Prop trading firm vs a hedge fund
Hi everyone!
Currently I have offers from a relatively good proprietary trading firm (say, DRW, SIG, Optiver) and a medium-sized hedge fund. I really like both of them and it's very hard to decide which is better.
Which of them is better for long-term?
Is it possible/common to move from a hedge fund to a prop firm (and vice versa)?
Also which department of a prop trading firm is more promising: Gamma arbitrage, Arbitrage trading, index/equity market making?
What is the difference between arbitrage groups in a hedge fund and a prop trading firm?
Thx in advance
top prop > medium sized HF
And standing out a good prop shop will make you very valuable to large HF. I would imagine the money is pretty similar except you may get a higher base salary at the HF. If you're good at what you do and confident in that start with the prop shop and build a reputation for yourself....nothing is more attractive to a big HF than someone who has consistently made money.
I've heard of very few people at prop firms like DRW, jump, optiver, etc., making the switch to a BB or an elite hedge fund. That could be because they're making enough money at their firm and enjoy the job, so moving over may not make sense.
Does anyone know how easy it is to move around from one prop. firm to another (for market making) in Chicago ?
If you're good, yes it is easy.
Yea, it's easy to move, but probably expensive from the buyout in your contract and the non-compete clause.
A buyout is a cost of leaving the firm before your contract ends. You generally would have to pay your total salary back to the firm for your last 3-12 months of employment. This prevents alot of people from moving from firm to firm. All the firms have non-compete clauses but some firms are alot harsher than others.
Does every firm have such contract ? Does that mean they cannot let you go as well ?
Because of non-compete clauses, would you say one is better off working at his most desired location and firm for his very first job ? One might accept a job at a location or firm that is not his first choice, and this non-compete clause can create a big problem later on.
Thanks again.
Not really sure where you're getting this from. Most of the contracts that I've seen/heard about have been at will meaning you can leave at any time, or your employer can terminate you at any time. If you leave for another trading company, your company can enforce the noncompete if they want, but if they do they have to pay your base salary (no bonus is my understanding) for the length of the noncompete
if you have shown that you are a profitable trader it will be easy to move anywhere...hedge fund, prop desk, whatever. If not...well then not so much. Point being I'd be more concerned about doing the best job you can at this job as opposed to worry about your non-comp.
Apply everywhere and just take the best offer you got if you want to get into trading. Just make sure you read the nitty gritty so you know you if you could get fucked. That's all you can do. From there, do the best you can and go from there.
I didn't know about them having to pay you if they wanted to enforce the non-compete. I know of at least 2 companies and 1 individual that is in the process of having to pay quite a large buyout.
Do you know if that individual who is moving on gets the reimbursement for that buyout from his new company ? I am not sure why else the individual would agree to pay such a large buyout.
I'm not sure on this. I know that management wanted the individual to pay and not the other company cause that would make it too easy for profitable traders to leave to go to the competitor to get a better deal for only 15-30K.
It shouldnt matter... Let's say you do have to pay a buyout. If you let the new firm know, and they want you enough, they could easily give you a large "signing bonus"
Thx for your opinions.
Can anyone comment on these questions:
Which of them is better for long-term? Is it possible/common to move from a hedge fund to a prop firm (and vice versa)? Also which department of a prop trading firm is more promising: Gamma arbitrage, Arbitrage trading, index/equity market making? What is the difference between arbitrage groups in a hedge fund and a prop trading firm?
Thx in advance
what is a prop firm and what is a hedge fund. .
I know this is an old thread, but I was in a similar position during my senior year in college. I ended up turning down top prop firms (jane street, drw, sig, optiver, imc, peak 6, tibra, allston) for a BB S&T desk. I'm now in my 4th year there. My basic reasoning then was as follows. I knew that the first job out of college is actually the most important because it sets the trajectory of your career in terms of future professional opportunities and grad school placement. Although from a cultural and fit standpoint I liked the laid-back culture of the prop shops more, I believed that a S&T desk at a well-known BB would just give me more opportunities. I get contacted a lot by buyside desks, other sellside desks, and prop shops, regarding jobs. And I've been lucky enough to have gotten interview invites at every top MBA and MFin program I applied to this year. From talking to my buddies at top prop shops, although they're doing well financially, they just don't have the same type of career flexibilities and admission prospects as I do.
I am in a similar situation as you: I got an offer from a BB as a front office quant and an offer from a (I guess 2nd tier) prop shop. My question for you is that will BB give me more opportunities even as a front office quant? thank you in advance.
What is a Tier 2 prop shop? If I had to guess, I'd say that is DRW/IMC/Optiver? I don't follow the idea of tiers for the trading firms because it's more of a spectrum than predefined levels and they're hard to compare.
Also, is the prop offer for quantitative research or for a trading role?
Trading at a BB vs Prop Trading shop vs Hedge Fund (Originally Posted: 07/11/2011)
What are the advantages and disadvantages of working at a sales and trading desk at a BB, vs a prop trading shop vs a hedge fund. Pay differences? Exit opportunities? Job security? Work-life balance?
Advantages sellside - highly flexible expense account ("CLIENT OUTING") Disadvantages sellside - being poor on a relative basis
Advantages sellside - interns/intern bashing. Viral competitive games, like mustache contests Disadvantages buyside - getting bashed by CIO and getting blown up by greedy LPs
Advantages sellside - being able to blame your P&L fups on risk and research Disadvantages buyside - not being able to blame your P&L fups on risk and research
Prop Desk - Thoughts on prestige/experience/comp (Originally Posted: 01/29/2007)
any thoughts on prestige/experience/compensation vs a hedge fund. thanks
I don't work on a prop desk, but I can take a crack at compensation.
It would only make sense that, if you're good, compensation would be competitive vs. a HF. I believe this applies on every desk. You will be paid just enough to make it difficult for you to leave your current firm. Remember that you can leverage your offers. If a bank wants to keep you bad enough, it'll pony up the cash.
this is possibly the broadest, vaguest question i've seen on these boards.
which prop desk? which hedge fund? what offers do you actually have?
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