How lucrative is it working at a prop firm?
(Senior Gorilla, 846
Points)
on 9/7/11 at 9:01pm
I'm considering joining a prop trading firm (of course after obtaining my Series 66), but what can I expect to pull out yearly? If you could give me ball park figures from lower tier(the type that make you pay a down payment) to upper tier that be cool. I know it's based on your performance, but on average?





zero to a lot of fucking
zero to a lot of fucking money.
and that is the correct answer.
I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe
From trading equities to slanging wine in Latin America
A ship is safe in harbor, but that is not what a ship i
66 isnt relevant for prop btw
66 isnt relevant for prop btw (at most firms)
I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe
From trading equities to slanging wine in Latin America
A ship is safe in harbor, but that is not what a ship i
Lower tier that require a
Lower tier that require a capital contribution will usually have you walking away with less money than you started.
Upper tier firms you can make easy 6-figures, some 7-figures.
Many prop traders fail so I would imagine the average prop trader's income isn't too impressive a number.
Dammit STW, always gota beat
Dammit STW, always gota beat me to the punch :P
stw is pretty spot on. I know
stw is pretty spot on.
I know a handful of guys here in the city living off 2nd jobs or savings at prop firms and other just blowing money.
That being said the pay structure is poor for junior guys and there are no guarantees or benefits, difficult life but with nothing to lose it can be a great gig.
I see, thank you for the
I see, thank you for the responses. I've been told that 66 has recently been required for prop trading from someone who works at one. Perhaps it is just his firm?
You may be thinking of the
You may be thinking of the Series 56, which is a brand new FINRA exam for prop traders.
My bad, that is it. He was
My bad, that is it. He was exempt because he had Series 7.
Different shops are
Different shops are structured differently. At the higher end ones, you trade their capital and you don't put in any money. You are salaried, and you get quarterly (usually) bonuses based on performance (both yours, and the firm's). These guys tend to make the most money because the people those firms recruit are generally very smart, and very quantitative (phd's in math, comp sci, stats, etc), and they are trading huge sums of money. high 6 figures is not uncommon, some hit 7 figures. The owner / partners are doing 8 figures easily.
You have some middle of the pack shops that require you to front some capital to buffer potential losses, but you're still trading their capital. So you might have a low base salary, but the bulk of your earnings would come from a pre determined split of your p&l. Typically the low base isn't sufficient to keep you around long term by itself, so if you're not profitable, you don't stick around.
Then you have low end places that masquerade as prop shops, but are really just arcades. You pay a monthly fee for software / hardware, and benefit from economies of scale that they obtain by purchasing licenses and hardware in bulk. Generally you're trading your own capital, but you might be trading theirs. It tends to be more ad-hoc at these places. You also get to take advantage of their proximity to exchanges, their network speeds, their execution priority with broker / dealers & exchanges, etc. It's basically just a step up from trading your own money at home.
STW and djfiii's answers are
STW and djfiii's answers are what I've seen
Totally agree with
Totally agree with shorttheworld- the industry's returns are undoubtedly positively skewed with few making a killing in comparison to those getting weeded out. At the same time, it doesn't make prop trading any less lucrative; if you're bitching about meritocracy stick to accounting or BB Sales.
On a side note, none of the directional prop firms pay a salary past the first year.
"I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine."
id more so say that the only
id more so say that the only ones you really want to aim for are the ones that pay some sort of salary or dont require any capital contribution -- any contribution of your own capital, UNLESS AN EXPERIENCED TRADER MOVING SHOPS, is a sign of an arcade to me. you want to be seen as an asset thats been hired by the firm, not as a customer dropping money off.
I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe
From trading equities to slanging wine in Latin America
A ship is safe in harbor, but that is not what a ship i
Excellent responses. Thanks
Excellent responses. Thanks guys.