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High-Frequency Programmers Revolt Over Pay
An anonymous reader writes "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."
Did someone order waaaaaamburgers and french cries?
If you think that you can do any better, go out and start your own firm.
So...if they think they're underpaid, go somewhere else...
It isn't that the programmers earn too little it's that their bosses earn too much.
History is so yesterday!
If you think you are underpaid, you have two options. Ask for more money and quit if you do not get it, or quit.
Go green: turn off your refrigerator.
If you are so unhappy with your current salary, then quit and stop letting your boss milk you for money. Use your coding knowledge to make the coin for yourself.
If I coded something that made $100,000 a day while only getting paid $150,000 a year... well I'm sure any coder worth their salt can figure out that math....
I mean, correct me if I'm wrong here, but the programmer in question agreed to the terms BEFORE he wrote the first line of code.
Shouldn't gripes like these come up before you begin working? Maybe this is part of the problem, non?
Mod me down with all of your hatred and your journey towards the dark side will be complete!
Sounds like somebody should change careers!
fortunately, only our dogs could hear the revolt!
I write software that sells for millions and make $80k/yr. Where is my commission?!
I'm god, but it's a bit of a drag really...
If he's being given the algorithm and codifying it, he deserves a small part of the profits. Put another way, if he said screw it and left, how much would he be able to make? Does he know how to interact with a trading API, or how to actually make good trades?
Perhaps that anonymous programmer worked on the Nintendo DS. It does print money, after all.
Why don't they use their own programs to trade and make the big bucks then?
If it's not that easy to turn 'their' code into flowing rivers of cash, why don't they STFU and either do the job they're being paid to do, or decide that it isn't worth it and do something else??
This is a substitute for a clever sig that fits within the maximum number of characters.
Change jobs and stop complaining.
No wonder the one developer kept anonymous. Paid only $150k a year... Where did I put that little violin again? Get real!
D.O.U.O.S.V.A.V.V.M.
dancingmilk has it right...the folks earning the big bucks put more at risk than a little time in front of a computer.
"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."
And if said software screws up and costs a few hundred million, or otherwise causes other "bad things" to happen, what's the accountability of the programmer or the manager?
He can have mine, where he'll write code that helps save lives everyday, for less than six figures.
If it is only the software generating $100,000 per day, why did he write it for them as opposed to just writing it for himself? Is it beyond the realm of possibility that these highly paid co-workers are actually adding some value?
How can the guy survive on 150K a year? I bet he had to settle for a little cuddy instead of getting the large custom houseboat. Cry me a river.
--fatboy
they point out that they get paid only $10,000 a year, whereas the coal
they mine produces $100,000,000 a year in electricity revenues.
-paul
NEVER enough, for some people...
Just tweak your code to forward all fractional cents to you. It's so easy even Richard Pryor can do it!
I'm the brother of one of the managers he's talking about (maybe not the specific boss in question, but he's in the same situation) and let me tell you...Did the programmers come up with the specs? Did the programmers come up with the strategy? No. They are just automatons pecking away at the keyboard while stewing in their own envy juice. Lame. Intelligence should be and is richly rewarded and as we can tell from their low 6-figure salary those developers are simply not as smart as the managers. *shrug* bring in the next batch
FTFA:
"Now some programmers feel used and are instigating a revolt.
They are doing so by striking out on their own or forming profit-sharing arrangements."
That's hardly "whining," in fact it's precisely what they ought to do.
The outstanding part is that Forbes is recognizing this. We all know that folks in IT are underpaid in many professions, but the proof is when people actually say "fuck you" and go work elsewhere. That will *force* salaries up to the real market rate. And when publications like Forbes notice this, it's harder for managers to pretend it's not happening.
Thank you, to the ladies and gentlemen who struck out on their own, and thank you to Forbes for noticing. Both of these will make life a little better for the rest of us.
The programmers are revolting...
You said it; they stink on ice.
Don't blame me, I voted for Cthulhu.
A counter-point to all of the hate.
a. The American Dream (tm) says that if you work hard, you will benefit in the end. High risk / effort jobs should pay well
b. I bet these guys signed some sort of non-compete contract. Let's say that you and your buddies are the golden boys of financial trading algorithms. I think that you should get pay increases if your company is doing well. A 20% pay increase would probably shut them up.
c. After actually scanning the article,
Computer jockeys setting up own shops in bids to make millions.
[...]
They are doing so by striking out on their own or forming profit-sharing arrangements. Jeffrey Gomberg, 32, worked for a trading firm that paid him a low-six-figure income after four years on the job. His trader colleagues, by contrast, made millions manipulating the algorithms he'd written.
[...]
The programmer's bosses offered him an office and a $45,000 raise, but he left instead. He found a partner, and together they began trading on their own. The programmer now pockets more than half of any profits his software generates. The programmer says he's making about the same money he did at the job he left. But at his old job he'd topped out in pay while now he says the sky's the limit.
“I'm on my way to making a ton,” he says
It seems that they did the right thing. Why are all of you complaining? They didn't like their job, they grew a pair of balls and went out on their own.
It's amazing what reading TFA can let you know.
"Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions."
A Nascar Driver's pit crew recieve a low 5-figure salary while their bosses - who use the cars to win races - often earn millions.
I get why the programmers are disgruntled, the code they write makes a lot of money and they aren't getting a huge cut, but it seems like the algorithm the program is based on would be the most important aspect. Besides, $100,000 a year doesn't seem that bad to me.
Sent from my iPhone 5
Everyone is paid less than their worth. That's why people would form unions before they were stupefied by tv and the false hope that they would rise to the exploitative class. The fact that people are now paid less than 1/100th their worth isn't surprising but it is pathetic.
Democracy Now! - your daily, uncensored, corporate-free
Just because you design and code systems that others can make millions from, it doesn't automatically mean that you're being underpaid. Is it your software, or the way that it's used that is adding the real value?
If I wrote software that helped someone to write a bestseller, should I complain if they made a fortune and I didn't? If I'd invented and written a "story generator" that took a few bits of input from a user and spat out a great novel, then yes I would be annoyed (although I'd presumably just create a book myself). But if all I did was create another standard word processor, or even if I'd coded the story generator based on someone else's algorithms, then no I wouldn't.
Anyone who doesn't like the conditions of their job, whether it be pay or whatever, always has the right to quit (at least in this country). So if you think you can do better elsewhere, go for it. If you are proven wrong, scuttle back into a job working for the man while looking for the next opportunity to break free again. Sooner or later: profit! :-(
The difference between winners and losers is that everyone loses, winners merely shake off defeat and try again.
My friend started 3 companies. The first 2 failed. He went back to working for someone else each time. The third one was a success. He eventually sold his share in the company for (I'm guessing) $40M. He retired before he reached 40.
I'm still trying
[i]"Wwaaaa...I only make 150K a year...waaaa"[/i]
Cry me a river...
With the US hitting double digit unemployment I would bet there are a few people who would be happy to do that coding for HALF of what he is making.
I have to return some videotapes...
just because someone has found a novel way to make a lot of money without a lot of work does not entitle everyone in the production chain an even share.
The intended theory is that people earn money based on the worth of the goods or services they produce multiplied by the rarity of the skills required. The (relatively) small amount of work being done to earn that $100k/day does not mean the work is worth $100k/day, it just means that there is something to be taken advantage of causing a disproportionally high return.
If I write code for two days, of relatively equal quality and complexity, and sell each day's code to two different people, and one of them uses it to make $1000 and one of them uses it to make $100,000, it doesn't necessarily mean I should get paid 100x as much for the second job. It means the second guy has found a much more lucrative way to use my code to produce a profit. Now this does usually mean I'll get paid more, but to expect 100x the pay is just unreasonable. That excess money isn't for my brilliance on day 2, it's for the guy that found a way to sell my sand for its weight in gold.
These people that are crying about their "low pay" would be dancing in the streets if their bosses were actually making less than they were, doing the same thing. It all comes back to basic Greed... "He's getting more money than I am, so I must be entitled to some of it." No, not really.
Maybe instead of complaining about they pay, you should try to do your employer's job, since that's obviously where the profit margin you're looking for is at? Oh that's right, you can't DO that, can you? So they obviously have a skill you do not. Maybe that's why they're taking home more money than you? See, that's how life works.
I work for the Department of Redundancy Department.
This is as common sense as it is funny
Considering the unashamed nature of the greed in investment banking, this is not at all surprising. The whole point is to hoard as much as you can for yourself and limit your losses on every front possible. While essential, programmer salaries are nothing but an expense to be limited as much as possible. If you expected altruism or fair play, you're in the wrong industry.
That said, if you want to experience unfair salaries, try being a sysadmin/programmer in an academic setting. Oh, your salary is only in the low six figure range? Whiners.
Alex, I'll take keybindings not used by Emacs for $400....
I'm not arguing that Wall Street salaries are reasonable, far from it, but the comparison is not so simple. The reason the programmers make what they make is based on a value comparison of their skills and knowledge with others in their field, and what it might cost to retain (or replace with someone possessing similar abilitites) were they to walk. The reason Wall Street traders make what they make is based on a different skill set (and probably connections, too) and is probably more closely tied more directly to the amount of profit they can generate. The fact they are using a tool created by somebody else is not a huge factor. If the programmers are truly behind the *design* of the algorithms rather than just the coding/implementation, then they definitely should share heavily in the profits. But I suspect it's not so simple as mashing a button and sitting back and watching the profit counter start incrementing. The people who make footballs for the NFL probably make $40,000 a year. The players who use them make millions.
Capitalism in action!
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Yes, and I am the IT Manager who makes sure that the bankers and analysts have the hardware, software and comms tools to do their jobs. Right down the corridor is Michael's room - he's our maintenance guy - if he didn't empty my bin, keep the area tidy and make sure the lights stay on...
AT&ROFLMAO
Those programmers and those brokers are doing nothing of worth to society. They are just playing games with currency. If our government wasn't in complete collusion with Wall Street, millisecond trading would be illegal. The issue isn't that the programmers aren't making enough money, it's that their jobs and the jobs of their bosses should not even exist.
Ceci n'est pas une sig.
Let them start their own investment bank company. In other words - fully take on the risks and the profit.
OK Slashdot. I will play ball. Here is the comment you are looking for with the posting of this article. "This isnt fair! If you think about it, the programmers really make the money, I mean really! Its sooo stupid that the guy that uses the program makes so much more money! Its not right. IANAC, but as Marx said...."
are lucky to even get paid these days. If I were netting $150,000 a year and were unhappy about it, I'd save up and open up a business (luckily, there's plenty of stuff to be getting on with around the World - and people to PAY for the stuff, according to the article). I'm just saying - be your own boss...
Back to work...
Given up the sigs
these guys are horrible people. Making a 6-figure salary (especially in this economy) is amazing. I understand that their software makes tons of money, but how can they complain about a 6-figure salary when there most people never make 100,000 in there entire life in so much of the world?!?!!
Make high speed trading illegal. Each individual trade needs to be human initiated. Solves both this little problem, and the much larger "Big Evil Bank" problem.
in june of 2010, the US unemployment rate was 9.5 percent. Be glad you aren't giving 50 cent blowjobs just to get a hot meal in your stomach. Make do like the rest of us and quitcherbitchin.
boycott slashdot February 10th - 17th check out: altSlashdot.org
Programmers who can write a halfway decent market prediction algorithm are being churned out by universities all over the world in astounding numbers. Investors with the available funds to make use of those algorithms, not so much. I'd say a six figure salary for a programmer is pretty good considering how many out there are unemployed right now.
mmmm...forbidden donut
They are welcome to swap jobs with me. I'd be more that happy with $150,000 a year.
Currently, I'm unemployed. I've written a Google Android app and uploaded it to the Market. I'm not in a country where I can charge for my app, so I have ads in it to try to generate some revenue. The app has been on the market place for 17 days so far, and I've made $2.65. That equates to about 15.5c/day, or $56.90 a year. I had to pay $25 to create my account, so that makes it $31.90 for the year!
So only too happy to swap, guys.
(for those interested, the app is on the market here: market://details?id=org.thetomahawk.spreadsheet )
I work in the field of Computation Electromagnetics and my code is an integral part of the leading high frequency electromagnetic analysis. So far none of my staff who report to me have revolted about their pay. The same goes for my fellow managers. So I was very happy to see the headline. It must be our competitor who is having such problems and employee morale. I was just about to call our HR to launch a poaching operation to peel off the last couple of good programmers they still have (I am still after you Sanjay and X'iang). Then I see it is an entirely different meaning of the word "High Frequency Programmers".
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
I work 55 hours per week as a developer and pull in $95,000/yr. Last year, I took a pay cut because the poor economy had driven down salaries and the company decided to take advantage of the lack of competition. I have trouble feeling sorry for these people making $150,000/yr for 40 hours of work. Sure, the managers shouldn't be making millions, but I'll be happy to give these managers my contact information so they can call me when their "disgruntled" employees quit. This example continues to show how the people on Wall Street have absolutely no clue about how most people live their lives.
O.K., they're not starving or nearly, but it's kind of appalling to see people mocked so mercilessly merely for raising a fuss over what they consider ill-treatment.:
In a market system, you get paid as much as you can swing. Some of that is conditioned by how much value you add---not as a direct factor, but it goes into the Mgt's calculation of how little they can get by with paying you, at least via the question of how much they would lose if you should leave...so making a point of how valuable you are to them makes a lot of sense.
A lot of that, I believe, has to do with basic, primate, dominance and threat displays (much like comments on the web, including this one, probably). So whinging and talking big and making threatening noises can all be part of what can move you toward your optimal...."can be", no guaranties, but why mock it?...unless you're trying to move the curve in the bosses' favour.
So complaints can help you; so can solidarity within groups. You don't have to join Ken Macleod's book's I.W.W.W.W.W. (the 'Webblies') but I think the habit of mind which has less sympathy for the people like you than the people more likely to boss you around is a bad one, and leads to conditions in which you're more likely to be under-paid. Even though the market has no concept of 'deserve' or 'fairness' except to the extent that its participants' choices are influenced by such, _you_ probably do, due to Our Glorious Primate Heritage...if you think it it 'right' that you should be paid more, my guess is that you'll come out better than if you just acknowledge that you _want_ to be paid more---it shouldn't matter, but it does, and the market cares a lot more about what is than what should be (except to the extent &c.).
Ya know what you should do? You should make the software round down the dollar amounts 'n put the extra pennies in a savings account that ya can siphon off. Think I saw that in a movie once.
.
Prisencolinensinainciusol. Ol Rait!
I work for a company where my programming efforts generate multiples of my salary in revenues too. Isn't that the point? To produce a substantial return on investment? Sure the bosses are probably overpaid for what they do, but these developers sound like whiners with no clue as to why it is their respective companies hire programmers: to make the company money!
Investment banking does not "generate" money.
If you're feeling generous, you could say it "wins" money, like a gambler might.
Otherwise, say it "scalps" money.
But no, high-frequency trading does not "generate" money.
I was a programmer for one of the companies mentioned in TFA; you've heard of them. The algorithms they're talking about are not really developed by the programmers, they're typically invented by the phalanx of PhD mathematicians the company also employs; the programmer's job is to implement it in the most efficient way possible.
Day one I was handed a paper on Eigen-related trading, straight out of TeX and was told to implement it. I admit that I had to go to the bookstore at lunch just to figure out what some of the symbols were. What I had two weeks later was a working version in C++ that did the job; over the course of a few months I refactored and refactored it to run faster; no object copying (everything using references), bit shifting, you name it, I used it. The code was tight and ran fast; as far as I know it's still being used.
I see it more as being a waiter; you may be the "face" of the restaurant, delivering the meal, but your tips also go back to the cooks, busboys, etc. I helped out on another project where, to this day, I *still* don't get how it works, yet the code too runs fast and correctly, as far as I know.
It should also be noted that the pay might be good, but the life is horrible; if you're young and single it's definitely something to go for, but save your money because there will come a time when you just can't do 100 hour weeks, week after week after week for years and years.
The only memory I really have of my 20s and early 30s is the glow of a screen.
Quit your job. Write your own program that generates 100k per day. Why do you need that investment banker anyway? Oh... Capital to invest in the market to make the 100k per day.
And have worked in financial firms for over ten years. It's not really by choice, and honestly I'd love to get out, but at this point in time the economy isn't exactly what I'd call "stable" to do it. I have been looking.
But to the article's point... the software programmers write in financial firms are designed to ensure that if certain thresholds are met, that trades are automatically executed. There's a buy limit, a sell limit, and the task of the trader is really to find out where they want to put the money.
The funny thing about it, is that these traders could put basically any company in there (any company of reasonable value and had reasonable research on it) and the software would mitigate the risks. Those algorithms aren't spread out around a bunch of programmers, they are usually in the hands of a few -- and for good reason. Any idiot off the street could put their cash into these systems and have the software mitigate all the risks for them, executing the trades automatically.
Strangely enough, the average return to investors for a mutual fund, is actually less than the S&P 500 return. At least, if you factor in fees, charges, and other miscellaneous charges. The idea that a Wall Street firm can do *that* much better than the market average is generally speaking, very difficult. They make a lot of money on plain old fees, and if they manage to get 1% higher return than the S&P (which involves using these types of algorithms) they can make big bucks doing that. The only time I've seen firms make well over the market is when there's "funny business" going on. You know, wrapping up bad mortgages and calling them AAA rated stuff.
Anyway, the point is twofold. First, what these programmers do is extremely valuable because traders can sit by all day long and trade, and then their trades are secured by this software. Basically, it's their job security. The fact that very few programmers are in the position of developing the trading systems for firms -- at least the algorithmic logic part of it -- means a lot more than if they were part of a team. Usually it's a team of one, or two at most. And for that, they should really be paid a huge premium because they have knowledge about stuff that's WAY beyond the normal bounds of solving logical problems in programming, but requires really high level math, prediction systems, and even intelligence systems to scan news articles and trade accordingly.
That said... do yourselves a favor. If you have money in a financial firm -- take it out and invest it on your own. If you invest in a big index fund, there are very little fees, and you'll basically never do worse than the market. You don't have to take my word for it -- find a bunch of mutual funds that you like, and then peg them against the S&P or the DOW. You'll find that over time, the returns aren't that far off -- and if you cut out the fees you're paying, you will probably wind up ahead. And to boot, you can be happy in the knowledge that you're not supporting these firms take away our economy from us for the sake of a couple of bucks.
All in all, keep this in mind -- bonuses in Wall Street firms are paid on a yearly basis. There is no such thing as a long term outlook, so if traders or managers want to make a quick buck at the expense of everybody else -- they will do it. It's why I'm looking to get out of finance firms myself, because I find it distasteful to work in them, but I am not going to be stupid and 'jump' when there's nowhere to go.
The price is always right if someone else is paying.
... buys you a middle class -- and I don't mean upper middle class -- lifestyle; esp. if you've got dependents to support as well. You can pull that nyc income and live in places where it goes a lot further, but you'll be commuting an hour or more (sometimes much more) to do so. After taxes, 100k there is roughly 65-70k take home (estimating broadly). In a place where a completely boring, typical one bedroom apartment goes for 1500/mo (outer boroughs) to 3000/mo (manhattan), monthly transit and commuter rail passes can set you back another 300/mo combined, and electricity is 3x as expensive as it is in the interior states, and groceries average 2x as expensive, that doesn't go very far.
News for Geeks in Austin, TX
He gets 150 000$ per year to write basically what is basically malware and complains ? I write nuclear reactor control/command and data acquisition software and get 25 000 euros. No, there's no zero missing, so fuck him.
Hi, you must be new to America. Here, money is more important than life, ethics, or anything else.
Palm trees and 8
I wouldn't accept this either. These high frequency trading algorithms serve no market purpose except fleecing the little guy. The fact that the algorithm is making so much money would make me sick too.
The entire lot of them should be unemployed.
--why?
Many years ago I created fancy condenser units. I could easily create four or five a day and they sold for 5K each. I was payed about $10. per hour and creating $25,000 in product each day.
My point being that our economic system is slanted in such a way that those that actually create are often not paid much at all whereas those that create nothing often are very well paid. That attitude is beginning to trigger some real negatives. The car mechanic or tradesman now often has little conscience and is likely to cheat and do poor work to whatever degree he can get away with it while charging huge rates for his efforts.
His salary isn't too low, his manager(s) make too much! And they're not even producing anything useful. They're just manipulating financial instruments. How pathetic is that?
And that is why there should be a 1 cent tax per transaction.
had i tried, i couldnt have put it better.
If you look like your passport photo, you're too ill to travel. - Will Kommen
How much a construction worker earns and for how much are buildings sold?
Is this the same high frequency trading that involves beginning a series of transactions with a seller, and exploiting the "cancel" option, to determine the minimum price, then undertaking a similar process with a seller, to determine the maximum price, while paying the exchange to give them access to buyers and sellers before the general public?
If so, then this is really a story about how people who perform no service that has any value, are hiring software developers. the software developers are realizing that they are getting underpaid for the intrinsically dishonest scheme, and so they are leaving their original employers, and demanding more equitable deals from future employers, in exchange for the same dishonest practice.
It's sickening that the practice exists, and I don't care if the people who do the work are going to get a larger share of the unearned pie. they should be working for an industry that creates something of value. And if that industry doesn't exist; if the only jobs available are jobs leaching off the rest of society, then McDonald's is always hiring.
It costs $20K/mo to get a box close enough to the market data to make reasonable high-frequency trades. The box itself costs about $10K. Everything else is sweat-equity. Put your $30K on the barrel and start making money. If you fail to recover your investment in the first month, you weren't as good as you thought. Try again next time. $30K is too high? Then get 6 guys together and pony up $5K. I don't see the what the complaint is here. Next thing they'll ask for is a union and profit-sharing. If you can't handle the heat, get out of the business. Programmers write code. You get paid for your time and experience. If you want your code to make money for you, then you are in the wrong business. Hire some programmers and start trading. -Hope
Is create a computer virus that takes fractions of a cent from each transaction and puts it in their bank account.
Absolutely nothing could go wrong with that fool proof plan.
Troll is not a replacement for I disagree.
Oh those poor fragile, precious little babies! How could their mean hearted employers do that to them?
Fuckers. I would absolutely love to make something in the low six figures. I'm an ASP.NET web dev earning something in the low 60s. I've been in the industry for 10 years and this is the best pay I've made in my life.
Technoli
Not a single highly rated post to point out that high-frequency trading is basically abusing the stock market? Overloading trade queues and then aborting if the trade isn't in their favor. Which, basically jams another middleman between the market and your trade, causes your 401(k) to earn less, etc etc. Their only purpose is to siphon money a fraction at a time many times in a way the you will never have access to. Their trading high-freq machines sit feet from the trading network backbone to ensure they can queue and abort all before your own trade goes through. Additionally, it was pointed out recently that this network is not encrypted because speed is the priority -- so they are basically snooping incoming bids and asks before the rest of the market sees them. High-freq trading is basically illegal and rigged to rip off the market.
Strangely enough, that's what the article is about. A whole bunch of programmers asking for more money, being told they can't have it, then quitting and setting up competing businesses that are outperforming the first set.
You read the article, which means you don't belong on Slashdot.
Please leave.
$150k isnt enough for you? Then quit and start your own damn company. Then, you too can be the fat cat sitting up top raking in the millions. Oh wait, but then you'd actually have to have responsibility, make decisions, and manage people. Then it'd actually be your ass on the line in case you make the wrong trading decisions. Don't think you're man enough to handle that? Then shut the fuck up, sit down, and get back to coding, and enjoy the fact that you're raking in the big bucks in a career field (programming) that doesn't normally pay worth shit, and you didn't even have to spend years in the military to get a security clearance and take a job in some armpit of a country to do it!
Here we have a bunch of jerks whining about the 6-figure salaries they earn. I wish I were earning what these guys earn. If they have a problem they can go find a job elsewhere. Or do what everyone else has to do, rise through the ranks of the company and get promoted to the point where you're earning the kind of salary you want to see.
While I agree it's quite insane what some in management are earning they also have the responsibility of the entire company on their shoulders. I have a friend who's a programmer at a billion dollar firm that does business related with the stock market and the upper management is comprised of middle aged guys who's entire life is work. The majority are single or divorced and don't even have time for a girlfriend. But anyway, my point is that pay isn't based on what management is earning. It's based on your perceived value to the company. There are probably countless other programmers lined up behind these guys hoping to take their jobs. Not all are qualified but some are.
The whole point of having employees is so that they generate more income, directly or indirectly, than is expended on them. Otherwise, what's the point of keeping them employed? Again, it's rare that you're going to earn a lot more than you do now at the same job you're doing now. So the two best avenues to seeing your income increase is to get promoted or to start your own business.
not unless it is attached to a bail out . .and then only while sombody is looking.
And it ain't just trying to get along with Puck.
I work for a 'big' company, one that just announced huge earnings. My wife says out loud "Honey, they just made (fill in blank with obscene number), they can afford to give you a raise". How sweet, always thinking of me.
And I occasionally do something that by itself saves the company enough to actually be measured on the quarterly report. As in, "Gee, we made 1.245whatever last quarter. If I hadn't fixed blah, we would havw only made 1.44498whatever. Wow."
Oh yea, I'm important, in a lower-case kinda way.
First, these programmers ought to be told that their jobs don't exist except in the broker world, where millisecond trades are practical.
Second, does anyone pay the network admins real money? Ping and latency are crucial for these systems. You don't just go out and buy a gaming router and the business package from Time-Warner to run that sort of software. I bet the netadmins make just enough to keep them from taking bribes to snoop on traffic.
Third, and for me most important, do these programmers think through what they do for a living? Millisecond trading is the epitome of arbitrage, and even more so because it is by its design limited to the big players. The Insiders. The corporate weasels. Nice. The more you learn about HF trading, the more you want to ban it outright. At least slow it down to full seconds. Is there any real value in letting the machines dominate the way they are?
All the more reason I look for investments OUTSIDE the stock market. Wall Street is a cartel.
These whining programmers should consider their position as pretty damned good. But Wall Street is the new Silicon Valley, and programmers like these are basically doing the Valley Shuffle, from one side of the Street to another, jacking their pay each time. Nice work if you can get it, but the dot-com lesson is that sooner or later you are bound by reality. Soon enough, these guys will be happy to get a job coding PHP for the Next Insanely Great Thing, and taking the stock options knowing full well they just got toilet paper for compensation. They will beg for paid parking and a second vending machine. Don't go out and buy that condo quite yet, boys.
deleting the extra space after periods so i can stay relevant, yeah.
I always remember one of my first jobs, where I programmed some things that made the company win $400 000 while I was paid the minimum legal salary.
For this one, they gave me a $400 product from the company I was working on as "good work gift" =[
Nowadays I'm paid average but similar stuff still happens often enough, except sometimes I don't even get any gift or bonus. I suppose it's just the way the world goes. I make work I like and make programs I want to be proud of. Most "bosses" or managers work just to get all the money they can get out of it and buy big cars.
I'd like a big car but I couldn't work with the only goal to make money, so I do what I like and gain little. I suppose many people are like that.
Hello,
I just found a 15% off coupon for Kaspersky. Just type in 'Summersavings' when you are in the shopping cart. Thought I’d share it before it runs out on the 16th August 2010. Got mine today so it does work!
Sales jobs will always pay more than technical jobs and a programmer is basically a glorified technician. The disparity between paychecks is relative, but even this is probably a bit excessive.
So why not become a manager then instead, if the money is the thing that matters?
Sure, you cannot tinker with the interesting stuff like algorithms and mathematics, but at least you get wads of dough, and get to deal with corporate politics which typically revolve around illogical arguments and ass-kissing psychopaths.
It's your choice - deal with it or stop whining.
(Disclaimer - I'm not a manager nor software developer, but I realize you cannot get both sides of the coins with a single toss).
What exactly are the big risks? If you fail, you turn to your buddies doing well for an "angel investment" and start all over again. If you get caught lying/stealing/cheating, you have to give up about 10% of your hundreds of millions in profit to make the SEC go away.
The people who are investing their money are the only ones taking a risk. If the boss gets greedy and makes a few bad trades, they can kiss a nice chunk of their 401k goodbye. If he does a good job, he'll take 20% of the earnings for himself because he managed to find a couple of sucker programmers willing to write something to do all the work for him.
the code does 100k a day but how much is invested? since HFT represents about 70% (wiki!) of the US trading, i would say a lot..
I basically agree with the sentiment of solidarity, but you know who isn't in this conversation? The truly poor. The web itself is a relatively elite area, and to me, these programmers arguing for a 'fair share' while helping a bunch of overprivileged corporate thugs to ravage the the human and ecological environment, is hardly worth our time or support.
$150,000 a year with software making $100,000 a day?
People who work in mints have it worse. They print their yearly salary several times every day.
3 things:
The programmers have gone from $150K annually to $150K annually (more or less, according to the article). The $100K/day number is generated by the amount of capital in play, and the financial firms have lots more of it in play. When they went on their own, they had to use their own money, and accept the risks of loss as well as the rewards of gain. It doesn't actually state (that I saw) how much money is invested to earn the $100K/day, and I'll bet it is a lot more than we think. So the use of the $100K/day number is a little bit of an apples and oranges thing.
I believe that value pricing your services can be done (and teach how to do it). That is, the value of what you do should influence what you get paid. However... this is also affected by how unique what you do is, and if lots of people can do it, even if it is valuable, then you will only get a "commodity" price for it. If the programmers can be replaced by others who can do the same thing for $150K/year, it will tend to limit the compensation to $150K/year. Being already in the job creates a cost of change that can influence the salary upward (less risk that an unknown programmer will not perform as well, no time lost during transition, etc.). In this case, that value was apparently at least an addition $45K/year to the firm they were working for.
Good for them for going out on their own, and good luck with it. Maybe soon we will be able to complain that they are making way too much money for people who are not generating anything useful to society. :)
And I would add that the only reason that those programmers would have a hard time on their own is not because of the difficulty of running the business or an inability to stomach risk, but because of lack of capital. You need money to make money. Even that 100k a day figure is likely a smal, small percentage of the amount of total capital they have in the game.
No independent software jockey is going to have 100m in capital to make those micro transactions worthwhile. Plus, some of this software depends on the firm being co-located with the exchange, or having significant presence on the floor, or a significant number of clients to trade _against_.
You can't do this from your studio walkup with a DSL line.
In a perfect world the programmers could just quit and start their own trading firm.
If you had read the article you would know that they did precisely that.
No news here, nothing to see here move along.
If these things can turn around huge profits and you write them ... then you can increase your own freak salary but using them.
You make a large bonus at these sorts of firms that is contingent on your success. This guy talks about his salary. What was his bonus?
This guy, understandably AC, has insights as one of the participants.
Can we get a "-1 Wrong" moderation option?
I used to work for a very large e-commerce company that made millions every day off the code I wrote in exchange for a monthly salary. If the code I wrote had made no money for the company I would still get my monthly salary. There was essentially very little risk involved for me. Today I have my own e-commerce company. I don't make millions yet but I still have to pay my programmers their monthly salary. If and when I start making millions that's what they're still gonna get because that's what we agreed to and that's my reward for taking the risk. Of course, once I have a lot I can give them bonuses for their performance if I want to, but that's my choice. If I go under tomorrow I'll be stuck with a ton of debts while the programmers can just get another job (and none of them will be giving me money to help pay for those debts). As for the bosses getting more money than the programmers, that's also the way it works. They have more responsibility, so they have to make more money. If something goes wrong in their department it's also usually their head, not the programmer's. People can always stop being programmers and pursue a management career. It all just depends on the choices you make for yourself.
Let's be blunt.
The code this programmer produced does not do anything except help the wealthiest 1% get wealthier.
Those reaping the benefits from his code are not doing a damn thing except taking advantage of the matter that people are just hardcoded to do some stupid things.
This programmer is just helping the rich with wealth generation capture http://www.businessinsider.com/us-wealth-inequality-2010-7
This programmer is COMPLETELY replaceable in this endeavor.
And it isn't like this program is actually producing anything new. It's leveraging the mass response of the wetware.
http://wallstreet.blogs.fortune.cnn.com/2010/05/07/the-nyse-and-high-frequency-trading/
But it doesn't matter. Odds are this programmer is just as self destructive as the 27 percenters... http://www.balloon-juice.com/balloon-juice-lexicon-a-h/
If he wants the gap between his salary and those that pay him to financially rape the public, he should be looking to see how he can tweak his code to randomly create huge losses for his employer that would at the same time benefit causes that DO improve the livelihood of others.
So in summary. This programmer can go stuff it and his employer can go stuff it too.
The model used to computerize the stock market was wrong.
Everything should be in batch mode. Bids and Asks would be you put it into the system, then matched in a batch according to well known rules, and then the results of the matching process would be sent to everyone. The batch would run every 5 minutes as an example. This would prevent front running and many other forms mischievous behavior.
Batch mode is under-appreciated in the the Internet Age.
if they can't understand how their system is used to generate the 100k / day then the 100k / year they earned was too much
Why is it those who complain most about low programmer earnings are also the same that also most strongly oppose labor organization among technical professionals?
I'd make an analogy here, except there's nothing in society we let people buy and sell that fast, certainly not giant entities....I'd like to see someone try to buy a house and resell it ten milliseconds later.
And I'd like to see the law that sets a limit on how fast we can buy and sell things--even houses.
It's usually not practically possible to buy and sell houses so quickly, because of the need for clear title, etc. But as far as I know there is no law or regulation that actually sets out time limits.
The problem with setting long minimum ownership times is that it creates low liquidity. I'm not saying we need millisecond transactions to make markets, but a month would be way too long.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
they will no doubt discover that it's just as easy to lose money as to make it. When they do, the security of their old, relatively low-paying gigs might start to look pretty good.
Probably not. While they will lose money, they'll probably already madk a couple years salary by that time, so its still worthwhile to do it.
Workers get to keep more of the money their labor produces only when they organize and work together to keep it. That's what unions do. Without unions, we'd all be replaceable by those privileged to be bosses, through their old boy networks.
When programmers have a working labor union, it'll be harder for bosses to keep 99.9% of what the programmers produce, while programmers work 60 hour weeks.
--
make install -not war
First, would you expect all those brush makers out there to get a cut of all the artwork sold at galleries? Would the company that made the blade for the scalpel be entitled to a cut of the organ transplant operation?
The software I write helps make million$ yet I do not deserve megabuck bonuses. I certainly don't make $150K (I wish I get get abused in that fashion). If I don't like it, I don't have to remain and keep my job. So what if the CEO can buy a Porsche using my tools? I agreed to the arrangement.
I also happen to feel HFT should be illegal in the first place. It is just a novel form of theft and the very essence of anti-competitiveness.
-- Posted from my parent's basement
The bitter $150k salaried programmer is going to be shocked to find that some bean counter will find a way for a PhD in Bangalore to do his job for $50k (and consider herself well compensated)
However the real shock will happen when the combination of really sophisticated applications, HPC clusters and globalized business smarts gets the NYC trader making millions replaced by a Bangalore MBA merely making a few hundred k.
Shareholders at the big investment firms should be a lot more interested in having the second one happening as it will yield much more.
Let the developers take anywhere from 1% to 5% of profit realized by the applications they write. Fair is fair.
For example, if the gentleman in the case presented is pulling $150K but his app generates $100,000 in revenue, 5% of that would be $5K per day or $1.825 million per year for him. I'd say that would be equitable.
Most senior developers make $100k-$175k where I live. There are people who live in NYC that don't make anything at all and sleep on the street. So he could do that instead of complaining about his job is what you're suggesting.
This is not a matter of earning enough to survive, that's the the debate at all. It is a matter of fair compensation. If you're doing most of the work should you get most of the pay. These programmers, the creators of the software, feel they are being exploited by traders who are mere users of the software.
On the other hand, in the consumer electronics world, I don't think it is so unusual to make low 6 figures as a key developer while an executive makes 7 figures on a product that is pulling in 9 figures.
My industry is a little different since there are so many low level people involved in the software, hardware, mechanical, testing and design. If what I did was some software package constructed by just one or two engineers then I might feel justified in asking for a bigger slice of the pie.
“Common sense is not so common.” — Voltaire
I'm good at logic, bad at negotiation. I'm good with machines, bad with people.
Indeed couldn't agree more.
<snark>
Poor Carly was forced to run for the senate. Having to live the lifestyle of a senator rather than a high-flying CEO is so harsh - and that is only if enough peasants actually vote for her. What an indignity! I am getting my keyboard all wet while I write this. Just can't hold back the tears *the poor woman*.
</snark>
At least this takes their minds off the high-capacitance stocks that have been trying to get rid of them for the longest time.
IANAL, but you can't really be held liable unless it was intentional. Since you're not a professional in the same sense as a doctor or lawyer or civil engineer.
But your career in that industry would likely be over if you lost some big firm a billion dollars, because word would get out. In fact the rumor mill could blame you even if it wasn't your fault. I can imagine there is a lot of cover-your-ass behavior in that industry.
They could go program in a different industry if that happened, but I suspect they would feel like a failure if it came to that.
You don't have to be under physical or financial threat to feel high stress. Most programmers(and people in general) let themselves get into a psychological state where they are high stressed, even though rationally what they do is not really that vital. Nobody is going to die if they screw up. And they are educated and could find a job elsewhere if they lost this one. But usually developers just let their employers amp up the stress until they have a mental breakdown.
“Common sense is not so common.” — Voltaire
It has been my experience that the majority of people who don't actually work in sales, maintenance, or on production lines could, and most likely should be replaced with a few lines of code, if your job involves you doing nothing more than moving a few numbers around then your job could easily be handled by a computer with a much more consistent level of performance. Want to reduce costs and increase performance? Fire the vast majority of people holding meetings looking for ways to think outside the box, hire a couple of statisticians who know how to apply Benfords law correctly to the various metrics and data sets you already have, then send in the axemen where anomalies crop up. The biggest problem with management is that the computer revolution has failed to reduce the size of the management workforce, even though that is what it is best able to do and that is where the vast amount of corporate savings and higher dividend s for the stock can be created.
And the trader can be replaced at more savings! And your company can manage to operate INDEFINITELY without a C*O!
But these are the people with money and therefore in a capitalist system, power, so that won't happen.
Most of the rest of the nation is plain *revolted* at that entire casino scam industry and the huge wealth they skim out of the economy.
They need to slap the local sales tax on these high speed trades, just for a starter. They insist on calling those BS gambling games "financial products", fine, let them be treated like any other "product" and apply the sales tax to them. It's not "investment" anymore, it's just gambling.
And before anyone says "but, but, we need this and.."" chuck you farley, if it worked, and really helped the economy, they wouldn't have needed that bailout, now would they? Admit reality, it's a harmful conjob "industry". It's a broken, crooked, rigged, screwed up system and needs to be knocked down about 18 pegs or so, the whole ball game there is WAY overpaid for what they do, not just those poor 150 grand programmers.
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.
Wrong. The very large amount of money your boss invested (and risked), along with the algorithm that you coded (which your boss likely gave you pseudo code for) was generating $100,000 per day.
I know 2 guys who left my current company to do this (for different employers). Both are comfortably into the mid-6-figures. If you're good, you can get the pay. The fact that you're not getting the pay ... probably says something about your talent.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
Right. How many folks here make six figures? I've had a *long* career as a developer and as a sysadmin, and I'd need a 10% to make six figures for the first time in my life.
Then there's the incestuousness of it all: I used to live in Chicago, and I know, from innumerable resumes sent out and phone calls that unless you have experience in programming in the trading industry, you can't get a job in the industry.
Yes, you do note that there's no entry point to that loop.
mark
You can't make it illegal to buy and sell things quickly, nor do I think you would want to.
However, what you can do is tax gains on short term investments aggressively. You might tax gains on assets held less than a year at 90%, then going down to 50% until 3 years, and then going down to 10% or less beyond that.
Why can't these guys work from 'home'...home being somewhere other than NYC.
Personally, I'm thinking an internet connection somewhere in the Caribbean with a beach, a broad and a rum drink within reach.
That kind of money would still do good down there, and you'd not have to put up with the rude people up there in NYC.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
You get paid what the market will bear .... if there is a market.
Back when I worked for Boeing, I administrated six *NIX servers (a mix of AIX, HP-UX and SunOS systems). It spite of continued pressure from our IT department to use them*. Those duties took about 10% of my time. IT provided similar support services to using departments, for $50,000 per month per server. So I went to my manager and told him that, to be fair, I should be paid $3.6 million a year. Or, if I extended that pay rate to all of my daily duties, $36 million. Fortunately, he had a good sense of humor and I had to settle for a mere 6 figure salary (eight if you counted the decimal places, my boss pointed out).
*The engineering department was granted an exception from the mandatory IT contract (per corporate policy). This was due to the FAA having stepped in and kicking them off the job following a fatal crash stemming from poor product definition configuration control at their hands.
Have gnu, will travel.
We're talking about Hedge Funds here, so their bosses are in fact ex-Traders, ex-Sales and ex-Analysts from big investment banks and such.- The reason why they are the bosses of the hedge funds is that they had millions of dollars to start their hedge funds, business contacts to get extra founds at low cost and already potential customers lined up from their time with the big banks.- The reason they made millions of dollars in the first place is because they got fat bonuses in their previous job.- The reason they got their bonuses is because they were lucky: I work in the industry and I know what I see. Also, studies show that the best performing hedge funds in one year are less likelly to be in the top the following years - in other words, hedge funds are not consistent in their performance, which indicates that chance, not skill is what determines most of their it.Keep in mind that, most of the money made in Investment Banking is of the rent-seeking variety, such as:- Decieve your customers by creating and selling them strange, complex and expensive derivatives to protect them from a certain risk when they could get equivalent protections from buying cheap standard products from the market.- Get yourself in the middle of a transaction and take a cut. The transaction would occur anyway if u weren't there but either it would be cheaper for the buyer or more profitable for the seller.- Get 20x your core capital in cheap loans (thanks to low interest rates and an implicit government guarantee). Invest those 21x core-capital in safe, low return instruments (say, 5% yield bonds). At the end cash it, repay loan, post more than 100% returns on your core capital (since the 5% return was applied to the 20x loan + 1x core capital), pay traders big bonuses for their "skill".Essentially Investment Banking (and Hedge Funds) are the posh version of the Car Mechanic: professionals in the business use their superior knowledge of how finance works to decieve the customers (which are not specialists in that domain) to think that what they really need to "fix the problem" is something a lot more expensive that what is actually needed.This would be alright if it wasn't for the fact that some of their customers are the managers of things like pension funds which (mis)manage our money and "invest" it through those guys instead of doing the due dilligence themselves to figure out that the average return after comissions and costs of a hedge fund is lower than the return on major market indexes (which you can get cheaply via ETFs).So:- Guys that started working in an industry which is mostly parasitic got lucky and made millions in bonuses.- They used those millions, plus the contacts they created while working in that industry to setup a company and make money directly from the suckers^H^H^H^H^H^H^Hcustomers instead of via bonuses.- They setup systems (i.e. auto-trading) that allow them to insert themselves into and get a cut from other people's trades because their systems are faster reacting to the market than other traders since they're located next to the exchanges and react within milliseconds.- Add to this that in many cases, after they left their big bank jobs their old employer lost money on their bets and had to be rescued by the state using our tax money.There are plenty of bosses out there that one can respect for having real risks and clawed their way to success by creating companies that provided real products/services to their customers but these guys ain't it.These guys are more like pimps that made enough from forcing junkies to prostitute themselves that they could afford to open a brothel.
College-Pages.com - Online Colleges, Degrees, and Programs
They can quite, write their own high frequency trading system and then use it to make money for themselves.
Or, they can stop creating works for higher.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
> whereas the software he wrote was generating $100,000 per day
So, is this software available as an iPhone app? I have a feeling it would be pretty popular.
The article says they are doing exactly what I think they should - look to move into the trading type positions and earn some of the money themselves! If you want to earn the money the traders do, look to move out of the server room & onto the trade floor. There's still a demand for HFT talent with significant programming skills...
They were supposed to include code in their rounding routines to skim all the half cents of all the transactions off and funnel them to a Swiss bank account!
Overhead the albatross hangs motionless upon the air
And deep beneath the rolling waves
In labyrinths of coral caves
The echo of a distant tide
Comes willowing across the sand
And everything is green and submarine.
And no-one called us to the land
And no-one knows the wheres or whys
But something stirs and something tries
And starts to climb towards the light
Strangers passing in the street
By chance two separate glances meet
And I am you and what I see is me
And do I take you by the hand
And lead you through the land
And help me understand the best I can
And no-one calls us to move on
And no-one forces down our eyes
And no-one speaks and no-one tries
And no-one flies around the sun
Cloudless everyday you fall upon my waking eyes
inviting and inciting me to rise
And through the window in the wall
Come streaming in on sunlight wings
A million bright ambassadors of morning
And no-one sings me lullabies
And no-one makes me close my eyes
And so I throw the windows wide
And call to you across the sky
Their employers, in turn, get bigger bucks for taking bigger risks than the programmers do.
the problem is, they aren't risking their money - they are risking ours.
"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."
You do the job, you get paid. There are plenty of jobs out there that generate (or save) companies plenty of cash. Sometimes you're lucky to get a bonus, sometimes not.
The only time I ever really felt upset about pay was one job where I was constantly putting in extra time, etc, and really working my keister to make things work. There were quite a few complains about my predecessors - who quit midstream leaving me to land in their positions - and I got a lot of compliments about how things were being straightened up (a few, including my manager, commented that I was the best employee they'd had in my dept).
Hearing that was nice, but when we absorbed another company and my workload doubled, it got a bit rough. When review time came up, I got a bit of a raise, but I had also discovered that my predecessors (the ones why I was supposedly so much of an improvement over) had made 20%+ more than I.
After months of trying to get the company to spend a bit more on quality equipment/services and add to our diminished IT team, I finally sought work elsewhere. At that point I was offered the moon: big raise, etc, but I'd already found another position. It was even a little less pay, but I still feel it was a worthwhile move (especially since it's hourly, and companies tend to avoid mistakes that require OT if they're paying for it).
I was a bit sad to move on, but I heard that after I left, they started listening to the Sr Admin (my replacement) a bit more and actually fixed a lot of the issues in the company. Hopefully they gave the guy a raise too.
Pay isn't always about cash and greed. Sometimes it's about respect. Paying people what they're worth ensures you keep them around.
However, at $150k, that's a pretty good compensation for your time and work. It's more than most coding jobs I know, and I'd guess it's fairly par for the industry. Workers exist to do a job, and that job should make or save the company money. If he doesn't like it, maybe he should go private and contract out to develop the systems he believe are worth so much.
Programmers tend to be libertarian dweebs who equate good code with high status in the tiny core of people who program. They can't unionize, they can't conceive of small salaries (i.e., theirs), and they have no concept of exploitation. That happens to R2D2, not programmers.
Yes, software generates millions of dollars and creates vast wealth. Programmers think this is self-evident, like Douglas Adams spelling out how to build civilizations ("Bang the rocks together.") Even my unheard of contributions generated millions of dollars. And yes, my boss took credit for my work.
Burn out, crash and burn, kiddies. It's not covered on your non-existent health insurance, either.
``Tension, apprehension & dissension have begun!'' - Duffy Wyg&, in Alfred Bester's _The Demolished Man_
the income tax of senior execs of publicly-traded companies should be indexed to the disparity between the highest-paid and lowest paid employees: the worse the difference, the higher the rates (and lower the rates at the bottom too).
Factory workers have had this same experience for centuries. Most factory workers for most of the history of industry have earned a bare subsistence wage. They work hard all day making products worth several dozen times what they are paid to make them. Meanwhile the owner of the factory will collect the lion's share of what his products sell for even if he never lifts another finger for his entire life. In the modern age, ownership of the factory is usually split up into millions of shares and distributed among thousands of individuals or other corporations, so people don't even have to know what factory they're earning money from while not lifting a finger.
Sure, the factory owners (or shareholders) say that they had to invest in the factory, which was taking a risk for them, and therefore deserve the reward...but all they did was trade on their pre-existing ownership of capital which was unjustly accumulated in the first place, and the ONLY THING they were risking was a chance of ending up in the same wretched position that all their employees were already in, guaranteed, regardless of hard work or the success or failure of the enterprise. Somehow that risk justifies reaping all the benefits.
This story is just about the same situation in the high-tech segment of the finance sector. Fortunately these programmers are rare enough that they can command salaries far above subsistence, but it's not fundamentally different from what factory workers, indeed all workers, go through, and will continue to go through as long as capitalism is the world's dominant economic system. Those who produce value get a tiny share of the proceeds.
"I don't care about the Constitution!" --Bill O'Reilly, November 17, 2009
The way these programs work is they offer bids for extremely short periods of time (less than a second) that they never intend to fill in order to goose the market down or up a little bit. They cancel the bid before it has a chance to be filled. Nobody that doesn't have direct access and have their servers basically in the same building can do this. This is already violating one of the SEC rules which says you can't post offers you don't intend to fill. Look around and you can find monitoring videos people have posted showing these enormous bids showing up for very brief periods of time and then being canceled.
The other thing they do is jump in front of customer orders again violating an SEC rule. You are willing to pay 40.10, they jump in front of you with 40.0975 (shouldn't be happening as fraction bids shouldn't be allowed) and turn around and sell it back to you at a profit.
Already over 50% of the daily trading volume is due to these HFT programs trading amongst themselves and screwing the majority of investors. They are also responsible for the market quickly falling apart and hitting circuit breakers. There have been multiple instances where one or more of the HFT algorithms went crazy and took down stocks quickly with incorrect bids (they also sometimes bid up stocks incorrectly too).
The SEC could resolve all this very easily without harming any real investor if they had the balls to stand up to JPM and Goldman Sachs:
1) All offers to buy or sell must stay active for at least 1 second before they can be canceled.
2) No trade is allowed to execute in fractions of a cent.
3) You can't have a banking charter and the government backing that comes with it if you run a trading shop. Take government backed banks back to their basic business of taking in deposits and loaning them out.
Who are those owners of which you speak? If they are the share holders, then look at the dividend yield. It tends to be tiny. It's not really the share holders making that much.
-- Support a free market in the field of government
And so it says that they did the right thing: they left their crappy, thieving jobs and started their own firms. They're still only making about their old salaries, but they're calling the shots and the sky's the limit. This is why ethical capitalism RULES.
Gamingmuseum.com: Give your 3D accelerator a rest.
There should be a programmers union just like taxi cab unions, just like bus driver unions, etc.
Why is it that programmers are always left on the side of the road when it comes to benefits and entitlement???
Ahh -- now we see the issues more clearly. They don't trade, they don't have the guts or the stake money -- so that other guy DID produce something of value -- his money at risk, and his discretion to ignore the software when it was wrong or "didn't feel right". Believe me, trading is a full time job or you're going to get clobbered, there's a lot of homework involved, and judgement that may take years to hone.
After all, if you really wanted to hear some whining from programmers, how about if their pay was cut when a software glitch [b]lost[/b] 100k a day?
I use a version of that screed whenever (frequently) some broker calls and wants to trade my account, with me taking all the risks, including paying him to do it. They always have glowing commentary about how great they are. In which case, I ask -- they why aren't you so rich as not to need my couple millions to play with? If you're that good -- you'd be rich beyond the dreams of avarice, right? Even starting with only a little bit of money. That "click" I often get in response is quite gratifying.
Nothing hurts more than pointing out the simple and obvious facts.
Why guess when you can know? Measure!
"No, they are not "sucking money out of the system". They are CIRCULATING money in the system."
Except that we see the statistics that 10% of our population has 2/3 of the wealth. It's NOT circulating. That's why the middle class is disappearing today.
From Wikipedia....
"In the United States at the end of 2001, 10% of the population owned 71% of the wealth and the top 1% owned 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth.[14]""
So, how is that circulating again?
-T
I have a few points that are worth considering when taking this article with a grain of salt. My fellow programmers probably won't want to hear this stuff but it's true. I used to work for a large investment firm (3rd largest at the time I was working there).
a. it takes a hell of a lot more work, experience, and intelligence to get a CFA(chartered financial analyst) than a programming degree. The CFA is required if you are going to be a fund manager. Think of it as a much harder bar exam. Most people that manage to pass it have advanced degrees in economics and/or finance from an ivy league school.
b. Half the CFAs and traders I knew, could write code in their sleep. One of the more successful ones developed a whole suite of tools he used, in C. They can do your job if they have to, it's more lucrative for them to wheel and deal than deal with debugging and implementation issues. It boils down to what is the best use of their time. If every programmer disappeared tomorrow, they could learn programming and still get it done. They are Really Smart(tm)
c. CFAs and traders pretty much blow their career if they screw up and lose a billion dollars. A programmer can simply find a new job if their bug rates are too high. They also have a QA team to double check their work. You can see if software will or won't work easily. To know whether or not a market strategy will work requires a ton of research and risk. They are rewarded based on the amount of risk they take and the rewards they get when they are successful. When they fail big, they are truly effed. Your risk level as a programmer is nearly 0.
d. Their ivy league educations ensure that they have an old boys network with lots of friends in the same position to help with getting the best deals. If you don't have this, you aren't ever going to make the kind of money they do. The fact that they have this is invaluable to the firm they work for, and their clients. Hate to say this, but us programmers are replaceable. In the current job market we're a dime a hundred by comparison. Go ahead, quit. There will be 20 people lined up for your job, killing each other to get it, for less money than you make.
Bottom line, if you are unhappy these people make millions of dollars and you don't, go get your CFA. You won't beat them. The only way to play with the big boys is to become one. Getting your CFA and having connections is more valuable than landing an NFL player contract, and just as tough, if not tougher, because it takes talent and connections, not just talent. Good luck with that! If you managed to get your CFA, it's pretty likely without the connections, you'd end up as a research analyst making less than you do as a programmer.
Expecting to cash in on what *they* do with your software is a little unrealistic. If you wrote the same software tools for people without their talent and connections, it would be useless. You are basically like a trainer to an NFL athlete. It's the same kind of royalty->serf relationship. You are replaceable, they are one in 250,000. You can't do what they do and they would still be able to do what they do without you, just like a lawyer or a doctor.
Don't kid yourself. It's the size of the regexp AND how you use it that counts.
HF trading is going to euin the stock market. Arguments of the need for more fluidity in the market are absurd. It effectively syphons money from actual traders into the pockets of a few big players.The fact is that a VERY small % of the market is able to take advantage of a tool that the rest have no hope of ever using.
I can only hope it gets banned before it screws up everything.
Also note: part of the price for being a high-frequency programmer is generally living and working in New York City. It ain't all roses.
Part of the price???? You mean part of the benifit. There is no where better to live than NYC in America.
They generate profits by skimming money from lag.
How much of that salary is going offshore (outside of US)? I would wager a significantly larger percentage than if the money were more evenly distributed.
Suppose the money were divided evenly among those beneath him, and he took an even or slightly higher share. I'm not arguing if this is fair or not. I'm just arguing about circulation and systems.
So instead of one guy heading to Rio, they all head to the Jersey Shore... More money for the local economy yes? More money more evenly distributed among all involved yes? Greater localized ROI in local economic system yes? Multiplier effect for said economic system yes? This all sounds really good to me...
I'm not sure I'm much concerned about circulating wealth across global economic systems. We have enough issues right here, and there are even more vultures out there...
Opinion:=TMyOpinion.Create(Me);
If you are so good at writing trading algorithms, quit and run your own trades.
Your Econ-101 course would have been improved by including a copy of Animal Farm. In the lost epilogue, the pigs mint coinage to invest German efficiency into everything they were doing already.
The principle you seem to be ranting on here is that voluntary transactions create wealth, no matter how the transaction is instrumented (coins, jars of pebbles, jiggling twins).
Monopoly is the word we use to describe the situation where voluntary rubs noses with indentured servitude. If there's only one place to purchase food, well, no-one is forcing you to chose survival.
In high speed computing one tends to compute bisection bandwidth: given any way of partitioning the system, what is the maximum bandwidth across the partition boundaries.
The concept of monopoly is similarly fungible. The banking industry has sliced up the economic system so that one partition (the high velocity insiders) have access to first-mover advantage, and everyone else doesn't. One term in what constitutes voluntary trade has been supremely tilted in favour of a group that isn't working nearly as hard as they ought to relative to the resources they command, even if it does, as you point out, greatly enrich Columbian farmers who would otherwise have to grow vegetables.
If the glorious concentration of wealth directed equated to aggregate productivity, Russia would be a model economy.
I will say your recitation of why money in and of itself can't be blamed was superbly rendered.
On the other hand, somehow you didn't manage to notice that typing the query "apple suicide" into Google no longer brings up a fairy tale: it brings up Foxccon in the "I feel lucky" position.
As a programmer you need to stop whining. There will be people making money out of your code or using your code.
If money making is your goal you should quit programming and go into a money making job. And possibly die early of boredom or nervous maladies.
Do what you do best, don't whine but also don't be a fool.
I hadn't the slightest objection to his spending his time planning massacres for the bourgeoisie... (P.G. Wodehouse)
Welcome to the real world, where economics is not a zero-sum game. Just because somebody has more doesn't mean somebody else has less. Peddle your Marxism elsewhere.
To explain why your invocation of the term "Marxism" is incorrectly connected to the idea that economics is a zero-sum game, I refer you to one of the finer comments on economics (and, specifically, Marx) that Slashdot has seen.
"There is nothing in Marxism implying that transactions are zero-sum. Marx himself, in his sections on economics, is practically orthodox Adam Smith..."
(Of course, like the term "Socialism", when most people use it in current political discourse, it may be that the poster doesn't mean anything particularly well-defined by it, it's just a convenient term for something Those Other People Who Are Wrong And Ruining Things believe).
Tweet, tweet.
There are always people above you who are paid because they have to manage intangibles. They may be good, they may be crappy... in the end, it's all where the buck stops. I would take figures to be a programmer any day. To have all of my work be a single function of time would be awesome.
In my last job, I was frequently given impossible deadlines for vague tasks and insufficient resources. There was no such thing as overtime, there was no such thing as parceling off some of the work to some group. it was do or die.
Managing people and projects is always easy until you have to be the one to do it.
Do I think there are plenty of middle managers that aren't worth their salaries? Hell yeah. Executives too. But don't go around thinking they have an easy job.
The software I wrote kills thousands of people everyday, but I can be killed only once,sigh...
Why don't they work for themselves?
I'm not about to sell software worth $100k per day for $150k a year.
When I left Hot Topic, they made me sign something saying I'd never talk to the press about goth and mention that I had worked at Hot Topic. Doh! Back button! Back button!
If they wanted to make the big money for their work, they should of gone into the music industry.
Be seeing you...
I used to make six figures. I worked really hard for it, and I thought I was someone who deserved six figures. Times changed and I don't make six figures any more. I miss the money but not the stress. People who make that kind of money should not assume the will always have it, or that they deserve it. Things can change in the blink of an eye. I would be happy today with five figures. Money is a poor thing to base your self-worth on, but we tend to do it. How much we make does have something to do with our worth to the businesses that employ us, and how they leverage our skills in the market. It is a partnership when things are working right, and programmers don't usually have to pay when a customer cancels an order. Being part of overhead and having less risk gets you less money.
Stop whining guys. Isn't it obvious that employers prefer to hire wage slaves?
I'd like to buy homeland for our 10 million people. http://twitter.com/mahadiga
Such programs are straightforward implementations of not-so-subtle mathematical formulae.
A first year CS student could do it as a midterm project.
I would do it for fun and for free.
Getting a six figure salary for such a trivial and essentially harmful pastime is an extravagant privilege.
That is not new. Welcome to capitalism: http://en.wikipedia.org/wiki/Surplus_value