HFT is generally divided into three categories – Arbitrage, Execution Strategies and Non-Arbitrage or Quantitative Strategies.
Major HFT Strategies
- Arbitrage Strategies involves pair(s) of stock/securities which can be traded profitably with minimal risk.
- Execution Strategies are mostly done by brokerage houses which are trying to capture either spread, or minimize impact cost, or something similar for the client.
- Quantitative Strategies are a wide domain which encapsulates almost everything else. Market Making would be a popular example in this category.
Banks and brokerage houses like ICICI Securities and Kotak Bank in India would be the employer in the Execution Strategies category. They would expect you to write/modify the existing code for VWAP/TWAP etc. Knowledge of these strategies, along with market microstructure and programming skills would be essential to perform well in this role.
Other HFT firms generally focus on Arbitrage and Quantitative Strategies. The list of such firms is big, but you can consider looking at roles in the top firms.
Top HFT Firms in India
- Tower Research (Gurgaon)
- Goldman Sachs | India (Bangalore/Mumbai)
- Morgan Stanley in India (Mumbai)
- Way2Wealth Illuminati Securities Private Limited (Bangalore/Mumbai)
- iRageCapital (Mumbai)
- Estee Advisors (Gurgaon)
- Quadeye (Gurgaon)
- Acceletrade Technologies
- Dolat Group (Mumbai)
- Edelweiss (Mumbai)
- APT (Gurgaon)
- Open Futures (Delhi)
- WorldQuant LLC
- Samssara Capital Technologies
Emkay Global, ShareKhan, BP Wealth, Nirmal Bang, Angel Broking, Phillip Capital, Motilal Oswal, Ambit Capital.
This industry offers 4 kinds of primary roles for developers.
Job Roles for Developers in HFT and Algo Trading Industry
- Quant Analyst / Model Developer
- Strategy Developer
- Networks/System Administrator
If you are interested in building models yourself and want to apply for quant analyst/ model developer role, pick up quantitative skills with working knowledge of using quant tools such as R, Matlab, Python.
For strategy developer role, you would be expected to either code strategies, or maintain and modify existing strategies. Most likely you would be working with a quant analyst who would have developed the trading model and you would be required to code the strategy in to execution platform.
Core development work which involves maintaining the high frequency trading platform and coding strategies are usually in C++ or JAVA. Hence honing your C++ or core development language is definitely an essential.
And finally for the trading role, your knowledge of finance would be crucial along with your problem solving abilities. If you are good at puzzles and problem solving, you will enjoy the intricacies and complexities of the financial world.
Choose a Right Course for Yourself
How to choose between a course like E-PAT or a Masters in Financial Engineering as a better choice?
This question mainly depends on the following factors:
A Masters in Financial Engineering (MFE) would be a 2 years long programme part time or at least a one year long full time course. E-PAT is a 6-months long programme designed for working professionals with facilities of watching recorded videos.
MFE is a course in Financial Engineering which covers various aspects of the financial tools and applications. If you want to get into Financial Markets and Securities industry, you would still need to learn topics which would not be a part of MFE course. Those topics are covered in EPAT as it is a specialized program for Algorithmic Trading.
Skills vs Theory
If you are looking for a more theoretical approach and want to go for PhD later on, then MFE might be a better choice. EPAT is more hands-on, created by industry experts to share their practical insights from their own on-going trading experiences.
This post was originally a reply by QuantInsti Director Mr. Sameer Kumar on Quora:
If you’re a retail trader or a tech professional looking to start your own automated trading desk, start high-frequency trading training today! Begin with basic concepts like automated trading architecture, market microstructure, strategy backtesting system and order management system. You can also enrol in EPAT, one of the most extensive algorithmic trading certification programme available in the industry.