Quants in finance were traditionally underpaid. However, not all quants are alike, and some are rewarded more than others. If you work as a quant in model validation your pay is being squeezed by automation. But if you build high frequency trading algorithms, this has been your year.
A new survey by recruitment firm Selby Jennings suggests that quants working in high frequency trading and market making have big bonus expectations this year. Quants in other areas are a lot less optimistic.
The hope that bonuses will increase by 50% comes after an excellent year for high speed trading houses like Virtu Financial, which have made record revenues in 2020. One London quant headhunter said many of the high frequency trading firms have "made an absolute killing" and that this will be reflected in bonuses across the industry.
Key players in the high speed electronic market making space include Virtu, Tower, Hudson River, Citadel Securities, DRW, Mako, Jane Street, and G-Research (more of an algorithmic research house than anything else). Some are already known to be huge players - G-Research hires graduates on salaries alone of £150k ($200k) (plus a bonus) and Jane Street pays its graduates a $200k annual base salary, plus a $100k sign-on bonus, plus a $100k-$150k guaranteed performance bonus.
2020 is therefore likely to confirm the electronic market makers as some of the most lucrative places for quant talent. - Presuming, that is, that bonus expectations are met. Unfortunately, there's no guarantee this will happen: "Clients are wary of paying over the odds for strategies that were successful in the bizarre Covidness of 2020," says one headhunter. "It's only a few years ago that the VIX was down at 10 and none of the volatility strategies were making any money at all."
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