zyros
These are some common questions I get from Australian undergraduates.
Trading
Should I join a trading firm? I heard everyone is making a lot of money, and I like money!
Only if you get an offer in one of the high tier shops (Jane Street, HRT, Citadel Securities, XTX, Jump). If averaged out, the others will pay less than bigtech. My opinion is that if you’re an undergraduate in Australia, your goal should be to leave the country. So you should take whatever path you think will get you out of here and into the US, or a low-tax country with specific companies.
Australia pays comically low for software engineers compared to what is possible. For my company, if I took an offer in the US at the same level, I would be saving about 3x more a year. That is, one year in the US, for the same job, would be worth three in Australia. Why am I even here?
I worked in a lower-tier firm for a few years, and when I started interviewing around my experience was that recruiters would not know what the trading industry is at all. Yes, your 17-24 year old gooners are edging about trading, but the 40 year old hiring you doesn’t really care. Also, most of the work there is to do in trading firms is smaller scale (fix this bug, parse this market data) rather than some more long term problems in bigtech. Obviously, big tech has issues too, but at least the name-brand helps with leaving Australia.
Wait, IMC and Optiver weren’t in your list!
No, they weren’t. That’s probably controversial. IMC has had bad years where they paid senior software engineers less than graduates, so they aren’t consistent enough to beat big tech. I’ve heard of them requesting very significant work hours. I’m unsure whether they have a strong enough reputation to be useful for getting hired in the US.
Someone left our trading firm for Optiver, and within 3 months they left again because of the cultural issues. I’ve heard of a recruiter saying IMC “is the better dutch”, but they still manage to get years where they pay seniors less than graduates… From my understanding, at Optiver, for you to get a higher bonus, your manager needs to take bonus money from someone else on the team and give it to you. This results in toxic culture.
This is translated from Chinese, and refers to one of them:
Obviously these companies are still very good for a graduate, and better than what I had as a graduate, but let’s stop simping?
How do I get into a trading firm?
Go to one of the high QS-ranking universities (unfortunately, in my experience, it matters), and when you’re prompted with why you want to join, you should specifically say “I’m looking for a fast-feedback environment to learn in.” That’s the key thing that sets trading apart from other industries. Otherwise, go read:
- Max Dama on Automated Trading
- Red book / green book (for mathsy roles)
- All about high frequency trading
- Developing High-Frequency Trading Systems: Learn how to Implement High-frequency Trading from Scratch with C++ Or Java Basics
And take difficult courses, or audit them. Competitive programming, operating systems, compilers. Get interesting stories to talk about in clubs. Do mock interviews. Do 300+ leetcode questions.
C++ vs other language
One thing is people here over-weigh the value of C++ in my opinion. They see a lot of low latency job listing for C++ that are only in trading, and recruiters will try to highlight these jobs because to the layman they sound the most exciting. However, most of the profit isn’t really in C++, and most of the C++ is quite boring.
The two parts of a trading system that use C++ are usually the market data parsing and the live trading algorithm. Market data parsing is incredibly boring and not-ideal for your career to do for very long. Front office can be more interesting, but it’s unlikely you get allocated on something that becomes heavily profitable.
If a trading firm is really trying to compete on latency, they would use FPGA. Now you need to be an electrical engineer. If you’re competing on latency in C++, your entire moat can be removed by a large company taking their established FPGA system from overseas and plopping it into their data center. If latency is your crutch, it’s entirely possible your competitor just bribes a politician then gains 10 milliseconds in the infrastructure.
This isn’t to say there’s no interesting work in C++. There is, but there’s significantly less than you think.
Do people gulp do a lot of drugs in financial jobs?
At least not in quantitative finance, no. Most of the employees are KHHV nerds. However, if you mean a brokerage style firm then maybe/yes. These firms are closer to the wolf of wallstreet where they call boomers or go to rich people parties. At one company I worked, we had a brokerage firm across the hall from our office and had the full thing of beers at 4pm, very loud, very tall and 40-50 years old. This is extremely different from what you’d encounter in quant finance companies.
Companies
Is [International Company] an oncall centre…
When it comes to Australian sections of international companies you need to think about why they decided to open an office here rather than one in India, China, or America. America will probably have better talent for initially writing the software, and the others will have cheaper employees. If the company already has an office in the US, only boring, backwash work will appear in the Australian offices. Or, there’s something unique to do in the Australian office (e.g. trading, it can be easier for them to trade APAC markets, so there’s interesting work.
Aside from Atlassian or Canva, this has generally resulted in most bigtech companies just having oncall work or pointless work.
Is doing oncall supposed to be a bad thing? What is on-call?
Oncall refers to helping with customer issues, or internal business issues for your team. For instance your team’s service goes down and needs to be fixed, or you need to explain to someone how to use a feature of your system.
The upside of oncall is it can be a very fast way to learn a system. There’s a bug in production, someone needs to fix it quickly, and if you start fixing them quickly, you can gain a reputation of being the go-to for these issues. You can be promoted quickly and show knowledge of the broader system.
However, when the only thing you do is oncall it can be exhausting. Many companies have 24/7 oncall, so you need to wake up at 3am. Sometimes your team’s software is bad, now everyone is constantly blaming you for the system failing. Commonly there isn’t an extra incentive for doing it. Working oncall might get you promoted to mid-level, but it isn’t really a senior-level skill. So once you’re mid-level, its quite unappealing to be told most of your work will be oncall. If your company does treat oncall as a senior-level skill, that becomes a red flag again.
Is [Australian Company] worth joining?
This is for companies that are founded in Australia, and don’t have international branches.
Well, probably not worth joining. That being said, the market is practically impossible for graduates at the moment. Even referrals won’t really save you when RSP has 200 people a year gaming the system. I dunno. I’m glad to not be a graduate right now.
Wait, what are the tiers of companies?
When I say international vs Australian, I’m referring to companies that compete on the international market vs only their local market. You can go read https://newsletter.pragmaticengineer.com/p/trimodal-nature-of-tech-compensation
There isn’t such a thing as a strict definition of a tier list of companies though. If you show me one, I’ll probably be able to counter it. The teams vary too much within companies.
Misc
Actually why are you in Australia?
Well, I hope to leave soon, but the jist of it is that my time in trading was not very useful for being able to leave the country. I saw somebody with a bigtech company on their resume interviewing and they had a 10x easier time. They would get easier questions, and people would be happier to pass them through rounds. So I took one of the first big tech offers I got, and now I’m sitting around waiting to leave.
Can you write about [something very specific to me]
Probably not. I don’t want to put identifying information in here.
Does my university matter?
Yes. Maybe not within Australia, but internationally, yes. If you limit yourself to companies that don’t care about this, you might not be able to afford housing in 5 years with the way inflation is moving. The difference can be a 60k AUD graduate role and a 600k AUD one overseas.
Should I learn Data science / AI / Machine Learning?
If you asked me this 18 months ago, I’d be intensely against it. For undergraduates, I still mostly am. Unless your degree is Maths / Physics / Stats, there is a good chance the skills won’t be that useful. However, if you look at what makes bigtechs and startups successful nowadays… it’s usually recommendation systems. There has been a sprout of machine learning engineer (MLE) roles in a lot of companies, and there seems to be a lot of graduates going to that direction. This is good.
To learn these, you should roughly know {decision trees, SVMs, k-NN, PCA, Q-learning, neural networks, CNN, LSTM, GRU, roughly what attention is, gradient descent, regularization, activation functions} and more. Also it’s good to have built some stuff with {Prefect, Apache Airflow, Spark, PyTorch}. There’s a lot more to this; the Wikipedia page and introduction to statistical learning in python (ISLP) is a good start.
It’s also worth understanding there are essentially three types of these roles. The first is a data engineer, who just does ETL pipelines and this can be very boring. Next, is closer to an MLE, where you pick models off the shelf or train well-established things like xgboost; this requires understanding software engineering and machine learning concepts. Lastly, is a researcher role that requires a PhD where you’re creating novel approaches to problems.
There just isn’t a good way to learn these things in Australia in a way where your employer trusts you to do them. I feel in most Australian contexts, the company or education system cheaps out on their senior employees. Which is fair enough. These people can go to the US and earn 7-9 figures.
How do I pass probation or get a return offer?
Be a good culture fit, don’t have conflicts of interest, and don’t be unlucky. A lot of highly-esteemed places won’t care if you’re actually productive. You should be aware of whether they are filtering candidates (hire 20, keep 10), or if they have a minimum bar. The way to tell is to figure out what the available headcount is.