JPMorgan is hiring high-frequency traders for a new 'AI Markets Lab'

JPMorgan has begun to see electronic trading firms as direct competitors. Last year, it cut some of its lending to Jane Street after it made a push into credit markets. In April, Jamie Dimon called Citadel Securities a "new competitor." Now, the bank is taking the fight to their turf by building a new 'AI Markets Lab' focused on high-frequency trading (HFT) and mid-frequency trading (MFT) strategies.

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The bank has hired Xi Chen, a professor at NYU, as a managing director to lead the team. He spent the bulk of his career in academia,and was named in the 2017 Forbes 30 under 30 for his work on "machine learning, high-dimensional statistics and operations research." He has published multiple studies on dynamic pricing and also spent two years as a principal scientist at Amazon focused on the forecasting, pricing and recommendation systems of its marketplace. 

AI Markets Lab sits within the bank's QTR (Quantitative Trading and Research) group and has 12 openings across New York, London and Singapore. Job listings say the AI lab "spans signal research, pricing, market-making, execution, portfolio construction, risk management, and the production systems that support them." The bank did not respond to a request for comment regarding whether the team is (or will be) actively involved in trading, but job listings for quant researchers say that they're expected to "design, backtest, and implement market-making and risk-taking strategies." It's not clear what assets the team will be expected to trade; the Quantitative Trading and Research group as a whole trades credit, FX, equities, commodities and across "a wide range of markets."

Chen said on LinkedIn that the team is looking for more experienced people who "have been full-time in HFT or who have extensive [AI] pre-training experience." Openings for engineers request experience in low-latency C++. There's stiff competition for the kind of talent JPMorgan wants to hire; Jane Street and Citadel Securities each paid over $2m per head to their employees last year. AI labs like OpenAI have also been poking around.

Despite the growth of electronic market-makers in the past few years, there are some areas banks still have control over. Crisil Coalition Greenwich analyst Jesse Forster said in June that "strongholds" for banks include "bespoke and structured solutions, prime brokerage, and financing products." Generally, they have control when there is minimal electronification. Efforts to increase the bank's electronic market-making capabilities could be seen as either a pre-emptive effort to keep control of those sectors should they become electronified, or a proactive strike to take back some market share from its newest rivals.

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