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I know this topic was posted before, but it's been a while and a lot has changed recently. I'm looking to hear primarily from active prop traders and those with first hand knowledge and experience; what are some of the best prop firms out there right now, and why? how has HFT and black box/grey box trading affected these firms' strategies and profitability? What are they now looking for in a new hire? and of course... chicago vs new york vs other: what's the best city for prop trading?

Comments (205)

  • Jerome Marrow's picture

    Wtf do you mean comp/hour? Do you think that the number of hours you work is a strongly significant factor in how much money you make?

    I don't think the firms are AS secretive as you think. People aren't going to tell you what their bonus was most likely, but that shouldn't be the discerning factor for you anyway--go somewhere that has some solid training program, is well capitalized, you feel like you can get along and work with the people who interviewed you, and will give you the opportunity because each of those firms has absurdly successful and wealthy traders that have plenty of F U money (since that is what everyone here talks about). Base salary.... I mean that is a pretty bad way to go about it IMO. For example, Belvedere (a firm not listed here, but is a big player in option MM) pays a relatively low/shit starting salary (mid/low 40s for clerks I think--that was a couple years ago though last I heard), but they have good traders that make a substantial amount of money and if you are good there, you will be taken care of just as well as any other firm. DRW pays more than that and so do a lot of firms, but that doesn't mean you ARE going to learn to be a better trader or that you will make any more money for yourself--possibly less even if you are stuck as a clerk for a long period of time and part of a large group with a different incentive/compensation structure.

    If you are at any of the firms listed, you can be making hundreds of thousands within 2-3 years of being out of school. I work at one of the firms listed and have friends at prob 6-7 others listed on there and there are more people than you would believe in the industry, 24-26y/o, that are making $200-400k++ after bonus (and a limited number that are way above that area even into the 7 figures). This is at a wide variety of firms.

  • absinthe's picture

    / is division. Trading firm hours vary quite a bit, generally 45-65. Making 1.5X at Firm A vs X at firm B, isn't necessarily preferable if the hours at firm A are atrocious. Some firms definitely have better reputations in terms of work/life.

    Also you make a good point, but outlier comp is, well, an outlier. The majority of traders probably aren't making 400k after 3 years, even at these firms. 200k is actually quite likely 2-4 years in at many of these firms. Median comp, or in the best case a weighted average of comp discounting the tails of the probability distribution, would be the best way to compare. It's also true that comp shouldn't be the only factor - exit options/brand name/training is all important, and I did factor that in somewhat to the list. It's not a perfect list, but I think it's a pretty decent attempt at ranking desirability of trading firms.

    I would add Belvedere to the list, but you quoted my post so I can't edit it...

  • In reply to Jerome Marrow
    juked07's picture

    Jerome Marrow wrote:
    Wait, you made this list based on what you perceive to be the ones with the best compensation? Oh boy.... I think that is a bad way to go about it to begin with (median compensation @ a trading firm.... really?), but this list would be substantially different. The salaries vary dramatically, even within the same firm, as do bonuses, which vary dramatically because of the amount of risk allowed to be taken, trading environment (group versus individual), strategies, individual skill, and more. It is just a silly way of going about it.

    How does variance make knowing the mean valueless? Or make knowing the median valueless? It's still certainly better than no information. Showing off that you know compensation varies (hardly uncommon knowledge), and implying that this means someone's list is terrible, really contributes nothing.

    On the other hand, if we had a decent list of median (or mean, or bounds, any metric really is better than nothing) entry level compensations at several dozen firms, many people would find that a very good contribution.

  • monkeysama's picture

    Jerome another quick thing that I want to mention. None of this is meant, at least by me (I don't know if I can speak for anyone else) to construe that one firm is better than another. To me it's kind of a weighted average of the chances of getting in and expected pay. I would be delighted to be interviewed at any of these firms, but when I'm allocating my networking time I have to have some mechanism to order them, as imperfect as it may be.

  • absinthe's picture

    Why did my list get monkey shit thrown at it?

  • In reply to juked07
    Jerome Marrow's picture

    juked07 wrote:
    How does variance make knowing the mean valueless? Or make knowing the median valueless? It's still certainly better than no information. Showing off that you know compensation varies (hardly uncommon knowledge), and implying that this means someone's list is terrible, really contributes nothing.

    lol you're right.... people should go off mean and median salaries for these firms, most of which have under 100 people in an office (I'm talking about total employees, let alone # of traders), most of whom have traders that haven't been around even 5-6 years, and have ranges among these low numbers of traders of under $100k/yr to the tens of millions for partners (some of whom are/were in their 20s at some of these places). You're right, that is a fantastic way to go about it. Even better, many (most?) of the firms listed have not even been around a decade. Yeah, the market is rapidly changing and has been nuts over the last 3-4 years, but you know what, go off the mean/median compensation, if you have it (I doubt even the companies keep that kind of data). That makes a fuckload of sense.

    My point was that the mean and median aren't going to be very representative because the samples sizes are so small and have widely variable populations (age, seniority, etc.). Seriously dude, you're a dumbass.

  • monkeysama's picture

    Ok guys come on. Don't downgrade each other on this. I've plussed both of you even though I think you don't deserve it.

    The list was a good one, if only for the fact that I learned about Five Rings Capital and may not have otherwise. The list is far from scientific and the rankings have probably an illusory correlation to reality. Fine, let's just move on.

  • trade4size's picture

    the 2008 list was written by someone not even in the industry anymore. someone that focused on exit ops and comparing firms but when it came time to talk about the market he said "we trade equity index volatility arbitrage". These lists are stupid.

    "Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

  • In reply to trade4size
    absinthe's picture

    trade4size wrote:
    the 2008 list was written by someone not even in the industry anymore. someone that focused on exit ops and comparing firms but when it came time to talk about the market he said "we trade equity index volatility arbitrage". These lists are stupid.

    Say Santa Claus gave you two offers. One is to work at Jane Street Capital as an AT, the other at Trillium. What would you tell Santa.

    The idea behind a ranking is simple - some firms tend to be more desirable/lucrative, and a ranking tends to be the best way to represent that albeit imperfectly.

  • In reply to absinthe
    monkeysama's picture

    Trade4Life wrote:
    trade4size wrote:
    the 2008 list was written by someone not even in the industry anymore. someone that focused on exit ops and comparing firms but when it came time to talk about the market he said "we trade equity index volatility arbitrage". These lists are stupid.

    Say Santa Claus gave you two offers. One is to work at Jane Street Capital as an AT, the other at Trillium. What would you tell Santa.

    How the fuck do you visit EVERY little kids' house in ONE night? Answer me fat man!

  • trade4size's picture

    Neither im quite happy where I am thanks. Thats such a dopey question anyway. JSC focuses on options market making and Trillium does directional based daytrading you cannot compare them. I am not going to be as nice about it as the others were in the thread. there are people that want to trade equities, and there are people that want to trade options there is no master list.

    "Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

  • In reply to trade4size
    absinthe's picture

    trade4size wrote:
    Neither im quite happy where I am thanks. Thats such a dopey question anyway. JSC focuses on options market making and Trillium does directional based daytrading you cannot compare them. I am not going to be as nice about it as the others were in the thread. there are people that want to trade equities, and there are people that want to trade options there is no master list.

    That's a fair point, but if you HAD (theoretically) a master list of firms ranked perfectly by compensation/reputation/ect, then someone looking to trade options could just consider the relevant firms and make a sub-list using the master list. Plus, creating multiple lists would be too cumbersome, especially since many firms trade so many products (just look at FNYS or SIG for example).

    My final view on lists - inherently imperfect, but not valueless.

  • trade4size's picture

    opposed to ranking the firms you should be focusing on what interests you then you should rank them accordingly.

    Things you want to ask yourself

    Do I want to trade a directionally or be arb focused.
    High touch vs algorithmic
    What products interest you
    What are the future prospects for this product, how has it changed in the past 10 years and where do you see it going in the next 10 years
    What is the firms attitude towards risk?
    How soon will you be able to be trading your own book?
    Are the firms team oriented or individual focused
    What is the technology at the firm like
    How well is the firm capitalized

    "Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

  • monkeysama's picture

    How do you find out how well a firm is capitalized? I thought that was secret since it's a prop firm and doesn't report it?

  • shorttheworld's picture

    lol i like how mr princeton boy is smashing on trillium since he knows i work there and to get at me for flaming him earlier about his attitude lol

  • happypantsmcgee's picture

    Its pretty pathetic that he can't just let the shit go after all this time...

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to happypantsmcgee
    absinthe's picture

    happypantsmcgee wrote:
    Its pretty pathetic that he can't just let the shit go after all this time...

    Curious - where would you rank Trillium and which firms would you push farther down the ranking. If Trillium moves up, then Group1/Consolidated/TransMarket all move down the list. All these firms are great, and if you are a great trader you will do well at all of them. Many great firms aren't even in that (highly subjective) top 25.

  • In reply to absinthe
    happypantsmcgee's picture

    Trade4Life wrote:
    happypantsmcgee wrote:
    Its pretty pathetic that he can't just let the shit go after all this time...

    Curious - where would you rank Trillium and which firms would you push farther down the ranking. If Trillium moves up, then Group1/Consolidated/TransMarket all move down the list. All these firms are great, and if you are a great trader you will do well at all of them. Many great firms aren't even in that (highly subjective) top 25.

    The whole idea behind ranking these firms, or any rankings for that matter, is stupid. I think this is particularly true for trading as your abilities dictate the comp and exit opps that everyone on this site stays up at night worrying about. Saying that if firm A moves up then firm B must move down is ridiculous. There is, just maybe, a case to be made that working at firm A is equal in many respects to working at firm B. The only situation where I can see any of this being even slightlly relevant is if you had offers at all 25 of the firms listed in which case you would be in a position to do whatever the fuck you wanted and it still wouldn't matter.

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to happypantsmcgee
    absinthe's picture

    happypantsmcgee wrote:
    Trade4Life wrote:
    happypantsmcgee wrote:
    Its pretty pathetic that he can't just let the shit go after all this time...

    Curious - where would you rank Trillium and which firms would you push farther down the ranking. If Trillium moves up, then Group1/Consolidated/TransMarket all move down the list. All these firms are great, and if you are a great trader you will do well at all of them. Many great firms aren't even in that (highly subjective) top 25.

    The whole idea behind ranking these firms, or any rankings for that matter, is stupid. I think this is particularly true for trading as your abilities dictate the comp and exit opps that everyone on this site stays up at night worrying about. Saying that if firm A moves up then firm B must move down is ridiculous. There is, just maybe, a case to be made that working at firm A is equal in many respects to working at firm B. The only situation where I can see any of this being even slightlly relevant is if you had offers at all 25 of the firms listed in which case you would be in a position to do whatever the fuck you wanted and it still wouldn't matter.

    Disagree.

    Bottom line, it's easier to make 7 figures at GETCO than Allston Trading even though Allston pays very well.

  • happypantsmcgee's picture

    Then when you get offers at GETCO and Allston you will have a pretty easy decision to make won't you? Godspeed

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • Jerome Marrow's picture

    lol you have no fucking idea what you are talking about, T4L....

  • In reply to Jerome Marrow
    happypantsmcgee's picture

    Jerome Marrow wrote:
    lol you have no fucking idea what you are talking about, T4L....

    Thanks for clarifying who that was addressed to

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to absinthe
    Jerome Marrow's picture

    Trade4Life wrote:
    Jerome Marrow wrote:
    lol you have no fucking idea what you are talking about, T4L....

    Care to clarify why you say that?

    Pretty much everything you have said in this thread is either irrelevant, wrong, or misguided. Your last post was icing on the cake.

  • In reply to Jerome Marrow
    absinthe's picture

    Jerome Marrow wrote:
    Trade4Life wrote:
    Jerome Marrow wrote:
    lol you have no fucking idea what you are talking about, T4L....

    Care to clarify why you say that?

    Pretty much everything you have said in this thread is either irrelevant, wrong, or misguided. Your last post was icing on the cake.

    Your opinion is that Allston is more lucrative than GETCO? I can think of one or two people who turned down very lucrative offers at Allston for GETCO.

    Also......you didn't know what division was...

  • In reply to BankingRUs9
    absinthe's picture

    BankingRUs9 wrote:
    Here are links to descriptions of 200 prop trading firms with firm descriptions and links:

    http://leverageacademy.com/blog/2009/11/10/181/[/q...

    Thanks. I've seen that list before.

    The problem is it's not very selective - many of those firms pay no base salary or have very substandard comp, although I'm sure there are some on there that pay well that I'm not familiar with.

    Also that list has TONS of scams/chop shops like Lynx Capital, and omits a few goods ones like Five Rings.

  • Zalfor's picture

    it is hard to rank companies because most people work at only one of these places.

    that being said, a lot of the comments on this thread are horribly wrong / based on incomplete information.

    that being said, most of these companies have different business models. that being said, get a job at these places first and then decide which one is better for you.

  • In reply to Zalfor
    happypantsmcgee's picture

    Zalfor wrote:
    it is hard to rank companies because most people work at only one of these places.

    that being said, a lot of the comments on this thread are horribly wrong / based on incomplete information.

    that being said, most of these companies have different business models. that being said, get a job at these places first and then decide which one is better for you.

    that being said, you say that being said a lot....haha no but seriously you made some good points.

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to Zalfor
    absinthe's picture

    Zalfor wrote:
    it is hard to rank companies because most people work at only one of these places.

    that being said, a lot of the comments on this thread are horribly wrong / based on incomplete information.

    that being said, most of these companies have different business models. that being said, get a job at these places first and then decide which one is better for you.

    True, but you don't have to work have to work at a place to know something about it. For example, I've worked at or interviewed with a dozen of those 25 firms, and have friends/acquaintances at about as many.

  • Zalfor's picture

    five rings capital is a great company started by an ex-jsc partner which does some carbon credit trading. definitely deserves a good spot.

  • Zalfor's picture

    in terms of helping out a college student making choices in terms of which places to apply for, i would definitely recommend applying to any/ALL of these firms and trying to get jobs and then deciding based on your personal experiences with each of these firms.

    i have also had good experiences with belvedere trading like other people have said on this thread. but I definitely don't know about a lot of the companies on that other person's list, so I don't know if it should be on the "top 25"

    As some advice for people who are still in college, trading is VERY PERSONALIZED. Don't choose a firm based on "perceived comp" or "prestige", but rather based on how well you think you will perform/thrive in a particular firm's environment. I know people who have turned down GETCO for chopper trading and people who are thriving at less "prestige" places while they would not have done well at "better" places. Trading is much more individualized than other industries, so don't let these rankings influence your decision too much.

    I think the list is fun, but don't let it hurt anyone's ego since no one cares about where you work when you're making millions. =)

  • monkeysama's picture

    Ooh! Ooh! Hire me! Over here! I want to make millions! :P

  • absinthe's picture

    Good points Zalfor. I forgot about Belvedere and Chopper.

  • Zalfor's picture

    IMO, FRC (five rings) shouldn't be so high since it so new. but I don't know much about their operations... they do pay well though. =)

    citadel should be on here somewhere... even though its a HF

  • In reply to Jerome Marrow
    juked07's picture

    Jerome Marrow wrote:
    juked07 wrote:
    How does variance make knowing the mean valueless? Or make knowing the median valueless? It's still certainly better than no information. Showing off that you know compensation varies (hardly uncommon knowledge), and implying that this means someone's list is terrible, really contributes nothing.

    lol you're right.... people should go off mean and median salaries for these firms, most of which have under 100 people in an office (I'm talking about total employees, let alone # of traders), most of whom have traders that haven't been around even 5-6 years, and have ranges among these low numbers of traders of under $100k/yr to the tens of millions for partners (some of whom are/were in their 20s at some of these places). You're right, that is a fantastic way to go about it. Even better, many (most?) of the firms listed have not even been around a decade. Yeah, the market is rapidly changing and has been nuts over the last 3-4 years, but you know what, go off the mean/median compensation, if you have it (I doubt even the companies keep that kind of data). That makes a fuckload of sense.

    My point was that the mean and median aren't going to be very representative because the samples sizes are so small and have widely variable populations (age, seniority, etc.). Seriously dude, you're a dumbass.

    The only claim I made was that this information is not "valueless." Personal attacks aside, would you like to demonstrate that knowing nothing is better than knowing the mean and/or median compensation numbers for a set of interesting trading firms?

    Best of luck to you!

  • Jerome Marrow's picture

    Mean and median earnings don't have value in selecting or rating trading firms for undergrads, so it is valueless. Besides that, the data isn't even available and the sample sizes would be too small and varied in population to be statistically significant.

  • In reply to absinthe
    Jerome Marrow's picture

    Trade4Life wrote:

    Your opinion is that Allston is more lucrative than GETCO? I can think of one or two people who turned down very lucrative offers at Allston for GETCO.

    Also......you didn't know what division was...

    Who says either one is more lucrative than the other? And if they are in 'different divisions', why the fuck are you comparing apples and oranges? In fact, who says they are even trading the same things and have similar enough employee pools to make this relevant?

  • PnL's picture

    great job on the list! huge contribution. you do understand that salaries at all of these places really only matter your first couple of years dont you? you dont get payed just for showing up like bankers do, you get paid for p&l. If you are printing $ you get paid regardless of the level of "prestige" at the firm you are working at. Once youve gotten a book and established yourself, nobody cares where you worked previously or even where you went to college. the FIRST thing we discuss when we look at experienced hires is "what's his track record?" Not "Did he work at JSC or DE Shaw (everyone get wet)?" Quit getting so hung up on these stupid rankings and either a) go work hard to get in to ANY of these places or b) if you are there, work hard to make $ and make yourself valuable. thats all that matters

  • In reply to PnL
    numm's picture

    PnL wrote:
    great job on the list! huge contribution. you do understand that salaries at all of these places really only matter your first couple of years dont you? you dont get payed just for showing up like bankers do, you get paid for p&l. If you are printing $ you get paid regardless of the level of "prestige" at the firm you are working at. Once youve gotten a book and established yourself, nobody cares where you worked previously or even where you went to college. the FIRST thing we discuss when we look at experienced hires is "what's his track record?" Not "Did he work at JSC or DE Shaw (everyone get wet)?" Quit getting so hung up on these stupid rankings and either a) go work hard to get in to ANY of these places or b) if you are there, work hard to make $ and make yourself valuable. thats all that matters

    In some of the top prop shops mentioned above, you ARE payed for just showing up. Even more so than bankers.

    If you're getting an entry level job straight from college, then some companies are definitely better than others, depending on base pay and the level of training that you will receive.

  • shorttheworld's picture

    yeah was gonna say if you can print the money anywhere in the end it doesnt matter-- each shop will orient you more to a specific type of trading though depending on whatever group you get into.

  • monkeysama's picture

    The best shop is the one that hires me. So if you guys want to be at the top of my list PM an interview!

    /That might be just crazy enough to work.....:P

  • GoodBread's picture

    Trade4Life, would you care to elaborate what the speculative/fundamental shops are? Do any of these shops focus more on trends and long-term stuff and require a less quantitative background?

  • In reply to GoodBread
    absinthe's picture

    GoodBread wrote:
    Trade4Life, would you care to elaborate what the speculative/fundamental shops are? Do any of these shops focus more on trends and long-term stuff and require a less quantitative background?

    Trillium, FNYS fit the bill.

  • shorttheworld's picture

    so how do you go from just getting an offer to becoming a professor with a mastery of knowing which prop shops do what? and i think the 'speculative/fundamental' needs a more detailed description as to what means by that.

  • In reply to shorttheworld
    absinthe's picture

    shorttheworld wrote:
    so how do you go from just getting an offer to becoming a professor with a mastery of knowing which prop shops do what? and i think the 'speculative/fundamental' needs a more detailed description as to what means by that.

    Discretionary trading of any product. Separate from market making, algorithmic trading.

  • trade4size's picture

    trade4life aka thisdude can you please just shut up and stop digging yourself into an even bigger hole. You have never traded a day in your life yet your coming off like a elitist know it all. Do you even have an offer yet? I would not want to be the guy sitting next to you.

    "Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

  • trade4size's picture

    LMAO bwahahaha thats hilarious PnL.

    "Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

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