Gone are the days of unpaid internships; high-frequency trading (HFT) firms are now throwing absolute record sums to attract worthy interns.
Why the generosity? According to a Bloomberg report, these firms are seeking an edge in a market that is feeling the pinch from tighter derivatives regulations and a glaring shortage of artificial intelligence-linked stocks.
Additionally, the stock market has lost favour with investors and regulatory curbs aimed at protecting retail investors have severely squeezed derivatives volumes.
Who are these highly prized interns?
These highly sought-after interns, according to the report, are quantitative talent—young engineers snapped up straight out of the most prestigious engineering colleges. Their job would be to develop complex models and build strategies to identify profitable opportunities and execute trades at high speed.
Here’s how much companies are willing to shell out for these interns:
The paychecks for a standard two-month summer stint for these interns are mind-boggling.
People familiar with the matter told Bloomberg that Optiver Holding BV, a global heavyweight, is offering a whopping ₹60 lakh, while Graviton Research Capital LLP is paying its intern about ₹50 lakh for a two-month stint, up from around ₹16 lakh.
IMC Trading BV, an Amsterdam-based global firm, has also doubled its internship package to ₹50 lakh.
Quadeye, a Gurgaon-based firm, is ready to hand out ₹30 lakh ($31,346) per month. That equals ₹60 lakh for the two-month stint typically offered by high-speed trading firms, a massive fourfold jump from a year earlier.
For perspective into how wild this intern money is: the median annual pay last year for post-graduates from the Indian Institute of Management Ahmedabad (IIM-A), India’s top business school, was roughly ₹35 lakh.
So, an engineering intern at these HFT firms will out-earn a top-tier MBA’s yearly haul in two months.
“Start ’em young” strategy
“There is increasing aggression from global HFTs to hire straight from campus,” Daniel Vaz, a partner at the recruitment firm Aquis Search, told Bloomberg.
According to Vaz, these companies prefer to train young engineers from the ground up rather than recruit them later.
This is largely out of necessity. “Global firms are not finding candidates with adequate depth in lateral hiring for junior to mid-level roles,” Vaz noted.
The demand for talent, the report noted, is being further boosted by local HFT companies expanding into overseas markets and asset classes beyond equity derivatives.
Tighter Reserve Bank of India (RBI) rules have heavily impacted derivatives activity, Bloomberg said. Over at the National Stock Exchange of India (NSE), the average daily notional turnover for futures and options slumped to a 17-month low in July.
To add to the sting, a study published by the market regulator in August showed that proprietary trading firms, including HFTs, saw their gross profit drop 3% in the 12 months ended March, compared to a year earlier.
Although profits might be dipping and markets might be tightening, for an engineering student who can build a high-speed trading model, this is a very lucrative time to pursue an internship.
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