From Slashdot...

"Programmers who design and code algorithms for investment banking are unhappy with their salaries. Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions. One such anonymous programmer points out that he was paid $150,000 per year, whereas the software he wrote was generating $100,000 per day."

shodson 

From Slashdot... "Programmers who design and code algorithms for investment banking are unhappy with their salaries. Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions. One such anonymous programmer points out that he was paid $150,000 per year, whereas the software he wrote was generating $100,000 per day."

Why do they revolt? They have a lot of options:

- selling the HFT algorithm to Russia and retire
- open a broker account and trade on their own - no need to tell the employer
- become a silent partner in a hedge fund
- publish it on Big Mike's Day Trading Forum to make it worthless

By far the best option available to them is to front-run their own algorithms.

Fat Tails 

Why do they revolt? They have a lot of options: - selling the HFT algorithm to Russia and retire - open a broker account and trade on their own - no need to tell the employer - become a silent partner in a hedge fund - publish it on Big Mike's Day Trading Forum to make it worthless By far the best option available to them is to front-run their own algorithms.

- Sell it: The Russians will buy it, then you'll get two in the head from the mafia.

- Trade it: I don't think E*Trade can provide the sort of low latency environs you need for the algos to succeed, but it's great for barfing babies.

- Partner with it: Maybe the best option

- Upload it to NexusFi (formerly BMT): You'll get overburdened with too many "what are your settings?" and "this is great, but can you add a sound alert?" customer support requests to manage.

shodson 

"Programmers who design and code algorithms for investment banking

These are the CODERS. Not the modelers. They are hired out of school to implement a model or do the math around the model. Maybe they can come up with their own models, usually they cannot.

I had an interesting conversation with one such person. He knew NOTHING about trading futures, but they were taking their employers algo and going with a large investor. He said his algo was making his annual salary in three days. Investment banks (IMHO) do compartmentalize people. So the coders do know know enough about the execution side to leave on their own and modelers do't know enough about coding. Not saying it is by design, but it seems that way to me.

So they go to place like HCT which fills in the other parts for them and HCT gets proven algos.

You did not comment on front-running their own algos with a next-generation super algo.

shodson 

- Sell it: The Russians will buy it, then you'll get two in the head from the mafia. - Trade it: I don't think E*Trade can provide the sort of low latency environs you need for the algos to succeed, but it's great for barfing babies. - Partner with it: Maybe the best option - Upload it to NexusFi (formerly BMT): You'll get overburdened with too many "what are your settings?" and "this is great, but can you add a sound alert?" customer support requests to manage.

Dream on, they use programmers who earn 50.000 instead of the 150.000 mentioned.

traderwerks 

These are the CODERS. Not the modelers. They are hired out of school to implement a model or do the math around the model. Maybe they can come up with their own models, usually they cannot. I had an interesting conversation with one such person. He knew NOTHING about trading futures, but they were taking their employers algo and going with a large investor. He said his algo was making his annual salary in three days. Investment banks (IMHO) do compartmentalize people. So the coders do know know enough about the execution side to leave on their own and modelers do't know enough about coding. Not saying it is by design, but it seems that way to me. So they go to place like HCT which fills in the other parts for them and HCT gets proven algos.

That should work great, until the model they stole doesn't work anymore. Then they'll have to go back to get a job to get a new model

Also, if they really have a code that works for 100k a day, why in the hell would somebody search a partner to split costs who provide a bloody office and an internet connection ? DREAM ON !!!

I don't buy it !!

MetalTrade 

Also, if they really have a code that works for 100k a day, why in the hell would somebody search a partner to split costs who provide a bloody office and an internet connection ? DREAM ON !!! I don't buy it !!

My feelings also .. take a weeks salary and open an account if they think thats all it takes is the code .. either they will be broke in a week or taken over Wall Street in a year, and then they can quit their day jobs

TJ