The code monkeys who create the algorithms for Wall Street’s high-frequency trading shops are demanding a bigger slice of the pie, reports Forbes. And while some are getting hefty raises, others are deciding to go out on their own in order to get a share of profits.
The article cites one programmer, Jeffrey Gomberg, 32, who left his low six-figure job writing code to cut a deal with HTG Capital Partners in Chicago. HTG provides the office space and access to regulated futures exchanges. In return, Gomberg gets to keep 40% to 80% of net profits, with the percentage rising with profits. Even more importantly, the programmers get to keep ownership of the code they write.
Another programmer, who preferred to remain anonymous, said he left his $150,000 a year job at a firm that was generating $100,000 a day from the high frequency trading software a group of programmers was writing. Together with a partner, he’s now getting 50% of the profits his software generates, with no limit on the upside.
The big firms and hedge funds are upping the ante, offering raises and total compensation of $200,000 a year or more to programmers in an effort to retain key talent. But that often pales in comparison to the profits the firms are raking in with their high-frequency trading programs.
However, now that these renegade coders are taking on risks similar to the traders themselves, it remains to be seen whether it will be a long-term improvement over the security of six-figure salary.
What’s your opinion? Should programmers get a bigger share of the profits that result from the code they write? Add your comments below.
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