Daily Tech Snippet: Tuesday, February 23

A New Breed of Trader on Wall Street: Coders With a Ph.D.: While traders at large investment banks watched their screens in horror, at Jane Street, a bunch of Harvard Ph.D.s wearing flip-flops, shorts and hoodies, swung into action with a wave of buy orders. By the end of the day, the E.T.F. shares had retraced their sharp falls. “It’s remarkable what they can do,” said Blair Hull, a founder of an electronic trading firm who relies on Jane Street to make a market for his recently started E.T.F. “If you look at who provides this kind of liquidity these days, it’s fewer and fewer firms.” It is not only Jane Street, of course. Cantor Fitzgerald, the Knight Capital Group and the Susquehanna International Group have all capitalized on the E.T.F. explosion. And as these firms have grown, so has the demand for a new breed of Wall Street trader — one who can build financial models and write computer code but who also has the guts to spot a market anomaly and bet big with the firm’s capital. In a word, these are not your suit-and-tie bond and stock traders of yore, riding the commuter train into Manhattan. They are, instead, the pick of the global brain crop. Here is a small sample of Jane Street’s main traders: Tao Wang (doctorate in philosophy and finance from the National University of Singapore), Min Zhu (master’s in chemistry, Columbia), Brett Harrison (master’s in computer science with a focus in artificial intelligence, Harvard) and Srihari Seshadri (bachelor’s in computer science, Carnegie Mellon). Jane Street was founded at the beginning of the previous decade, when a couple of option traders and a computer expert left Susquehanna to start their own business. Harnessing Ph.D.-toting mathematicians to the most powerful computers money can buy has become the accepted way for hedge funds and banks to get a trading edge these days, but Jane Street takes this marriage of high tech and high intellect to a new level. Writing computer code, or at the least being conversant in the firm’s program of choice, OCaml, is a requisite for all traders. Indeed, new traders must complete a monthlong OCaml boot camp before they start trading. And to the degree that the super-shy Jane Street does has have a public face, it belongs to its chief technology officer, Yaron Minsky, who givesfrequent lectures at Harvard, M.I.T. and Carnegie Mellon, promoting the firm’s ability to manage risk by developing the best software around.

• A Do-It-Yourself Revolution in Diabetes Care: John Costik got the call at the office in 2012. It was his wife, Laura, with terrible news: Their 4-year-old son, Evan, was headed into the emergency room. His blood sugar reading was sky high, about 535 mg/dl, and doctors had discovered he had Type 1 diabetes. The first three days in the hospital were a blur during which the Costiks, engineers in Rochester, received a crash course in managing the basics of diabetes care.For starters, they were told to log their son’s numbers on paper forms. It was their first hint that diabetes management did not occupy a place on technology’s bleeding edge. The methods for guesstimating carbohydrate intake also seemed imprecise, Mr. Costik found, and the process generated a lot of wasted data.“The last thing you want to do is find some form and fill it out,” he said. “You’re really just emotionally trying to cope with it, and that data in that book isn’t necessarily useful to the people with diabetes.” Several months later, Mr. Costik fitted his son with a Dexcom G4 continuous glucose monitor. A hair-thin sensor under Evan’s skin recorded an exact blood sugar reading at five-minute intervals, 24 hours a day.But all that data left with Evan every morning when he headed off to day care. Mr. Costik wanted something better: continuous access to his son’s glucose readings.So he examined the device’s software code and wrote a simple program that transmitted the monitoring data to an online spreadsheet he could view on a Web browser, Android mobile phone or, eventually, his Pebble smartwatch. Now, as consumer gadgets weave themselves ever more tightly into everyday life, patients and their families are finding homespun solutions to problems medical-device manufacturers originally did not address. Industry executives say the pace of user-driven innovation was one reason the Food and Drug Administration recently reclassified remote glucose-monitoring devices, hastening approval for new models by big companies like Dexcom and Medtronics. James Wedding, a civil engineer who lives outside Dallas, saw Mr. Costik’s Twitter post and used his code to set up a remote monitor system for his daughter, Carson, who is now 12. Lane Desborough, an engineer in California, got in touch with Mr. Costik after seeing his tweet, ultimately creating an open-source system based in part on Mr. Costik’s code. It allows anyone to hack existing glucose monitors so they transmit readings to the cloud, where they can be read by patients and caregivers.Mr. Desborough called the project Nightscout. The Nightscout group onFacebook, known as CGM in the Cloud, provides free tech support for users trying to improve on monitoring devices.About two dozen users have even started a project called Open APS, in which they are pairing insulin pumps with glucose monitors in an effort to create an open-source artificial pancreas system. These wearable devices, which automate insulin delivery, are being tested in academic settings, but these early adopters are not waiting for the results of those continuing clinical trials.Mr. Costik now works at the Center for Clinical Innovation at the University of Rochester, where he works to improve management options for all patients; Mr. Desborough is now the chief engineer at Bigfoot Biomedical, a start-up in Palo Alto, Calif., that plans to create an artificial pancreas.

• Fitbit Forecasts Miss Estimates on Global Rollout of New Devices: Fitbit's current-quarter profit forecast missed Wall Street estimates by a wide margin, as the wearable fitness device maker aggressively invests in new products, sending its shares down more than 16 percent in after-hours trading. The lackluster guidance overshadowed the company's comfortable quarterly revenue and profit beat in the holiday shopping season. Fitbit has been diversifying its portfolio of colorful wristbands and clippable devices that track calories, sleeping patterns and heart rate, to better compete with rivals as well as to tap new markets and demographies.The company last month unveiled its $200 smartwatch, Blaze, to mixed reviews. Earlier this month, Fitbit announced a new wristband, Alta, to appeal to the more fashion-conscious customer.  Fitbit's net income attributable to common stockholders rose to $64.2 million, or 26 cents per share, in the quarter, from $11.9 million, or 19 cents per share, a year earlier.On an adjusted basis, the company earned 35 cents per share. Revenue nearly doubled to $711.6 million from $370.2 million.Analysts on average had expected a profit of 25 cents and revenue of $647.8 million. Fitbit's revenue forecast of $2.4 billion-$2.5 billion and adjusted profit of $1.08-$1.20 per share for 2016 was largely in line with expectations.Shares of the San Francisco-based company were down 15 percent at $14.04 in after-hours trading on Monday after closing up 5.9 percent.The stock, which has lost nearly 70 percent of its value since hitting a high in August, has been trading below the June IPO price of $20 all this month.

• Amazon Raises Minimum Order Size as It Seeks More Prime Buyers: Amazon.com Inc. is increasing the minimum order size for free shipping to $49 from $35, a step that could encourage more consumers to sign up for Prime, the online retailer’s annual service that includes two-day deliveries. The benefit of getting more people to sign up for Prime services -- for $99 a year -- is that they tend to shop more frequently and spend more money, while access to other perks such as online movies, music and other content helps to keep customers within Amazon’s shopping ecosystem. By encouraging non-Prime customers to spend more on a single order, Seattle-based Amazon is also aiming to reduce costs while boosting profits on each sale. The new threshold follows a 33 percent jump in fulfillment costs -- warehousing, packaging and shipping -- in the fourth quarter, which outpaced a 15 percent increase in product sales. Monday’s price increase is the first since 2013, when Amazon raised the threshold to $35 from $25. Amazon’s new minimum order size for free shipping brings it in line with Wal-Mart Stores Inc.’s online store, which has a threshold of $50, or free pickup in stores. Target Corp. has a $25 minimum, while it’s $35 at startup Jet.com Inc.