How to Get a Job at a High Frequency Trading Firm (2024)

I often receive emails from individuals who are interested in joining High-Frequency Trading (HFT) firms. They are sometimes confused as to how to go about applying for roles and are unaware of the technical skills necessary to obtain a job. I've written this article to explain what HFT is, what type of skills are required to get hired and who to approach when looking for a career.

Be aware that HFT is an extremely technical discipline and it attracts the very best candidates from the fields of mathematics, physics, computer science and electronic engineering, often at the grad school level or with years of industry expertise in a niche area. Obtaining a role in an HFT firm, while often highly lucrative, will take a significant investment in terms of study and effort.

What is High Frequency Trading (HFT)?

The term 'HFT' covers a wide range of activities in algorithmic trading. For the purposes of this article it means executing trades at extremely high volumes over extremely low latencies. "Low latency" in this instance means acting upon information received from market data feeds and then finalising a trade on the sub-millisecond scale. In fact, the "bleeding edge" of the top HFT firms measures trade latencies on the sub-microsecond scale. This latency is only set to decrease as more sophisticated customised hardware becomes available.

HFT is an extremely secretive discipline. It is very hard to find out information about how HFT firms operate. Job postings, vendor marketing pages and the odd internet article do provide some insight, however. Ultra-HFT (UHFT) is also very distinct from other forms of algorithmic trading. It is highly technically driven and extremely quantitative. There is almost no discretionary input once an algorithm has been deployed (until it becomes unprofitable!), which is in stark contrast to lower-frequency systematic trading where there is often some human judgement mixed in.

It is also a very competitive and often-times disheartening environment. Months of research can be thrown away in a day if an exchange modifies its architecture, a new regulatory environment surfaces or a competitor is able to exploit a process at a rate faster than you are. For this reason it suits highly technical, disciplined individuals who crave autonomy and a collegiate environment of extremely capable people, while acting under a decent amount of pressure.

An Entrepreneurial Mindset

Many HFT firms are relatively small companies, often with a low headcount (~20-25). This means they possess a strong entrepreneurial culture and a meritocratic mindset. Any HFT firm will be questioning what you as a candidate can bring to the table that doesn't already exist in the firm.

Given that the bonus pool is shared by many employees (albeit in a weighted manner!), you will need to demonstrate an ability to generate revenue (either directly or indirectly) that exceeds your salary and bonus share, otherwise it clearly isn't worth hiring you. This means you need to possess a set of unique skills that the firm doesn't currently include, in order to even be considered for a role.

The flip-side to this process is that often you will be able to "create your own role" within the firm. The firm might not even be hiring, but if they feel that your skills in a particular area are strong enough they may create a position for you. The meritocratic approach of HFT firms usually allows significant autonomy in your projects. Thus if you wish to work with extremely smart and capable individuals, in a self-starting environment, then HFT is probably for you.

Such roles often come with longer hours than many might be used to. 60-70 hour weeks are not uncommon when project deadlines need to be met. The fast-pace, intellectual stimulation and compensation generally outweigh the workload, however. This may or may not suit your desired lifestyle!

Paths into HFT

There are a few paths into HFT, but most of them require extensive technical skills in one or more of the following hard sciences such as mathematics, physics, computer science or electronic engineering. Individuals often join HFT firms via:

  • Grad School - Many HFT candidates are employed straight from grad school in the relevant area. This is simply because it is easier to assess a candidate's ability based on their doctoral work/modules, publications or (perceived) quality of their school. Thus if you are really set on a career in HFT, then carrying out research into low-latency systems is likely to be a good way in. It is also not unheard of for the best undergraduates to be hand-picked from the top technical schools (MIT, Stanford, Cambridge, Imperial) and then "trained up" on the job.
  • Industrial Expertise - Experts in a particular low-latency industry such as telecoms are often brought in for their particular domain knowledge. Although, generally in order to function well in the initial domain these individuals have a deep technical background (usually academic) anyway. Scientists working on High-Performance Computing projects (such as the data centre at CERN) or other national super-computing laboratories are also highly sought after, by virtue of their "big data" experience.
  • Financial Exchange Experience - Any individuals with insight into the inner workings of the exchanges being traded on will be highly sought after as they are likely to be able to help carry out research into new algorithms that can make use of the exchange architecture.

One common misconception is that it is a hard requirement to possess an extensive background in finance to apply for HFT roles. Most HFT firms are actually indifferent to your knowledge of finance, assuming that you have extensive technical expertise elsewhere that they can make use of.

Common Skills

The roles at an HFT firm are quite diverse. Nearly everybody in the firm will have a highly technical background and will be capable of independent research in that field (i.e. is likely to be academically trained). Since HFT is essentially a "technology sport" many will have backgrounds in computer science and electronic engineering or low-latency expertise from backgrounds in other industries such as telecoms.

It is also becoming more common to find individuals with deep expertise in certain types of hardware such as Graphical Processing Units (GPU) or Field-Programmable Gate Arrays (FPGA).

Essentially, any skill that can in some fashion reduce the latency of the trade lifecycle or increase execution speed of algorithmic calculations will be found in HFT. Examples of such expertise includes:

  • Exchange Architecture - Extensive knowledge of how trading exchanges operate is a common skill found among high frequency traders. Being aware of how the order book operates, as well as the intricacies of the technology stack in a particular exchange can put you at a distinct advantage.
  • Processor Design - HFT involves substantial volumes of calculations over an extremely short time scale. Being aware of any means of advancing the execution speed of these processes will be advantageous. Deep experience with hardware and processor design, especially on systems other than commodity x86 hardware (alternatives such as GPUs and FPGAs) is useful.
  • Low-Latency Networking - A large part of the trade lifecycle latency comes from the networking stack. Experience optimising packet processing, writing custom networking modules or use of Infiniband switched fabric networks is also attractive.
  • Regulatory Understanding - Being highly aware of the trade regulatory environments such as Regulation NMS in the US and MiFID in the EU is essential to HFT operations.
  • Kernal Optimisation - The common theme among these requirements is reduction in latency and increase in execution speed. Thus it is now commonplace to rewrite parts of the software kernal in order to gain a speedup. Experience in Linux kernal modification is beneficial to many HFT firms.
  • Online Algorithms - While I've mentioned latency/execution I've not talked too much about HFT algorithms. These often consist of "rolling" calculations for means, variances and linear regressions. Thus any prior history of high-throughput time series analysis expertise is beneficial.
  • Programming Languages - While many UHFT firms have moved towards custom hardware (both for processing and networking), some less latency-sensitive systematic trading firms still make use of multithreaded C, C++ and Java (with custom garbage collection). Extensive experience in any of these languages and parallel processing will be attractive to certain firms.

As can be seen, these skills are often deeply technical and require either a grad school level of involvement or years of industry expertise in certain technologies. If your skillset intersects with any of the above areas then you should find that you'll be able to score some interviews with HFT firms.

Looking for a Job

As with most quantitative roles in finance the best way to gain a job is through recruitment agencies. The top equity-based HFT firms are generally located in New York and London. Chicago is also a large hub for commodities/derivatives HFT. The good recruiters are often relatively well-versed in the domain and will be able to advise you as to whether your background is suitable. Be aware though that the bar is set rather high! You will likely have to work hard to find a role and it could take some time.

While direct application to such firms is possible, the tricky part is figuring out which firms actually take part in HFT! Often, if you are well-known in your particular technical niche, the firms will try and recruit you directly. Thus it can be advantageous, if you are really keen to join such a firm, to try your hand at publishing work, attend/talk at some conferences and generally raise your profile.

If you have any questions about HFT or quant careers in general, feel free to email us at support@quantstart.com.

How to Get a Job at a High Frequency Trading Firm (2024)

FAQs

How to Get a Job at a High Frequency Trading Firm? ›

Convincing an HFT Firm That You're Good Enough. Once you feel that you are confident enough in your skillset to begin applying for HFT jobs, you will need to convice either the firms themselves, their HR departments or the recruiters that work for them, that you have what it takes.

How to get a job in HFT? ›

Convincing an HFT Firm That You're Good Enough. Once you feel that you are confident enough in your skillset to begin applying for HFT jobs, you will need to convice either the firms themselves, their HR departments or the recruiters that work for them, that you have what it takes.

How do I get hired by a trading firm? ›

How to get into trading firms?
  1. Find a mentor/be an apprentice.
  2. Work backwards from the job descriptions.
  3. Contact those not in the HR department.
  4. Get hired at a lower tier firm (first)
  5. Get your foot through the door in a related role.
  6. Get good at trading.

What skills do you need to work in HFT? ›

Advanced quantitative abilities: Most HFT firms look for candidates with a deep background in mathematics, statistics, physics, computer science, or engineering. Programming experience: Skills in programming languages, including the latest in AI and LLM, aren't a must, but they soon will be.

How do you prepare for high-frequency trading firms? ›

Getting into a high-frequency trading (HFT) company can be highly competitive, and it's important to have a strong understanding of computer science, programming, and finance. To be content with what you earn, it's important to have realistic expectations and to focus on personal growth and development.

How much do HFT firms pay? ›

The national average salary for a Hft developer is ₹19,00,000 in India.

What has attracted you to work for HFT? ›

With relief work you can pick up the hours you want on the days you want, so it's really flexible. You can plan ahead and work around appointments and any other commitments. So it works really well.” “Being a support worker is a job that doesn't really feel like a job.

Is it hard to get a job in trading? ›

Trading is often viewed as a high barrier-to-entry profession, but as long as you have both ambition and patience, you can trade for a living (even with little to no money). Trading can become a full-time career opportunity, a part-time opportunity, or just a way to generate supplemental income.

Is HFT a good career? ›

At the forefront of most of these representations is the pay which (unless this is your first time hearing about HFT) you'll know is very good. Even still, there are a number of smaller trading firms that have avoided the spotlight while paying as good, if not better, than the big boys.

How to get into trading with no experience? ›

8 steps to start trading
  1. Understand how trading works.
  2. See examples of trades.
  3. Research the available markets.
  4. Know the risks of trading and how to manage them.
  5. Learn more about trading styles and strategies.
  6. Create a trading plan.
  7. Begin trading on a practice account.
  8. Get into trading by opening your live account.

What is the income of a HFT? ›

High Frequency Trading Salary
Annual SalaryWeekly Pay
Top Earners$101,500$1,951
75th Percentile$96,000$1,846
Average$76,005$1,461
25th Percentile$46,500$894

Can individuals do HFT? ›

Another concern about HFT is that it gives an unfair advantage to large financial institutions over individual investors. Individual, small investors are at a disadvantage because they lack the resources and speed to process information as efficiently as high-frequency trading computers.

What is the best major for HFT? ›

Math, engineering, and physics majors are highly sought after by recruiters because of their ability to understand incredibly quantitative concepts, while learning to apply them in creative ways.

What is the criticism of high-frequency trading? ›

One major criticism of HFT is that it only creates “ghost liquidity” in the market. HFT opponents point out that the liquidity created is not “real” because the securities are only held for a few seconds.

How much do high frequency traders make? ›

High Frequency Trading Salaries

The average salary for High Frequency Trading is $1,10,931 per year in the United States. The average additional cash compensation for a High Frequency Trading in the United States is $28,049, with a range from $21,037 - $39,269.

What algorithms are used in high-frequency trading? ›

Online one-pass algorithms are instrumental in high-frequency trading, where they receive large amounts of data every microsecond and must be able to act extremely fast on the received data.

How much do HFT interns get paid? ›

High Frequency Trading Internship Pay in 2023
CompanyOpen internship listingsAverage monthly pay ($)
DRW10$11,718
Flow Traders2$11,249
IMC Trading5$11,933
Optiver18$19,666
3 more rows
Sep 4, 2023

Is HFT still profitable? ›

This type of trading can be very profitable but also carries significant risks. In simple terms, HFT is a method that employs powerful computers to execute a vast number of orders in fractions of a second. It employs advanced algorithms to analyze various markets and execute trades based on current market conditions.

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