Is trading in HF/prop shops the overall most profitable career, and if so, will it still be the case in the coming years?
Hi, I've been lurking this site for some time and there are some things that I'd like to clear up.
Like most students here (presumably) I'm searching for the type of career in finance that can grant the highest potential earnings. After asking people and looking around, I came to the conclusion that "sales and trading" was where one could make the most money in the shortest amount of time.
Now, I have a few questions.
- Is the golden age of trading (perhaps finance in general) over, and is it going to decline in all senses of the term in the coming years? I know post-2008 people have been complaining about decreasing compensations, but is automated trading done by quants going to replace trading jobs? I don't really understand where to draw the line between highly quantitative trading and conventional human based electronic trading (not floor trading), and how compensations differ. Nowadays, do you need a math, stats or CS degree to be a trader, or can you study traditional finance/economics?
- One thing I don't understand well either is "sales". Apparently, sales guy = broker. Is this true? If so, when people say that sales is the most lucrative part of finance, do they mean brokers are the ones pulling high six figures/seven figures?
Overall what I'm looking for is clarification when it comes to the aforementioned careers, in terms of earnings and evolution in the coming decades.
If my question isn't appropriate here, I'd appreciate it if I could be redirected elsewhere.
Won't address your questions directly because I have opinions but I can't say they're facts.
However, I will say I'd be very careful saying trading/sales are the most lucrative careers and trying to go into them for that reason only - sales (and trading) take a certain kind of person to do really well and if you're not that guy, those careers can be extremely short-lived and financially unrewarding.
"Like most students here (presumably) I'm searching for the type of career in finance that can grant the highest potential earnings."
You are thinking about this completely wrong. Do what you enjoy and it may not be in finance.
Market making is still a big business, and typically the top teams has guys working in the pit as well as upstairs doing the 'electronic trading' as you put it. The simple point and click style trading seems to be falling off, from what I have seen first hand as well as from friends at other big shops. To answer your question about the math/CS background, I do believe that this is the one of the better spots to be in, but again the role you take is more important. Many of the big HFT firms are having declining profits not so much from regulation, but more so from the speed gap closing and the overhead costs remaining so high. If you're replacing CPU's in all your machines every single month because you're trying to squeeze those extra microseconds out, odds are that model won't work too long into the future.
If you're on WSO, odds are you won't be looking at the quantitative side, but in the off chance that you have the background for it, I would definitely recommend pursuing that route. Worst case scenario you have the programming background and technical skills to work in pretty much any tech field.
This whole post seems insane to me. You are going to choose an entire academic path just to hopefully have a shot at landing in a very specific career field; because after asking a few people and reading a few threads you think it's the quickest path to getting rich??? Try saying that out loud to a sane human being.
You won't be successful in anything if you hate the work. Keep in mind, different fields draw on different skill sets to succeed, and the top of any field is going to be raking it in hand over fist. Look at all the different career fields that can afford you the lifestyle that you want and then choose the path that is the most interesting and where you are most likely to succeed.
I wish you the best in wherever life takes you, but I'd urge you to re-think your approach.
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The most profitable career is founding MSFT in 1975. But that's a tough career path to follow.
Like others have said figure out what you're good at and enjoy doing and do that. Most of the richest people I personally know have nothing to do with Wall Street other than they use the services offered.
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I'm telling you, dude, I was in your shoes a few years ago. There is no real "get rich quick", whether it be finance or tech or anything else. There's no job you're going to go into that's going to guarantee you the high six-figures or seven-figures in the short amount of time you're wanting. I often wondered why people always told me to find something I enjoyed doing - now I understand it a little better. It's better to do something you enjoy, because in the end, I'm sorry, but none of these fields are necessarily going to make you a millionaire. If you were talking about being an actor/musician then maybe it would matter some, because they don't have good job security or high pay for the larger distribution of folks. But it's not. So just relax, try to find something you enjoy doing in a good field. If you can find some sort of inefficiency and capitalize on it, or if you can climb the corporate ladder, then maybe you'll get the huge salary you're dreaming of. Otherwise, it's best summarized but something ArcherVice said a while back...
This makes sense to me. Profits would likely have to continue along a positive correlation to keep up with the rising cost of maintaining such fast hardware, but I might not be giving HFT profits enough credit or assuming costs to be greater than they are.
I also don't think HFT shops are likely to sit back and watch as their model falls apart. I predict they will adapt their model to survive in the long term. With new regulation comes new loopholes.
You've been" lurking on this site for some time" and yet you don't really know what S&T is. Why don't you put some effort into really knowing what these jobs are about before wondering if they have the potential to make you "richest, fastest."
Lots of good advice in here. You won't reach the top of any field without a deep passion for that field. You need to be doing it because it plays to your strengths and passions. Think of almost literally any career - those that are most passionate about it, those that are the best "fit" for it, are at the top, doing just as well as you're probably dreaming of. Just keep that in mind.
All I can say is...you have quite a bit of reading to do. And if you don't really have a passion for this industry, you won't likely succeed.
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