Are financial programmers under paid?
- Thread starter nitro
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If you feel you are "underpaid" and if you are so good, why don't you design your own system that trades all day for you while you are sipping pina colada at a beach in the Bahamas?
My guess is just that at some stage you actually need traders to help build and implement the system, coding is coding. Like this GS dude, he maybe a genius programmer but he had no background in markets. He got lucky he got hired by Goldman otherwise he would be making a lot less.
My guess is just that at some stage you actually need traders to help build and implement the system, coding is coding. Like this GS dude, he maybe a genius programmer but he had no background in markets. He got lucky he got hired by Goldman otherwise he would be making a lot less.
Huh? What does me programming a FIX engine or some other programming job have to do with my skill to be able to write a profitable trading system? Do you realize that most financial programmers don't even know what a call or put is, or very little if anything about markets? (to the chagrin of their employers)
Do you realize that a city bus driver makes $75k/Yr. Or that a GM line worker makes upwards of $85k/Yr? Do you realize that toll booth collectors make $20/Hr? Or I can name numerous jobs that require almost no education and are mostly blue collar jobs that pay equally or better than software engineering?!!
Now, I am not saying that those people should be payed less. But should a city bus driver make 1/2 of what even a decent programmer makes? What incentive do people have to go into an engineering career?
No offense, but I am not sure you even understand the issue.
i don't think you can compare government job salaries as they are nowhere near free market rates. in fact there are entire industries devoted to arbing government spending inefficiencies. a case could also be made for anything heavily unionized. give me infinite money (government) and i'd gladly pay my programmers 3-4x what i pay my bus drivers. alas, it's only socialism for one side, cutthroat free market capitalism for the rest of us... and in this sandbox, you only get paid what you're worth.
Your argument of infinite amount of money can't be the case. I argue that per employee and importance and complexity of job done at a typical trading firm, a programmer at these trading firm generates way more revenue than say a programmer at Walgreens, but financial programmers pay is nowhere near based on that because there is no direct way to quantify a programmers contribution to the bottom line. And yet, everyone knows that without their code, none of modern finance works. For example, the human resource people at these firms often make about the same as an average programmer, and maybe 75% of what a good programmer makes. Or how about the office manager? None of those people are anywhere near as close as a programmer to the revenue generation (I argue that programmers are as close as traders!), and they are not government employees making the same as programmers.
The reason is not government "infinite" money that sets bus driver salaries or unions that set pay, at least in my experience. It is that we sell ourselves out too easily, and hence set market prices for ourselves. The trend is already to go into other disciplines than programming, and will continue to decline if I can aim a bus for $70k a year 9 to 5, instead of spending four years of college or more, $150,000 in school loans, 12 hour days, and then continuous training to keep up with a rapidly changing and maturing science.
BTW, my experience is that the discretionary trader is a dying breed. It is mostly programmers and maybe a trader or two overseeing systems. Even at these places, the pay is far too low. Anyone doing anything even close to complex programming work, like exchange connectivity, FIX engines, high frequency messaging systems, etc, should not make a dime less than $150,000 base in Chicago, and $300,000 base in NYC.
If you are, you sold yourself out too cheap.
If you are, you sold yourself out too cheap.
Yes discretionary traders are a dying breed at IB's and institutions but there will always be room for them in smaller structures. Besides not being a programmer or program trader I would say most programs do mostly the same things, that is why investing a program is like investing in the market, buy and hold, you hope past patterns will continue and generate enough profits. A program will never be able to incorporate all the things a discretionary trader uses to make decision.
Jeebus, what a way to load a poll.
I do not believe financial programmers are underpaid. Yes, they are privy to a lot of knowledge. Yes, if they did it themselves they could make a lot more money.
But the key factor is that they aren't. They are trading away the potential increased reward for the stability of a salary.
The premium that the traders make off of their labor is the gain from the additional risk that the traders take.
Most programmers simply do not have the risk tolerance of a trader, and that's why they don't make more. The few who do eventually become traders themselves.
I do not believe financial programmers are underpaid. Yes, they are privy to a lot of knowledge. Yes, if they did it themselves they could make a lot more money.
But the key factor is that they aren't. They are trading away the potential increased reward for the stability of a salary.
The premium that the traders make off of their labor is the gain from the additional risk that the traders take.
Most programmers simply do not have the risk tolerance of a trader, and that's why they don't make more. The few who do eventually become traders themselves.
And there's the catch - the vast majority of people in any field do not walk on water - they're average. But they don't believe that - not many people have the courage to admit to themselves just how replaceable they really are.
I see all these posts from people, and seriously it shows lack of knowledge of the modern industry of financial markets.
Let me tell you of a firm I worked for in Chicago. There, as a trader, you get a base salary and a discretionary bonus. The salary is say $50k. You are not trading your own money, in fact, you are not even really trading at all. You work in a pit, and make markets based on the theoretical values that your handheld computer is giving you. So in effect, you are almost a monkey. Your other job is to relay information back to the vol fitter what is going on in your corner of the pit.
These guys made between $250k and $500k a year after bonus. These "traders" didn't risk a dime of their own capital, they don't come up with models. In contrast, the best programmer employee at this place makes $50k/Yr plus bonus and he makes a boatload because he is compensated like a trader, but the rest of the programmers are strictly salaried with a very much capped upside. If we saw $120k it is a miracle.
The point is, put "trader" in your position role and you don't have to do anything special and make a boatload of money doing almost nothing.
Traders reward traders because most of these places have a disdain for programmers. It is a fraternity.
Let me tell you of a firm I worked for in Chicago. There, as a trader, you get a base salary and a discretionary bonus. The salary is say $50k. You are not trading your own money, in fact, you are not even really trading at all. You work in a pit, and make markets based on the theoretical values that your handheld computer is giving you. So in effect, you are almost a monkey. Your other job is to relay information back to the vol fitter what is going on in your corner of the pit.
These guys made between $250k and $500k a year after bonus. These "traders" didn't risk a dime of their own capital, they don't come up with models. In contrast, the best programmer employee at this place makes $50k/Yr plus bonus and he makes a boatload because he is compensated like a trader, but the rest of the programmers are strictly salaried with a very much capped upside. If we saw $120k it is a miracle.
The point is, put "trader" in your position role and you don't have to do anything special and make a boatload of money doing almost nothing.
Traders reward traders because most of these places have a disdain for programmers. It is a fraternity.