Greed is good — but geeks are better.
Wall Street is desperately seeking high-tech trading talent to run the new high-speed computerized trading desks that are wiping out thousands of more traditional jobs.
The scarcity of geek talent is driving up compensation for rocket scientists and younger pros with a handle on modern trading — just as old-school traders are being squeezed out of business.
Annual salaries for the black-box quantitative developers, for example, start at over $1 million, while high-frequency, algorithmic traders and other pros can pull down a base of $200,000 — along with breathtaking bonuses of as much as 100 percent (or more) of base, one top headhunter revealed to The Post.
The problem, according to headhunters who are scouring Ivy League campuses: Not enough top-shelf trading candidates.
“I have a big whiteboard in my office right now with the top nine trading positions: One spot is paying a million dollars, one is paying $400,000, another is paying $200,000, and it goes on. These are all $200,000-plus paying jobs,” Kyle Ramkissoon, a top head headhunter and principal at IJC Partners in New York, told The Post. “My challenge is that we have a shortage of qualified candidates.”
The big banks and brokerage houses, grappling with lower trading volumes and a regulatory profit squeeze, have lately stepped up their game. They are slimming down and replacing their trading personnel with higher-productivity math and IT geeks from MIT, Carnegie Mellon, Harvard and other brainy institutions. In the 12 months to August, New York City’s financial-services sector has continued to lose thousands of jobs, according to the Bureau of Labor Statistics. Many of the nearly 7,000 cuts were at trading desks.
“We have seen many banks cut where they need to cut, and there is more bloodletting to go,” Ramkissoon said. “At the same time, banks that are cutting staff are also hiring new groups.”
“Back in the early 2000s, the joke used to be that Wall Street trading departments are soon going to be hiring rocket scientists — and now they are,” said Jim Toes, chief executive officer and president of the Security Traders Association. Toes, a former high-ranking Merrill Lynch trader, said banks are shaking up departments — for example, replacing three-person teams in the equity and options markets with one high-tech pro.
Toes advises rookies looking for work to learn about the new high-speed electronic markets. “High-frequency trading has created one virtual marketplace where money is flowing between futures, equities and derivatives,” he said.
Ramkissoon’s office has openings and Hollywood-level compensation for high-frequency, algorithmic and equity options traders, in addition to a quantitative developer, a credit portfolio manager, an equity and credit strategies portfolio manager, and other lucrative slots.
“If I could fill 20 percent [of the jobs], I wouldn’t be talking like this right now. I would be retired,” Ramkissoon said.
That’s not much comfort to the old guard. Michael Caputo, 50, last year closed his trading operations on the floor of the New York Stock Exchange. The new regulations and trading networks had hammered his business.
At the peak, this popular 20-year NYSE vet employed 12 trading personnel. Caputo himself was making as much as $1 million in a good year. When the business started to crumble, his lifestyle went with it.
“I had the big home on Long Island, I had all the toys that went along with it. I had the boats and cars, and family vacations were a fairly regular thing,” he said. “When the money dried up, everything came to a screeching halt.”
Meanwhile, it’s a wonderful world for many Ivy League nerds. Ramkissoon said in his 16 years as a headhunter he’s seen nothing like the number of qualified candidates snubbing his job entreaties.
“Yesterday I reached out to 69 senior quant analysts,” he said, describing pros who develop trading-related strategies. “Only 14 have gotten back to me. They are content where they are working at now.”
(20thCentury Fox)