Hired Talent: What are the Costs and Risks?

Have you thought about ways to objectively value your IP so you can make a good business decision about how to protect it? If you have strategies that cannot be traded without automation, I would think they have little (current) value to you and you have nothing but upside by having them automated by a competent programmer who may or may not violate your NDAs. In the end, though, it's up to you to come up with an estimate of how much it will cost you if the NDA is violated in differing ways so you know how much ROI you can expect from implementing different protection measures.

To reiterate some of the other posters, as a programmer I would seriously advise against trying to go from manual execution to 100% perfect automation in one step. You will get way more value from a good working prototype. You will find problems you couldn't have previously imagined and you will be in the game sooner to leverage your IP that is currently collecting dust at 10-100 times less cost.
 
Quote from achilles28:

HFT trading accounts for 70% of the volume on US stock exchanges. Clearly, it can be done. I don't mean to sound snobby, but I don't want an amateur. I want a pro. And I wouldn't use IB. Not sure yet, but at that level, a prime broker.
More...

I'm a software engineer... but mostly trader last 15 years.

Your average software engineer with 5-10 years experience...
In a major urban center makes about $75-80K + benefits...
This level person is WORTHLESS for HFT...
Can only be support role for HFT.

To design and code real-time HFT...
You need someone in the Top 5%...
In other words, a genius level person...
Plus you give the Genius 75K support engineer(s).

Now a genius level software engineer knows it...
Just like a MLB player KNOWS they're great (not AA).

And Top 5% engineers make 150-250K...
Coding Algo stuff in NYC...
Or GOOG or MSFT level stuff on the West Coast.

For someone like you...
It would even be impossible...
To differentiate a Genius from an 80K Drone...
Everybody is gonna lie to you...
And take you for a 6-12 month ride...
Before you realize the guy is worthless.

Would you be qualified to cast a Major Motion picture?
Or coach an NBA team?
Or hire lawyers for a Top Law Firm?
 
Hahaha.. make sure they are qualified to star in your own HFT porno movie before you host them to all your paying subscribers!
 
Quote from psytrade:

Hahaha.. make sure they are qualified to star in your own HFT porno movie before you host them to all your paying subscribers!
More...

Oh, I see... that's what all your web sites are about...
That's why you never even bother to finish them.

You are casting adult movies...
You gonna make all those small town Canadian girls a Star.

Like your new XXX feature "Trading For A Brighter Future"...
Screen tests must keep you and your friends very busy...
As for the girls... no movie, no fame, no future, too bad.

http://psytrade.com/
 
Quote from DeeDeeTwo:

I'm a software engineer... but mostly trader last 15 years.

Your average software engineer with 5-10 years experience...
In a major urban center makes about $75-80K + benefits...
This level person is WORTHLESS for HFT...
Can only be support role for HFT.

To design and code real-time HFT...
You need someone in the Top 5%...
In other words, a genius level person...
Plus you give the Genius 75K support engineer(s).

Now a genius level software engineer knows it...
Just like a MLB player KNOWS they're great (not AA).

And Top 5% engineers make 150-250K...
Coding Algo stuff in NYC...
Or GOOG or MSFT level stuff on the West Coast.

For someone like you...
It would even be impossible...
To differentiate a Genius from an 80K Drone...
Everybody is gonna lie to you...
And take you for a 6-12 month ride...
Before you realize the guy is worthless.

Would you be qualified to cast a Major Motion picture?
Or coach an NBA team?
Or hire lawyers for a Top Law Firm?
More...

i wouldnt say that 80k is a drone but rather entry level. and I dont think you have to be a genius but it is somewhat specialized. anyway, working for some guy who doesn't know what he needs isn't worth it to most capable people so you are out of luck
 
Quote from achilles28:

Like all good pigs, I want to maximize ROI for strategies that go largely unused, save a couple instruments scalped manually.

Automation holds great benefit: access to 30+ instruments during their regular trading hours, instead of ~2. Further, quick markets more suited to program trading can be accessed, instead of ignored.

My technical skills are few. I can write simple code and have done so for 3 strategies in AFL (Amibroker Formula Language). What I need is a competent programmer who can automate existing systems, and have them trade flawlessly, real-time. Here's a short-list of estimated needs:

- migrate strategies to C+(+)
- integrate strategies to various API's
- test and debug over several months
- ongoing monitor and administration
- ongoing system development (my own toys) and light optimization
- hardware acquisition and support
- security design and administration (can be outsourced)
More...
All that is perfectly feasible.

I'd rather suggest using the .NET environment for faster
and more reliable development, if target platform is windows
(c++ masochists please refrain from starting a language war ;-)))

The word "months" is completely out of place in a project of that kind.
<b>Years (and several)</b> is the right unit of measure.

I would not be much worried about intellectual property.
Anyone at that level has no problem figuring out by himself
strategies similar or better than those being implemented.

Just <b>focus on making as much money as possible</b>. That is all what matters.

Tom
 
Quote from rosy2:

i wouldnt say that 80k is a drone but rather entry level. and I dont think you have to be a genius but it is somewhat specialized. anyway, working for some guy who doesn't know what he needs isn't worth it to most capable people so you are out of luck
More...

$80,000 is a typical engineering salary...
Plus benefits could add another $10-20K...
The vast majority of software engineers...
Reach this mid-level in 5 years... and stay there forever.

Good web designers charge $50-60/hour...
And web design is super trivial compared to Algo development.

Here are some examples of positions...
Available ONLY to Elite Engineers in the Top 5% or so...
You must be BORN WITH the talent for these jobs:

http://www.quantfinancejobs.com/jobdetails.asp?JobID=10164

http://www.quantfinancejobs.com/jobdetails.asp?dbid=&guid=&JobID=10232
 
Let me give you some more specific suggestions:

<b>- migrate strategies to C+(+)</b>

if targeting windows, save time and $ using .NET, which is a more modern framework. Also considering future development.

<b>- integrate strategies to various API's</b>

you don't need initially to target several API. First focus on strategies, then eventually you may think about targeting multiple brokers.

<b>- test and debug over several months </b>

while the platform has to be able to do that, the focus is not on data quantity but on "diversity". A quick example: an entire year of tickdata of an instrument which is going down all the way will not be more useful than just 4 selected weeks with very different behaviors. The absolute worst enemy of algo development is <b>curve fitting</b>. Random generators are also an incredibly good helper. As well as resampling procedures to test strategy robustness.
<b>
- ongoing monitor and administration
- ongoing system development (my own toys) and light optimization
- hardware acquisition and support
- security design and administration (can be outsourced)
</b>
some of the above can be done by a different level of skills.

Tom
 
Quote from DeeDeeTwo:


...
Would you be qualified to cast a Major Motion picture?
Or coach an NBA team?
Or hire lawyers for a Top Law Firm?
More...
Funny, but a little unfair ;-))

After all if, as you are saying, the OP wishes to hire a "genius" it's because it probably complements other skills it has in a different field, and which the so called "genius" may not have. Like the capacity to talk to investors or attract capitals and so on.

Every person tends to grow in a specific direction, which is generally towards the things they consider most important and on which they focus and shape their mind since early age. Sometimes a so called "genius" may turn out pretty handicapped as to human relationships and entrepreneurial skills. So union is strength.

One of the reasons why algorithmical trading is not completely trivial is because it requires the right mix of skills in very different directions, so that one has a good balance of incredible attention to details and patience as well as an higher-level strategic view, deep thinking and also pragmatic attitude, algorithmic skills as well as understanding for data and models, passion for ideas and work, but also enjoying those ideas producing real wealth....

Tom
 
You must log in or register to reply here.
Back
Top