How much does a HFT trader typically make?

[MarkBrown]

Quote from WinstonTJ:

I don't believe that you should be able to make money when someone else can't just because you are an insider and have different access...

ok step outside your body and minute and become mechanical. think what you said - spoken like - a democx, loser, jealous, commie, ignorant, wannabe, educated therefore entitled, get the picture.

i was just like you and part of me still is i was brought up with that kind of thinking and one day a my mentor changed my life and i stopped worrying about how i wasn't making it and others were.

i focused on admiring those who could and started to chase after them and was determined that if they could do it so also could i. i focused on me being the problem not them. it was a slow painful process but i turned myself around and what you posted just shows your really lazy and don't want to work for it.

in fact your pissed that others who have worked for it have it and you don't so you want to frigging outlaw it and make so no one can if you can't. just great now you can get back into your body i'm done with you. work hard make money that's it don't do the blame game.

if working hard to make the money to have a better setup is being an insider than i am one.

m

 

[WinstonTJ]

With all due respect, I think you got me wrong on this one

My numbers are lower than yours (about half) but some of that is because of choices (like we want 3x Bloombergs but really don't need any of them, we have a nice office and almost never use it, the LLC pays for a lot of things that double-dip into other businesses that the partners engage in, etc.).

We also pay 8% for capital which is a little bit of a double-dip in terms of fees & expenses since we split equally but since one person provides 100% of the capital we decided to pay that rate.

I wouldn't say that I'm not making it at all - quite the contrary. I've just made a life decision that I want to do something different and positive rather than destructive and non-productive.

If you are ever in NYC or around NYC shoot me a PM. I'm happy to open up all the strategies and explain them. I'm in the process of documenting and I'm going to post it publicly over the next few months.

I'm getting out of finance (trading) and have moved into the IT space as well as working with (and volunteering at) non-profits and I can tell you that it is so much more satisfying to do something positive rather than leech money out of the markets and contribute to something that is ultimately destructive and extremely scary.

I'm also thankful (and very lucky) that I can afford to have this opportunity at such a young age. Ironically, I guess I have HFT to thank on that one.

Quote from MarkBrown:ok step outside your body and minute and become mechanical. think what you said - spoken like - a democx, loser, jealous, commie, ignorant, wannabe, educated therefore entitled, get the picture.

i was just like you and part of me still is i was brought up with that kind of thinking and one day a my mentor changed my life and i stopped worrying about how i wasn't making it and others were.

i focused on admiring those who could and started to chase after them and was determined that if they could do it so also could i. i focused on me being the problem not them. it was a slow painful process but i turned myself around and what you posted just shows your really lazy and don't want to work for it.

in fact your pissed that others who have worked for it have it and you don't so you want to frigging outlaw it and make so no one can if you can't. just great now you can get back into your body i'm done with you. work hard make money that's it don't do the blame game.

if working hard to make the money to have a better setup is being an insider than i am one.

m

 

[WinstonTJ]

Quote from MarkBrown:ps i would like to also correct that after all related expenses it really works out to about $11 a minute per 100,000.

Even the revised number seems too high. I'm a bunch lower than $11/minute.

I have no idea if you are trading futures or equities (or both) but for argument's sake I'll assume that its equities and the least common denominator is a typical NYSE 6.5 hour session.

6.5 hours in a trading session = 390 minutes

390 * $11 = $4,290 per $100k of BP

Again, going with the least common denominator, you can get Portfolio Margin at Interactive Brokers with $100k which gives you ~$660k on margin. (I don't know ANYONE who is running an ATS on $25k cash @ 4:1 for $100k BP but I suppose that could be possible.)

So if you have $660k on margin you and your partner are taking home $28,314 per NYSE trading session?

That's $7M per year which means that you would EASILY be able to prime at any decent bank with $500k or even $1M which would put your BP in the range of conservatively $3.5 million

@ $3.5 million BP that's $150,150 per 6.5 hour trading session. (or $37 million dollars per year - take home to you and your partner)

I have a very hard time believing that you are making $40M per year (take home assuming split equally between you and your partner $20M pre-tax cash = $10M cash take home in your pocket) and you are posting here on ET about it.

I'm not trying to be a jerk and call you out but your numbers don't make sense... Please tell me you "only trade the first & last 15min" or something...

 

[syswizard]

Quote from WinstonTJ:


I'm not trying to be a jerk and call you out but your numbers don't make sense... Please tell me you "only trade the first & last 15min" or something...

also someone asked what the std-dev is - there is none to speak of.

And this is now starting to sound the alarm bells - no Std Dev and this in a world where there are no certainties. If there is no STD DEV, then he's got the proverbial "Holy Grail".

 

[Peternam]

Quote from syswizard:

And this is now starting to sound the alarm bells - no Std Dev and this in a world where there are no certainties. If there is no STD DEV, then he's got the proverbial "Holy Grail".

If those numbers were for real, he wouldn't be posting on ET ...

 

[gmst]

Quote from Peternam:

If those numbers were for real, he wouldn't be posting on ET ...

why not he might be bored, once you have a functioning blackbox ready and implemented, you spend your day supervising the blackbox, some new research etc. and its friday afternoon.

Having ET on a screen and typing out few things during the day is fun.....it doesn't has anything to do with success.

There are many bank traders here on ET who post regularly.

 

[WinstonTJ]

Quote from syswizard:

And this is now starting to sound the alarm bells - no Std Dev and this in a world where there are no certainties. If there is no STD DEV, then he's got the proverbial "Holy Grail".

My number is MUCH smaller than Mr. Brown's.

Assume a 7hr trading session on the NYSE (15min prior, 15min post)

7 * 60 = 420 minutes of trading

As a group of 3 the net take-home (pre-tax) is closer to $4-$5/minute after overhead & expenses.

I think I have a really good thing going.

 

[gmst]

Quote from WinstonTJ:

My number is MUCH smaller than Mr. Brown's.

Assume a 7hr trading session on the NYSE (15min prior, 15min post)

7 * 60 = 420 minutes of trading

As a group of 3 the net take-home (pre-tax) is closer to $4-$5/minute after overhead & expenses.

I think I have a really good thing going.

Winston, what do you trade ? Stocks, Futures ?

What the game is about ? Rebates, stock/options market making, index-stock basket arbitrage ?

Just curious. Thanks for sharing.

and if you don't mind you said you are still young. curious how old you are and how long did it take you to build up your black box and infrastructure

 

[syswizard]

Quote from WinstonTJ:


I think I have a really good thing going.

Yes you do, and you say you are quitting ?
Actually, I'm doing the reverse.
I'm in IT right now...and it stinks due to all of the outsourcing and insourcing....
I'd much rather be auto-trading, building and testing algos, measuring results, etc.

Man, is this "Trading Places" or what ?

 

[WinstonTJ]

Quote from gmst:

Winston, what do you trade ? Stocks, Futures ?

What the game is about ? Rebates, stock/options market making, index-stock basket arbitrage ?

Just curious. Thanks for sharing.

and if you don't mind you said you are still young. curious how old you are and how long did it take you to build up your black box and infrastructure

NYSE book mostly, all stocks & ETFs & MLPs

Rebate stuff, etc. if you search some of my recent posts you'll see my most recent "pics of trading station" and each strategy is laid on on its own VM and they are all named, etc.

i was born in '79

Quote from syswizard:Yes you do, and you say you are quitting ?
Actually, I'm doing the reverse.
I'm in IT right now...and it stinks due to all of the outsourcing and insourcing....
I'd much rather be auto-trading, building and testing algos, measuring results, etc.

Man, is this "Trading Places" or what ?

Its BS - swaps & synthetic products (the crap I helped create) have pushed the market correlation close to 1. MM's and dealers know that and exploit it with ETF orders, volume, order flow, etc.

Too many insiders know the schedules of insiders, bankers & politicians - everything is digital and viral so everyone knows. It is a giant pump & dump.

I think the next 10-20 years gives us a fully digital infrastructure. For example, we now see wireless on new TVs but we don't have mainstream technology to provide reliable wireless streaming capability. Pushing 10G over copper or Wireless GIG speeds, etc.

Data centers will explode as social media goes bust - storage density has started to plateau but CPU density and architecture is still in the early days.

Long-term data centers will have some challenges and eventually fade but shorter-term they will thrive.

Over the very long term I think infrastructural advancements (and things like acts of terror or national security threats) will crush centralized data centers and push for much more of a micro-cloud concept. We don't have the cash or even human capital at this point to take our connectivity infrastructure back to the drawing boards and start from zero.

Regarding switching from IT to finance - when they start charging for cancels there will be no more steak dinners.