High frequency traders are writing their own cheques in Asia

Top performers are writing their own cheques as quant firms ramp up in China

High-frequency trading is on the rise in mainland China as quant firms ramp up their local presence. Jump Trading, Optiver and Tower Research Capital are all hiring talent in Shanghai amid a growth in commodity and equity futures trading. 

 “HFT firms are hiring traders, researchers and developers. They have open headcount targets because there’s a shortage of talent,” said Oliver Wherrett, a director at search firm Radley James. “Covid has accelerated the growth of systematic trading because of the strength of China’s economy throughout the pandemic”

HFT is currently limited in China to instruments such as commodity futures and equity futures, and top traders are being offered lucrative packages. These include a salary of around US$100K to US$200K, a signing on fee, then a share of trading profits.  In some cases, firms will divide the profit pool on a discretionary basis but increasingly some firms are offering the best traders a share of the profit and loss (P&L) that they generate.

How much depends on the trader’s seniority and track record. A trader’s success is commonly measured by the Sharpe ratio of the strategies they run, The higher the ratio, the more valuable the trader. 

“High-frequency traders with a Sharpe ratio of 10+ who are generating US$10m + in P&L can get paid a significant percentage of these profits with some firms offering up to 50% on any profits over $10m.” said Wherrett. “They'll probably have multiple job offers too.”

The most notable new entry into China is QuantBox Research, a high frequency prop trading firm started by one of the most successful and sought-after HFT teams in Asia, who have quickly gained significant market share in China commodity futures markets. “QuantBox are hiring across all skill sets and offer an extremely generous profit-sharing model for traders," says Wherrett. 

There is also hot demand for mid-frequency quant traders who can trade equities on the mainland. This is dominated by local firms such as Beijing-based Ubiquant Investment, Minghong, and High-Flyer quants which are borrowing technologies and algorithm models from abroad.

“Another hot area is for ultra-low latency C++ programmers with experience working on mainland exchanges likes CFFEX, DCE, SHFE and ZCE,” said Wherrett.

The likes of Two Sigma, Optiver, Jump and Tower are hiring globally – they have offices in Shanghai but may have the majority of their trading operations in the U.S.  Wherrett says that he’s seeing more and more Chinese nationals relocating from overseas having spent time honing their skills in the West. 

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