Professional trading was never cheap. The barrier to entry for becoming a high-frequency trading firm is much, much lower than becoming a NYSE specialist was a decade ago. You could co-locate there for a few million dollars, which is small money all things considered.
Liquidity providers get paid to trade on most exchanges (maker-taker model).
ETA: That's not to say this is a good book. It's not. I'd recommend Vidyamurthy's Pairs Trading and Harris's Trading and Exchanges, but there really aren't many good books on this style of trading--anyone who knows how to do it well has no incentive to write a book on it.
I would gladly take such a position so long as the system seemed fair (e.g., seeing several long-term non-owner/management employees working there). The terms are spelled out clearly, and I'd rather work somewhere that I add value. If I can't make serious contributions in a couple months, then it's a bad deal for both me and the employer.
However, you might have trouble getting people with families to take the job, especially if they're relocating.
Instead of being fired or laid off, employees are put into "Milton" type roles where they are made to feel useless, or intimidated into quitting/committing suicide.
There's a line between workers' rights & social safety nets and making the employment market extremely inefficient. I think it's fair to use public funds to retrain employees who have spent years contributing to society, or even to provide them a temporary income so they don't have to worry for their family's future. Still, people generally want to do useful work, and keeping unproductive workers employed hurts them, other candidates, and the nation as a whole.
That's called dual trading and there are already regulations in place that prohibit the scenario you described. A broker must execute his clients' orders before his own.
In any case, most high-frequency operations are only trading for themselves.
Front-running is knowing an order is going to be inserted into an exchange's book, and sending your order before it; an example would be if a broker saw a client making a big trade and sent his order before the client's, hoping to profit when the market moved.
In most modern stock markets there is not tiered access. My order is just as good as anyone else's, and no participants are given unfair notice of another's orders. Firms can spend money and be more competitive in these markets (e.g. better analysts, faster systems, co-location), but anyone has a fair shot at competing. If an order is public, there's nothing wrong with me taking action based on it before you if my only advantage is superior technology.
If the person believed a natural counterparty would come along within milliseconds, why would he or she enter a market order rather than a passive limit order?
There are many high-frequency strategies, and front-running/manipulating markets might be one that unscrupulous firms engage in, but most would rather make legal money. The linked article doesn't make a lot of sense. For one, flash orders are no longer available on major exchanges, and secondly it's very difficult (and costly) to push most stocks 30 cents away from their fair value.
Most of the anti-HFT things I read are pushed by buy-side traders who have a hard time tricking the market into executing huge orders without moving the price, as if they ever had some natural right to do so. Trading is a competitive endeavor. If your poor execution algorithm shows your hand and someone more sophisticated notices, it's fair play for them to use that public information.
Technology has been disrupting Wall Street for years. Look at the NYSE / Archipelago reverse merger where a young, tech-savvy upstart ECN essentially took over the iconic New York bourse.
"In the old days, short-term liquidity was provided by specialists or floor-traders. In the past 10 years, their role has largely been replaced by sophisticated high-speed computer models. CNBC still reports live from the floor of the NYSE to preserve an outdated illusion for the public - the reality is the vast majority of the trading is now done by computers."
From Tradebot Systems' homepage (http://www.tradebotsystems.com/) - a proprietary trading group out of Kansas City that competes with major investment banks.
I disagree with the author's characterization of market-making as predatory. There are risks involved in providing liquidity, so there should be some cost, and as a purely competitive enterprise with many players, the costs will be very low. All brokerage houses allow you to submit your own limit orders if you don't want to pay the spread. I fail to see how a bunch of computer market-makers competing with one another to offer spreads tight as 1 cent are worse than the old monopolist NYSE specialist quoting in $1/16ths while seeing all order flow.
It's not that amazing. Amtrak is a quasai-governmental entity; airlines face a lot of competition. Planes fly longer distances and have no alternate way to get online. People on a 3-4h train ride might be satisfied with a Blackberry or iPhone.
Is that round-trip? I looked on Kayak and a round-trip flight tomorrow is at least $300. I don't think the busses and trains get so much more expensive at the last minute, but I could be wrong.
Not all automated trading or quantitative finance is high-frequency. A bank trading exotic derivatives OTC could use C# to generate quotes without a problem. There are at least a couple reputable prop groups I know of that use C# in real-time trading systems, but both are running more quantitative long-term strategies in options.
It's legal to disclose one's religion, marital status, and sexual orientation on a resume as well, but I think it would scare a hiring manager off.
Saying you're eligible to work somewhere is different than disclosing your nationality. One is a material part of the hiring process; the other is something people discriminate on.
Stick to the things that actually affect job performance. It keeps the process fair for everyone.
My friends have all had similar experiences, though most of them were interviewing straight out of undergrad, so it may have been a little different. Have seriously in-depth knowledge of the languages you claim to know, practice solving problems under pressure, and have a strong algorithmic foundation. They seem to have a reputation for being rude, but it's a competitive market and they're looking for the best.
Things are pretty similar where I work. We will look at most people if their resume lists the relevant technologies, but the phone screen and in-person interviews are very tough. There are so many liars out there that resumes aren't a very good filter. Even academic pedigree doesn't seem to count much in the software development world, though it counts more if you're doing more research-y/academic things like machine learning.
I don't really think so. You're really trying to measure the scale of your work. Better metrics would be what specifications you implemented, features you added, scalability (# of users or servers). You wrote 21k lines of code, but code wasn't your end result. That code did something beyond getting piped into wc, I hope. :)
GS isn't even top-5 on NASDAQ.
Professional trading was never cheap. The barrier to entry for becoming a high-frequency trading firm is much, much lower than becoming a NYSE specialist was a decade ago. You could co-locate there for a few million dollars, which is small money all things considered.