hedge fund prop trader vs portfolio manager
I am curious to know the pros and cons of these two very attractive alternatives:
1. Hedge fund prop trader- this would be a small team managing a small pool of money on a more or less discretionary basis without extremely sophisticated support.
2. Buy side (hedge fund included) portfolio manager- a bigger group headed by head PM but with a lot more staff- some in research, some in trading etc. and much bigger pool.
If I leave the equity/credit sectors aside and only consider rates, forex, commodities etc (FICC). what are various pros and cons of these 2 different paths. One thing I can think of is that on FICC side, to become a head PM on the buy side of a bigger group, you'd have to spend a lot of years doing more research kinda stuff with programming etc. That doesnt seem to be necessary to be smaller discretionary prop trader.
Any update?
I'm assuming you're early-career (if not this is a bit different). Here's how I'd think about this if I was in college or trading with no formal research experience, have been doing terribly the past few years (mainly b/c these guys historically exploited strategies that have largely been picked clean by algos - whether they realize it or not). Conversely, guys that have a patient and well thought out research process have done well - as there have been big shifts over the past few years that were possible to anticipate and plan for - but not that you could necessarily call to the day in my opinion. So by having a broader portfolio, you were able to build positions over time and extract alpha from the market. Furthermore, the second option would give you more stability early in your career (which is important), and, hopefully, somewhat of a brand name. Exit options from a prop firm, if it doesn't work out, are basically whatever you came into it with (or less, given atrophy). And finally, nobody at a prop firm will help you learn, regardless what they say. They are mostly struggling to survive themselves. The only exception to this I would make, would be if you are an exceptionally good quant/systematic trader, and have a suite of algo's you feel is already ready to deploy - in that case, think about potentially going somewhere you can deploy those immediately (prop firm).
Portfolio manager and prop trader (Originally Posted: 05/24/2013)
I have searched but could not find the exact difference between a prop Trader and a Portfolio manager.Could somebody please tell me?
Is this a serious question?
where did you search? Try google.
Try Quora, I heard its a pretty rad finance forum
http://traderfeed.blogspot.fr/2008/01/from-trader-to-hedge-fund.html
you guys are being a bunch of dickheads. You can be both a PM and a prop trader at the same time, in which case the line woudl be very blurry.
yes there is no real hard and fast difference its just terminology. When I was in a prop trading group at a bank I called myself a "prop trader" because thats what we called ourselves but the job was no different then the one I do now where i call myself a PM.
Ok then, would you say that it is possible to start at a prop shop and switch to a HF later on ? (obviously a HF focused on trading like Global macro for example).
"prop shop" is a very broad term..i think anything is possibke but most things people now call "prop shops" are not like the prop trading role i had back in 2006-2007. So i would have to know more to really say...
no i really searched but couldnt find a real difference except cfa for PM and a prestigious college degree + trading experience for prop trader.
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