HFT/prop shops and personal accounts

D

ducatista

id like to apply to some hft firms later this year and am just wondering, would I still be able to trade my personal account? I've seen various restrictions imposed including no short sales, no short term trading (<30d), but these seem to apply mostly to big banks and HF's that trade the higher time frames. is it still the same for UHF firms?

currently I trade a few strategies on the daily time frame, many are held <30 days (few days to a few weeks). they're pretty much all equity and sector ETFs (SPX, GLD, VXX, TLT, etc). given the infrastructure requirement for UHF firms and the totally different approach in strategy types (low latency arbitrages etc) whereas my trades are mostly directional buy 'n hold, it seems to me there would be little conflict of interest, but idk what the law states here.

I don't run too many shorts so no worry there, but if I did want to could I replicate a short position via options and still be compliant? what about short ETFs? (short vol or short sector ETFs)

what's your own experience here?
 
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ducatista said:
id like to apply to some hft firms later this year and am just wondering, would I still be able to trade my personal account? I've seen various restrictions imposed including no short sales, no short term trading (<30d), but these seem to apply mostly to big banks and HF's that trade the higher time frames. is it still the same for UHF firms?

currently I trade a few strategies on the daily time frame, many are held <30 days (few days to a few weeks). they're pretty much all equity and sector ETFs (SPX, GLD, VXX, TLT, etc). given the infrastructure requirement for UHF firms and the totally different approach in strategy types (low latency arbitrages etc) whereas my trades are mostly directional buy 'n hold, it seems to me there would be little conflict of interest, but idk what the law states here.

I don't run too many shorts so no worry there, but if I did want to could I replicate a short position via options and still be compliant? what about short ETFs? (short vol or short sector ETFs)

what's your own experience here?
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Polling my team (half of our engineers have background in high-frequency market making), it varies between firm to firm. A holding period restriction is most common. Followed by symbol restrictions which may be in any combination of asset class (most common), market, and single names. Some firms require you to fill out a form in advance for any trades, and some firms require you to get each personal account approved. Hedge funds tend to be least lenient, whereas non-BD firms tend to be the most lenient.
 
ducatista said:
id like to apply to some hft firms later this year and am just wondering, would I still be able to trade my personal account? I've seen various restrictions imposed including no short sales, no short term trading (<30d), but these seem to apply mostly to big banks and HF's that trade the higher time frames. is it still the same for UHF firms?

currently I trade a few strategies on the daily time frame, many are held <30 days (few days to a few weeks). they're pretty much all equity and sector ETFs (SPX, GLD, VXX, TLT, etc). given the infrastructure requirement for UHF firms and the totally different approach in strategy types (low latency arbitrages etc) whereas my trades are mostly directional buy 'n hold, it seems to me there would be little conflict of interest, but idk what the law states here.

I don't run too many shorts so no worry there, but if I did want to could I replicate a short position via options and still be compliant? what about short ETFs? (short vol or short sector ETFs)

what's your own experience here?
More...

You definitely don’t want the reputation that you are spending more time/energy earning money in your PA than for the firm.
 
Databento said:
Polling my team (half of our engineers have background in high-frequency market making), it varies between firm to firm. A holding period restriction is most common. Followed by symbol restrictions which may be in any combination of asset class (most common), market, and single names. Some firms require you to fill out a form in advance for any trades, and some firms require you to get each personal account approved. Hedge funds tend to be least lenient, whereas non-BD firms tend to be the most lenient.
More...

so basically the answer is 'it depends', for each of the above variables. surprising to me - thanks for polling
 
newwurldmn said:
You definitely don’t want the reputation that you are spending more time/energy earning money in your PA than for the firm.
More...
ofc not. works comes first, these are largely automated TF strategies that don't require much oversight anymore anyway

iima, what's the policy at your firm?
 
ducatista said:
ofc not. works comes first, these are largely automated TF strategies that don't require much oversight anymore anyway

iima, what's the policy at your firm?
More...

It was 30 day holding period, no shorting, short options only as covered calls, long options had to be > 1y expiry, and couldn’t be on the restricted list.

further you had to call compliance, get approval, then have your supervisor sign off (that was the tricky part because you would get the look as to why you were trading for your PA instead of the firm account)
 
newwurldmn said:
It was 30 day holding period, no shorting, short options only as covered calls, long options had to be > 1y expiry, and couldn’t be on the restricted list.

further you had to call compliance, get approval, then have your supervisor sign off (that was the tricky part because you would get the look as to why you were trading for your PA instead of the firm account)
More...
wow, what a hassle
 
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