Larry Tabb, in yet another interesting column, writes:

"Quant secrecy also is about supply and demand. The number of quant developers has been far more limited than human traders. When trading was first automated, the number of traders who understood computers was just about the same as the number of computer scientists who understood financial markets--virtually zero. Today, the number of human traders is on the decline, as the number of quant programmers is on the rise."

These quant programmers are increasingly seen a type of trader. At most broker dealers, programmers, often highly talented and educated in non-financial sciences, they were quickly deployed directly to the trading floor when they were called traders, though everyone knew what they did. But there may be some of these programmers who somehow internalized that they really were traders.

One programmer recently charged with trying to steal proprietary code from his former employer was reportedly bent on using the pilfered code to set up a trading operation overseas, to be run by himself. As if it were that easy.

Tabb notes also: "Building out a quant platform increasingly takes many specialists. From hardware to software; from messaging to market data; from storage to speed, firms will need many experts to analyze, normalize and create a quant infrastructure. There will not be any one master who can develop, integrate and implement all aspects of this infrastructure. There are too many moving parts, too much complexity and too much investment necessary for a firm's core infrastructure to be pilfered or replicated without significant time and investment."

My sense is that as quant programmers are increasingly commodified this will become less of a problem.

For more:
- here's the column in Advanced Trading

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