If you want to work in high frequency trading now, choose your employer carefully. The lack of market volatility has meant most firms have struggled and consolidation among big players – notably the merger between KCG Holdings and Virtu – has resulted in some big job cuts.
But there are winners in this scenario. And, according to accounts released this week, Jump Trading and Hudson River Trading are two firms that continue to perform, hire and pay their staff well.
Jump’s 2016 results for its international operations were out today. It increased headcount by 44.6% over the course of last year, to 68 people and made bigger investments in front office and development staff than it did in support functions.
Jump said that it made “significant investment in personnel”, and this has resulted in some big staff costs. It spent $75.7m on its employees last year, on just 68 people. This works out as an average pay packet of $1.1m. However, it also spent $70.2m on 47 employees in 2015 – or an average payment of $1.49m. Its highest paid director received $1.38m in 2016.
This increase is in spite of a reduction in profits. It made $27.2m for its international operation last year versus $39.6m in 2015.
Hudson River, meanwhile, has the majority of its operations within its Chicago headquarters and is one of the biggest HFTs, and has said it accounts for 5% of shares traded in the U.S. every day. As HFTs consolidate, Hudson River is buying – it’s reportedly exploring a deal to buy rival Sun Trading, according to the Wall Street Journal.
In London, though, it remains relatively small, with just 12 employees, according to its 2016 accounts released earlier this week. This is one more person than it employed in 2015, however.
Hudson River has also done better in 2016 then the previous year. It made £6.9m ($9m) in profits last year, compared to £1.5m ($2m) in 2015. It paid its staff an average of £470.9k ($615k), which is broadly in line with the previous year.
Generally, HFTs have been struggling. Most of their revenues stem from the U.S. and they’re expected to be $850m this year, according to figures from Tabb Group, which is a massive drop from the $7.9bn they made in 2009.
KCG Holdings takeover by Virtu earlier this year has been particularly brutal on its London operation, which we understand has lost 70% of its headcount since the deal. So far, the fall out of senior staff has been beneficial to investment banks. Robert Crane, its head of electronic execution, has joined HSBC, Graham Wayne, the head of EU electronic trading, has joined Barclays and Goldman Sachs hired its chief technology officer, Mike Blum, for its electronic trading arm.
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