Summer internship: BB S&T vs prop shop!
Hey guys, I'm undergoing the application/interview process for summer internships for both S&T at big banks, as well as trading at prop shops. I anticipate to receive offers from both. So I need help making a decision what to do this summer.
As far as I can tell, the key differences are:
Prop shop:
Hours might be better, depending on which firm.
Very casual dress since there are no client relationships. Casual, easygoing culture.
Flat organizational structure, no ranks, less so than with a bank.
Trading the firm's own money instead of other people's money means more 'intense' work.
BB:
Appears more prestigious. Am I correct in this assumption? And this may come with more exit opportunities (although I realize S&T doesn't usually offer terribly great exit opps overall).
Bigger S&T department means a lot more resources available for interns: A lot more traders/salespeople/quants to learn from. A lot more in-house technology to tinker with and learn from.
And I think that it's easier to move from big bank to prop shop than the other way around, am I correct?
What else should I consider? What have people decided? And I guess to give a sense of what programs, let's compare:
JPM, GS, Citi, MS, UBS sales and trading, etc
versus
IMC Chicago, Spot Trading, WH Trading, Belvedere Trading, Jane Street, etc
(My considerations are along the lines of the above, I'm not saying I got offers from all of these.)
I don't think BBs appear more prestigious than prop shops to anyone that actually matters. It all depends on the firm. Moving from one to the other all depends on how successful you are, so it's difficult to say. Overall it's difficult to generalize in this way and reach any solid conclusions.
Agree with NVO. Please also note that prop shops are extremely secretive, so you don't really know exactly what it's like until you work in one. Even the prop shops you listed above do completely and wildly different things -- it's nearly impossible to compare them to each other, let alone to the BBs. I'm at a prop shop right now (one of the market makers often talked about on this site), and much of what people speculate about my firm is completely wrong.
But your general thoughts about BB vs prop are fairly accurate. My hours are awesome, the culture is awesome, and yes, since everything is with the firm's capital, everything is "intense." That being said, the organizational structure of the firm is not quite as flat as you'd think. There are essentially four tiers of people on the trading side: 1. trading assistants = grunt work, training program 2. traders = allocated some capital, have to deal with some of the BS, but still a great place to be in 3. big-time traders = they don't follow any of the firm rules, they don't care about protocol / compliance, etc. because they make the firm a boatload of money 4. upper management = typical stuff
The interviews for these places are pretty different, so don't be surprised if you only get offers from BBs or only from prop groups. Beyond that, once you actually interview on-site, you'll definitely get an idea of which side of the trading world you'd prefer to be on.
Come back when you have offers from both, until then there is no point in it.
'Kay. My interviewers liked me, which makes me a little arrogant about my prospects. In any case, I have offers from one of these and in the case that I do get offers from both, I think it's an important decision.
yourdreamtheater: Are you set to do trading your entire life? How are your hours? Also, what about the risk of getting fired if it turns out you're a crappy trader? (does that happen? if so, how often?) I hear also that if trading is all you ever want to do, then prop shop is a good place because that's all they ever do. But I hear if you're even thinking the phrase 'exit opps' then you might be better off at a BB s&t place?
I could do trading for my life if I wanted, but our firm is relatively young. People at my firm generally stop trading around 35-40 and move into management roles, but there is an older guy (maybe 45 or 50?) still out there who absolutely kills it.
Hours are awesome -- think 45-50 hrs / week as an analyst, then market hours + a little pre- and post-market when you actually start trading
Yes, you'll get let go quickly if you suck at trading. If you're not making money for the firm, then they will fire you. Plain and simple. Most people realize they suck at trading and quit on their own, but sometimes people will get kicked out. Doesn't happen often, but I've seen it a few times
Exit ops completely depend on the product you're trading. I've found that people generally respect the level of difficulty inherent in making markets in most derivatives, so exiting isn't as hard as you may think. That being said, trading in general requires a very specific skill set -- one that isn't easily transferrable. So if you want to move into something completely different, then you're going to have to work hard on your own time to shore up your knowledge gaps. But basically yes, people know that trading is the ultimate stress / pressure cooker, so traders generally make great employees because they're level headed in pressured situations and can think through situations analytically.
No Optiver, DRW, or SIG? I'd rank all of them above everyone on your list except Jane Street.
I'd echo NVO in saying that to anyone who matters, prop trading isn't less prestigious. To your mother, it probably seems like it is, though, so maybe that's what you mean.
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