Man Vs. Machine: The New Kings Of Wall Street
Host, "Fast Money Halftime Report"
The rapid-fire growth of high-frequency trading, HFT, has spawned a new breed of market mavens whose backgrounds are far different than the traditional suit-clad Wall Street titans.
Their resumes are rich in rocket science and other non-financial fields and they may never have traded a stock, read an earnings report or scrutinized a balance sheet.
They are engineers, mathematicians and computer scientists—armed with cutting-edge technology and often located hundreds of miles from New York City.
Take Adam Afshar.
He's made several big trades in his life, but none bigger than the one that brought him to Atlanta. In 2002, after 12 years at Bear Stearns, he gave up his glamorous Wall Street office for an industrial park just outside the city, where he started Hyde Park Global Investments , a high-frequency hedge fund that trades its own money and bears little resemblance to the traditional trading firm.
He's the only one in the firm with Wall Street experience. Hyde Park's handful of employees are primarily Phd's with more expertise in physics than finance. They're mostly mathematicians and scientists, who design algorithims to trade faster than any human can.
They have no analysts, traders or portfolio managers, and Afshar says none of that matters. He says, thanks to technology, he can compete with the biggest Wall Street firms.
Jeffrey Wecker is also cashing in on the rise of the machines. He runs New York City-based Lime Brokerage, which provides the infrastructure for many of the largest high-frequency trading firms. On any given day, Lime is responsible for nearly five percent of the total daily trading volume in US equities.
And like Hyde Park in Atlanta, its rank and file are more likely to wear pocket protectors than tailored suits.
The supply of computer-savvy workers on Wall Street has never been greater, thanks in part to programs now being offered at top universities. In New York, students can earn a masters degree in Financial Engineering through a program affiliated with NYU .
That's just what Allan Maymin did. He graduated last year and just landed a job as a quantatative analyst.
"The future of Wall Street, in my mind, is computer on computer action, says Maymin. "Humans come in, they check their stuff daily, and it's just computers battling intraday."