits; 180k for a new PhD is not unheard of.
Strategists build the mathematical models underpinning high frequency trading operations. They need to be good at maths, but they don't need to be quants.
"Strategists spent a lot of time data mining," says James Brown at recruitment firm Selby Jennings. "Pure quants tend not to have enough statistics exposure. High frequency strategists comb through large historical data sets looking for patterns. The ideal candidate combines PhD level statistics with computer science."
A PhD in physics is also considered desirable for a strategy role. So is a background involving signal processing or statistical tuning.
"It helps to have some experience with applied probability, image processing, or speech recognition," says Dominic Connor at P&D Quant recruitment. "Most people have a PhD. Very few people in this area have an MSc."
Once strategists have built the models, quant developers need to convert them into code which can implement the trading strategies.
Developers need to be expert programmers. They'll need to be familiar with object oriented programming languages (C++ and Java), statistical languages (Maple, MATLAB, R, or S+) and scripting languages (Perl, or Python).
"If you're working as a developer, you'll need to be a much stronger programmer than anything else," says Brown. "You'll be working on code optimisation. It will help if you are familiar with Unix scripting and C++ features such as the Boost coding library."
Marcus Newman, director at specialist electronic trading recruitment firm Riversdale Consulting, says the ideal candidate for one of these sales roles is a rare hybrid. "The sell side want people with strong sales experience within electronic trading, who also have the detailed technical knowledge required for HFT, and who have ideally had a trading background which allows them to communicate at a trader level."
"This mix can be difficult to find," he adds.
If you've simply worked selling standard electronic trading such as DMA and algorithmic services, you're unlikely to have the depth of technical knowledge.
"High frequency trading is arguably a much more complex and technically focussed sale" says Newman. "You don't just need to understand the pipes and the infrastructure, you need to understand how to iron out the bumps in the road."
There's a possibility that hedge fund salespeople could move into selling high frequency trading capabilities, especially as HFT in some houses come under the Prime Services umbrella, but this will only be the case if their concentration has been quant hedge driven and they understand the clients technical requirements, says Newman.