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Citadel high frequency traders are probably earning $10m
5 October 2009
The Wall Street Journal has an interesting article today on the emergence of high frequency trading at Citadel.
Alongside claims such as high frequency trading was developed because it was seen as “easy to understand,” the WSJ offers the revelation that, in 2008, Citadel's returns from the 55 people it employed in high frequency were $1.15bn. That implies a return of around $20m per head.
Needless to say those 55 people wouldn’t have earned the full $20m. But they may well have earned half of it.
“A lot of the senior high frequency guys with an auditable track record are paid percentage deals [based on their returns],” says the head of one quant recruiter. “I’ve seen packages up to 50% this year.”
Dominic Connor, a partner at P&D quant recruitment, confirms percentage packages are the norm: “The gross bonus pool is usually 10-50%. The fact that I haven’t seen any CVs from Citadel suggests they’re towards the top of this.”
Recruitment in high frequency trading is said to have slowed as the end of the year approaches. However, Connor says “most banks” are still interested in hiring in the area, and the likes of Citadel and Getco are rumoured to be interviewing.
High frequency traders are typically are maths PhDs with knowledge of game theory and signal processing. Many come from Russia. Many others come via CERN.
Some high frequency traders have no high-level education and sit at home making millions!
John 05 Oct 2009
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