Prop firm or law?
I am currently a lawyer considering leaving the practice to join a prop firm. I have a few reasons. I don't really like being a lawyer and I think the fast pace decision making would be more exciting to me. I also think I've about maxed out my earning potential in the law, but could realistically get to $500k in trading someday.
I have offers to go to a prop firm and a law firm right now, and I'm still not sure whether I'm brave enough to make the move. Anyone have thoughts on whether I should make the switch?
like, legit prop firm, or chop shop?
Market making like Optiver
I really don't feel I know enough about market making in options to make an informed decision here--is it a stupid move to risk my career for this?
Know that most people fail, and fail quickly (under 2 years), but if you make it out, you can make fairly good money. If you're comfortable with that, by all means, go for it. Assuming you really do mean something on the caliber of Optiver.
Thanks for the advice. I'm really interested in doing it... I think i could be a very successful trader. But I'd be giving up an offer in the law of ~200k to do it, and I'm pretty nervous about potentially failing. So, two questions for you:
Why do most people fail? As someone from outside the field I still don't fully understand quite what people mean here. I know it's supposed to be high pressure, and I've shadowed a few people as they worked their desks, but it's not nearly enough of an insight into the day to day operations for me to really understand what people do well or not well.
For those people who fail, what are the exit options for a trader with limited experience? I don't I'd be able to go back to the law of I did this, so I'm really curious what I could do in the event it didn't work out.
The problem is most people in the industry are good traders. The nature of your profession is a zero-sum game and while there is some "edge" to being a market maker, it's still incredibly competitive. Trading is less about being good and more about never ever being bad, which is easier said then done. Options market making, more than anything else, is collecting pennies in front of a steamroller. Don't get me wrong, you might be good at this - I actually know an ex-lawyer who is now at Optiver, so this has definitely been done before. It's just not easy. It's like reading Slanksy and saying, wow, I really get this - I bet I can be a good poker player. The big leagues are tough.
Most people who fail are young and have plenty of time to rebrand themselves. In prop shops in particular, these guys are usually pretty quantitative and are good fits for big data/software development/etc. Sometimes they might switch to another firm, but that's fairly rare, especially if they fail early.
Is the failure rate different at an automated/algo firm?
The short-term failure rate seems smaller, in my experience, but once you hit the 4-5 year mark I would venture to say it's actually quite similar.
There are people in my firm who is from law background, and they really enjoy it. Compared to 80~100 hours of grunt in law, trading hours are really a breeze(and much more fun). And yes I am talking about the shops that are frequently mentioned here.
When you say trading hours are much more fun, can you be more specific? What in particular are you doing that is fun? Is it difficult to constantly and quickly look across many computer screens all day every day? I don't think it would be this way for me, but most people I talk to describe it as extremely high stress and not fun at all.
Everything you said is true. But if you don't enjoy high stressed, dynamic. fast paced, and competitive work load, you don't belong here. I enjoy trading and can't think of myself doing anything else as a career right now, and so do most of the successful traders in my firm. Not sure most bankers and consultants would actually say 'fun' about their job.
This sounds like an early mid-life crisis—I’m not trying to patronize you—but it’s hard to imagine a more opposite career path.
I think that's a fair statement. I guess I always thought I could do something like trading coming out of college, but I never really knew enough about it to even know where to apply. I wound up going to law school instead because it seemed like something I understood and might enjoy. And honestly, I did enjoy law school and I make an OK (not great) lawyer. But since the day I started, I've had my head up looking for opportunities to do something that 1: I liked more, and 2: had more future career potential.
I don't have enough info to really know whether I'd like this job (the prop firm) or hate it. I have a solid math background and enjoy working quickly under pressure, but I've never done it for 8 hours a day every day like trading would be. If I were 22, I think I'd take the job for sure. But being older with an established career path and making 200k, I'm feel pretty negative about taking the risk. I know I could do the job, and there's a chance (maybe 30-50%?) that I could make it a few years and hit the 500k compensation level. But as much as I'd like to give that a real shot, I don't think I can give up what I have to go into a place with such uncertainty.
Like I said before, I've been looking to make the move from law to something else, and especially finance, from the time I was in law school. It is definitely a quarter to mid life crisis. And now that I have a real offer to do so, I'm kicking myself for having cold feet. But at the end of the day, I just don't think I can give up what I have for this particular offer. I appreciate the advice everyone took the time to give, and if course I'm open to hearing any further thoughts on my position.
I'd stay in Law, and trade Options and Equities a little bit in the morning. Takes the pressure off, but use your own money.
Well, I would have 0 idea what I was doing. I've wanted to do stuff like that but I have absolutely no idea where to start. Part of the benefit of this job for me is that I'd be able to get paid to learn what I'd need to know to develop legitimate trading strategies.
I would only say you should consider joining the prop firm if it's a legitimate tier 1 firm or if you feel like you can fall back on your law degree if trading doesn't turn out the way you expect. Also, where does the 500k compensation level goal come from? 500k isn't a guarantee even at the top tier firms. I would say 70-80% of the successful guys I know sit closer to the 300-400k range in average years.
Lifted 300~400k. What's your next offer?
Still there :)
The most "successful" guy I knew after 2-3 years brought in something like $4M in trading revenue and was paid $70k base and $700k bonus of which 1/3 was deferred. All of the other "successful" guys were paid in the 200k-400k bonus range on $2-$3M in trading revenue. I wouldn't describe it as a top tier shop but still brings in 150-200 sticks a year. It's just hard to get paid after only 2-3 years...
lol just because you had Auggie vol last year does not mean most prop guys make over 400k on a normal year. 400k is pretty respectable for a median trader. relatively few traders make the seniority needed to clear the 750k mark, although they're certainly there and not that rare
I'm going to be one of the few people here who would say DO IT. I've hung out with enough lawyers to know the reality of the jobs and how much it sucks. You've got one life, you could probably get a job back in law (albeit a big pay cut, no Biglaw firm is going to take you back I would think) if you fail utterly, which is a much better landing pad then most people get. I do understand the levels of snobbery in law are extreme (I think they'd shock even the finance people posting here), but I would imagine there would be some sort of work for an experienced lawyer if you had to go back. Granted I'm not a lawyer so I don't really know.
People are questioning how trading would be "fun". Trading is stressful and interesting, which is better than law, which the writer Philalawyer characterizes as "stressful AND boring". Google distress vs. eustress.
FYI, still haven't made a decision. But I think Corey's comments best capture my feelings on it. Trading definitely sounds more interesting than law on average. It's really hard to sit in front of a desk at a law firm for 10 hours and just write stuff. Especially because every minute of your time should be spent actively working if you're going to bill it. Trading has the same demands on your time, but on an intellectual level you have to think a lot more than in law. At least, that's what I think.
I am genuinely not sure what I'm going to do. Leaning to the prop shop, but that could change tomorrow. I gotta say though, this is REALLY killing me. I hope I never have a midlife crisis because this has caused me enough stress for a lifetime.
Repellendus voluptates optio animi aut soluta laboriosam. Dolor natus quia esse tempore qui consequatur non.
Consectetur ut omnis illo voluptatibus quia laudantium in. Unde impedit placeat magni laboriosam. Et eligendi nobis omnis animi vel modi consequuntur cupiditate. Voluptas adipisci et et ex et.
Maiores ut aperiam fugiat sint nobis illo saepe. Deleniti cum rerum et perspiciatis impedit minus. Dolor facilis ex harum nobis nihil enim tempore. Est omnis nesciunt debitis perferendis. Perferendis qui quae voluptas illo. Sit laudantium enim quisquam.
Laborum qui necessitatibus tenetur dolore nostrum quas voluptas. Non laborum cupiditate veniam aliquid quis quibusdam excepturi ratione.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Odit ipsa quis in sapiente quidem recusandae rerum laudantium. Sunt architecto quo dicta rem reiciendis. Excepturi temporibus quam possimus error aut ut voluptas. Sed ut neque est et nisi in. Architecto dolores ea vel dolores eveniet blanditiis aut. Minima et repudiandae earum nihil quia accusantium. Ex soluta excepturi laborum velit occaecati itaque voluptatem.
Vero nostrum optio commodi facilis maxime. Pariatur animi quis tempora. Qui officia dolore expedita distinctio autem molestiae et ullam. Dolore et officia velit sint ut amet.