Career Advice: Pros & cons to relocate to Asia (HK/Toyko) for algo trading dev jobs

[QQQQ]

Hi,

I am currently working as a developer with a small internal startup of high freq prop desk in a mid-size broker dealer, with a good potential to become a prop trader in 1 or 2 years.

On the other hand, I might also have an opportunity to relocate to Asia to lead a small team of cash equity algo trading developers in a major global ibank.

Implications for option one: Opportunity to the business side. Total freedom of development standard Forget about climbing corporate ladder. Focus on PnL. No need to relocate. 50% potential for business failure. Out of job potential (North America entering recession). Fear of missing the boat to Asia. Dislike the company.

Implications for option two: Promotion every couple years (I assume). Focus on the IT side. Bragging right (managing people!). Big company. Opportunity to climb the corporate ladder. Much lower taxes. Not much chance to switch to the business side (I assume). Booming Asian economy. Out of job potential (outsource development work to cheap places like China/India). Considered a cost centre (?)

Question: If you were me what would you choose? Why?

Another question: if a headhunter comes to you with a job that you like but apparently not much better than your current one, would you go through the process to find out if you really like it or just tell them you are not interested? I had a few instances that I went through the process and finally got the offers but I rejected them (mainly due to afraid of leaving comfort zone and still uncertain if it's better than my current one). It looked bad on my part. And I probably burnt the future chance to be hired by the same company. What are your thoughts?

 

[Andy Nguyen]

QQQQ,
I'm not familiar with the Asia job scene so I will notify Niraj, one of our headhunters who specializes in the area to give you some input.

 

[alain]

Is "the opportunity" something real or something in the air? What do you want to do? My advice has always be, go to the busisness side but, from your post, I don't see anything that says that you will move to the business side but that there is possibility to move there. That seems really flimsy.

 

[QQQQ]

Thanks Andy.

Alain, the potential is there. The head trader agrees on that. But there are certain prerequisites, some on my side like exams, some on the firms side like headcount unfreeze. Of course even if all prerequisites have been fulfilled, there is no guarantee things would happen. Things can change. No one knows. It's up to myself how much to believe. From what I perceive, this is the closest you can get before you become a trader. They will get me licensed. That's not a problem. But I have no PnL responsibility until I am officially recognized as a trader.

 

[alain]

if going to the business is a real posibility, I will tell you to take that route... but that is only my opinion. You should decide yourself what you want to do.

BTW, this uncertainty makes you look bad as a trader. So it might be better for you as a person to go to the IT side. Also, the fact that you see managing people as bragging rights, means that it is important to you what other people think. So, IMHO, don't become a trader, you might not be cut for it.

 

[QQQQ]

Alain,

I completely agree with your analysis. I entered this industry purely by chance. I had no idea what an ibank was back then. If I had made a conscious choice, I would have probably had sent myself to a dot com company like many others at that time. Further proof that I am not a good investor. However, I do believe there is a difference between dealing with one's own and someone else's. I can be bold and decisive. :D

Back to the question. Do you think it's the best time to go to Asia for algo dev work? Many big banks are expanding their offerings there. If I don't go back now, would I miss the boat? On the other hand I can always find an IT job here if I want. But business side opportunity is not always there. If I go back to Asia, would it give me a big big push in my career in the longer term than I stay here?

 

[alain]

Dude, you need to make a decision yourself. I don't think you are that bold and decisive when you are struggling to pull the trigger.

 

[QQQQ]

Thanks Alain for your advice!

It is my research stage, not decision time. So I really look forward to seeing any information regarding the job markets and prospects in HK/Tokyo/Asia.

 

[Niraj]

Hi,

I am currently working as a developer with a small internal startup of high freq prop desk in a mid-size broker dealer, with a good potential to become a prop trader in 1 or 2 years.

On the other hand, I might also have an opportunity to relocate to Asia to lead a small team of cash equity algo trading developers in a major global ibank.

Implications for option one: Opportunity to the business side. Total freedom of development standard Forget about climbing corporate ladder. Focus on PnL. No need to relocate. 50% potential for business failure. Out of job potential (North America entering recession). Fear of missing the boat to Asia. Dislike the company.

Implications for option two: Promotion every couple years (I assume). Focus on the IT side. Bragging right (managing people!). Big company. Opportunity to climb the corporate ladder. Much lower taxes. Not much chance to switch to the business side (I assume). Booming Asian economy. Out of job potential (outsource development work to cheap places like China/India). Considered a cost centre (?)

Question: If you were me what would you choose? Why?

Hi QQQQ,

I've quoted your original post above to make it easier to refer to. Your post covers a lot so let me try and respond to each point in order.

1) Option one: to be frank only you can make a judgement call on this situation. You are correct that there is a lot of uncertainlty around what the markets are doing and it's clear that there is some time lag to when you can become a trader both due to external factors and exams etc. Until these factors change I don't think there is a real decision to make because it may or may not happen and until then you have what you have despite whatever your own or the head trader's intentions are. Therefore you can only really compare the position you have in hand to the one you have been offered.

2) Option two: Don't make assumptions about promotions every couple of yrs. Algo trading developers that I know work very closely with traders and promotions are largely on merit (& politics at some places) - not time served. As alluded to by Alain, the fact you see managing people as giving you bragging rights suggests to me that perhaps you are not ready to manage - will you still be seeing it that way when you go on vacation and one of your juniors punches a hole in your code? Think very carefully on this point because there's no point in going into a managerial role unless its something you really want to do (whatever the reasons) as opposed to doing it for the kudos. In terms of potential to move to the business side, in my experience this is quite realistic. Algo trading is a growing area and if you can show yourself to be a good developer and communicate well with the traders don't be surprised to be offered some PnL 1-2 yrs down the line. Booming Asian market - don't count on this being the case short term, e.g. India is down c20% this yr - however medium term the region is going in one direction. Cost centre - yes this is true but you are v close to the business and your input will be fairly transparent. Outsourcing to India / China - this is already happening in algo trading however there is always the need for a point man on the desk who can manage the resources and communicate with the traders, as the team leader that would be your job.

If I was you what would I choose? To be frank it is hard to say without knowing the specifics of your background, where you work now and where your offer is. Appreciate these are not things to discuss in public so feel free to PM me. Based on what you have disclosed I would suggest go to Asia if you actually want to go to Asia (whether thats for the lifestyle, career aspirations, family reasons, or for the experience or any other reasons) and do not base the decision on not wanting to miss some bandwagon or because you think the US economy is screwed. It sounds like you are in a decent enough position either way.

Another question: if a headhunter comes to you with a job that you like but apparently not much better than your current one, would you go through the process to find out if you really like it or just tell them you are not interested? I had a few instances that I went through the process and finally got the offers but I rejected them (mainly due to afraid of leaving comfort zone and still uncertain if it's better than my current one). It looked bad on my part. And I probably burnt the future chance to be hired by the same company. What are your thoughts?

It looked bad on your part only because you let the process get as far as the offer stage. If I had headhunted you then I would have wanted some clear reasons as to why you might look at my client's opportunity and for what reasons you would consider leaving your current employer. This is the screening headhunters are supposed to do but quite frankly most don't know how to or they are just happy you've said you are interested and then hope they can see the deal through.

After that conversation if I was satisfied that you should talk to my client I would have taught you how to ask the questions that uncover these details in the first couple of meetings.
This way you can know fairly early on whether you are interested to continue meetings or if you should pull out of the process before undue time has been invested in your candidacy. The sad thing is that you may have burned your bridges at the places you have rejected not because of the rejection itself but possibly the manner and timing of the rejection.

As an aside and without wishing to sound harsh, if you have had a few instances that this has happened and then you turned them down due to not wanting to leave your comfort zone, then this does raise serious questions about your decisiveness (as well as the ability of the headhunters you dealt with to screen you) and ability to elicit key decision making information (in the case you are not sure if the offered position is better than what you have). On that last point it's worth noting that you can never have all of the facts before moving jobs and there is an element of best judgement coupled with a small element of 'leap of faith' that what you have been told is true. But then what trader has all of the info he could possibly need before pulling the trigger?

 

[Andy Nguyen]

It's one heck of a post, Niraj. I didn't know you cover the algo space as well as FICC.

Do you happen to know the regulation for trading in the Pac-Asia region?
What kind of exams and regulation you have to clear before you can become a trader?
While we are on the discussion of Asian market, do you have any insight on the equity market in Vietnam? I'm from that region and would like to know what kind of positions are available there. Last time I check, very few big banks have their operations set up there yet. The few there are mostly retail banking and small private capital management shops.

 

[QQQQ]

Thanks Niraj for your detailed response!

Do you have any information about the pay level for equity algo development work in HK at the senior to lead level? Is performance bonus usually a big part of the comp structure for this type of work in Asia? A year ago, a HK headhunter told me that usually one has to take a paycut to work in Asia from the western countries. Is that the case?

Given the current state that many investment banks are planning to cut thousands of people in the following months/years, do you see or have seen Asia being affected in this particular field (algo)?

An observation I have with the nature of Asian stock markets is that they are in general not very algo friendly yet. Correct me if wrong. How much room do you think there is for this type of business in the next couple years? Or do you think it will stay as small niche for a while to go?

Regarding management role, I believe if one goes on the IT path, making progress up the corporate hierarchy is the way to go. I don't want to code until I am 65, or my work get outsourced to India/China. That's the natural path. Sooner or later you have to move on. Certainly if I am a trader, I care less how many people I manage. I focus on how much money I make and hope for an early retirement. That is two different paths for two different professions.

 

[Niraj]

Andy - I don't know specifically what exams / regualtion needs to be cleared to trade - I only get involved at Associate level and above so the traders I have helped hire were already trading, therefore already passed whatever needed to be passed so I paid no attention to it.

Re Vietnam - not had any direct exposure to the equity market there; 90% of what I have done is in HK or Singapore, rest in Tokyo and aside from the algo stuff its all FICC. Most of the larger banks will have a small sales / structuring unit in Vietnam - maybe 2-3 guys, perhaps the odd trader doing local markets stuff. As I understand it the derivatives market in Vietnam is v underdeveloped so there is much less PnL there than places like Taiwan, Korea, India etc.

 

[Niraj]

Do you have any information about the pay level for equity algo development work in HK at the senior to lead level? Is performance bonus usually a big part of the comp structure for this type of work in Asia? A year ago, a HK headhunter told me that usually one has to take a paycut to work in Asia from the western countries. Is that the case?

Pay level - can be quite variable, depends on the house and these days how hard they've been hit by the market (globally). Likewise performance bonus can be a big or small part of the pay structure, if you are a developer whose models are generating good PnL then it can be a big part, however if you are pure IT i.e. working on the infrastructure, systems etc then it will be as you would expect for a middle office role.

Re paycut - in general what I see is a gross reduction but a net increase, due to the low tax environment.

Given the current state that many investment banks are planning to cut thousands of people in the following months/years, do you see or have seen Asia being affected in this particular field (algo)?

I haven't seen any evidence of cuts to algo trading & related areas; it's normal that the banks will use this environment to get rid of underperformers but otherwise no evidence of scaling back the business.

An observation I have with the nature of Asian stock markets is that they are in general not very algo friendly yet. Correct me if wrong. How much room do you think there is for this type of business in the next couple years? Or do you think it will stay as small niche for a while to go?

I agree to an extent with this. Most of the algo market / teams are centred around Japan becuase it is a more mature, more algo friendly market. Having said that over the last couple of yrs there has been some significant movers into HK which I take as a signal that Asia ex-Japan markets are becoming more useable for algo trading. Certainly the people over there are qute optimistic that algo type trading will continue to grow in Asia.

Regarding management role, I believe if one goes on the IT path, making progress up the corporate hierarchy is the way to go. I don't want to code until I am 65, or my work get outsourced to India/China. That's the natural path. Sooner or later you have to move on. Certainly if I am a trader, I care less how many people I manage. I focus on how much money I make and hope for an early retirement. That is two different paths for two different professions.

Agree with this statement and that if you are going to be pure IT then management route is the way forward.