Working in high frequency trading (HFT) doesn’t hold the lure it used to. Knight Capital Group is shedding 100 jobs as Virtu Financial completes its $1.4bn takeover of the firm, while Sun Trading’s profits were down 21% on last year and pay slid to an average of $241k.
The latest firm to bust the myths surrounding the seemingly eye-watering packages on offer within HFT firms is XR Trading, the Chicago-headquartered firm with a small London operation. It has just filed its 2016 annual report on Companies House and it’s not pretty – the firm posted a $2.4m loss for 2016, down from being $188k in the red for the previous year.
Despite this, XR Trading has continued its slow build out of its UK operation. It now has 12 employees – six of whom work in trading functions – up from eight in 2015, and it continues to advertise for senior traders for its London office.
XR spent $3.4m on compensation for its UK employees, meaning an average payment of $289.7k in 2016, down from $383.9k in 2015. This is a bigger slide than at rival Sun Trading, which has 26 employees at its London-based operation which it paid $241k, down 8% on one year earlier.
It wasn’t too long ago that recruiters were talking up packages of $291k for Masters and PhDs with just two years experience to develop algorithms for HFT firms. But HFTs, which use speed and technology to gain an edge over other investors in the market, have been struggling across the board with the higher cost of tech infrastructure and lack of volatility in the markets.
HFTs have been consolidating – the biggest example being Virtu’s $1.4bn acquisition of KCG, which it completed earlier this month – and increasing their search for new revenue streams.
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