Which Prop Trading Firms Have the Highest Salaries?
I'm wondering which prop trading firms pay the best salaries for traders. I want to go into prop trading after college, and I want to decide which firms to focus on in my recruiting.
I understand that the more reputable prop firms pay a base salary along with a percentage of PnL. Which firms give the highest compensation for traders?
Prop Trading Firms Salary
Our users shared that salaries for prop trading firms are in the $100 K range; however, often times candidates will negotiate their salary with the firm.
You should focus more on just getting into a decent shop, period. That's hard enough. All of them pay very well, and the base salary is sure as hell not where the money's made. Any decent shop will pay you at least 60k in salary, and bonuses on top of that in your first year. If that's not good enough I don't know what you want. You'd better be first in your class at MIT if you want to do better.
The top prop trading firms pay all about the same amount. NY firms do pay more than Chicago firms, but if you include the differences in rent and taxes, the salary is about the same. If you are interested in the exact numbers they are widely available in Glassdoor, however keep in mind that the salaries aggregate people from all different levels of experiences.What is more important is finding a prop shop that fits you so you can succeed. Each prop shop is different, however you can get a general feel for how they operate from the interviews. Certainly an 100k vs 60k offer is a big difference, however if you are trying to decide between an 110k v 100k offer, what is more important is if you believe you can fit in and succeed.
You negotiate your own deal at each shop. Most of the time, there is no base salary and you are working on a profit split of the net gains with the firm (higher if you put in your own capital, lower if you have a true prop deal). If you are good, the firm may offer you a draw (the equivalent of a monthly base salary) with the % split on top of your net gain on top of that. Payouts/withdrawals are on a regular schedule (1-2x a month) and bonuses are annual.
From what I heard HRT, Jump, and Vatic Labs all have 150k+ base and JSC, Five Rings, and KCG all have 125k base. I assume any half-decent HFT firm (Teza, Virtu, Tower, etc.) will be similar. Some smaller prop firms probably also pay relatively large base salaries to good candidates. I think all of the good quant prop firms pay discretionary bonuses and rarely have individual PnLs. While obviously these firms hire people who weren't first at MIT I think the vast majority of undergrads hired by these firms would be well above average at MIT/Harvard/etc.
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You should focus more on just getting into a decent shop, period. That's hard enough. All of them pay very well, and the base salary is sure as hell not where the money's made. Any decent shop will pay you at least 60k in salary, and bonuses on top of that in your first year. If that's not good enough I don't know what you want. You'd better be first in your class at MIT if you want to do better.
I'm not sure if you need to be first at MIT. Graduating in May from a LAC and making almost twice that as base.
The top prop trading firms pay all about the same amount. NY firms do pay more than Chicago firms, but if you include the differences in rent and taxes, the salary is about the same. If you are interested in the exact numbers they are widely available in Glassdoor, however keep in mind that the salaries aggregate people from all different levels of experiences.
What is more important is finding a prop shop that fits you so you can succeed. Each prop shop is different, however you can get a general feel for how they operate from the interviews. Certainly an 100k vs 60k offer is a big difference, however if you are trying to decide between an 110k v 100k offer, what is more important is if you believe you can fit in and succeed.
Jane Street. But you don't seem to be anywhere close to getting hired by them.
From what I've heard the JS London and Hk offices were/kinda still are mainly to support the NYC office e.g. if someone in NYC trades an international ETF or ADR then the satellite offices trade the underlying when the local exchanges are open. I don't think JS pays the highest starting salaries but they pay interns 125k annualized so full-time is presumably more than that.
The best prop shops won't pay any "salary" - maybe a draw against future earnings, but paying you just to show up isn't part of the deal. Your goal should be to make money and be highly profitable - if you do this, your earnings should dwarf any salary/draw.
Crap shops in Chicago pay
By "decent" I meant a place that doesn't charge you to show up and trade your own money...but yeah, the better firms will pay more than that. Either way.
NYC has a lot of firms competing in the space, but most of the prop shops operate on a payout based model for the traders (i.e. Hold Brothers, T3, Avatar). If you are looking for a base salary, consider looking at more structured options, like a hedge fund desk or bulge bracket.
I had a question since you have some knowledge. So traders get base salary + bonus (portion of profits they made?) And when do they get bonuses? All together at the end of the year or each month with salary?
You negotiate your own deal at each shop. Most of the time, there is no base salary and you are working on a profit split of the net gains with the firm (higher if you put in your own capital, lower if you have a true prop deal). If you are good, the firm may offer you a draw (the equivalent of a monthly base salary) with the % split on top of your net gain on top of that. Payouts/withdrawals are on a regular schedule (1-2x a month) and bonuses are annual.
From what I heard HRT, Jump, and Vatic Labs all have 150k+ base and JSC, Five Rings, and KCG all have 125k base. I assume any half-decent HFT firm (Teza, Virtu, Tower, etc.) will be similar. Some smaller prop firms probably also pay relatively large base salaries to good candidates. I think all of the good quant prop firms pay discretionary bonuses and rarely have individual PnLs. While obviously these firms hire people who weren't first at MIT I think the vast majority of undergrads hired by these firms would be well above average at MIT/Harvard/etc.
What might be a typical total comp at these shops (1yr, 2yr, 3yr in) ?
At the top firms first year comp is usually 250-300k I think and at the other ones it might be more like 175k-225k but I'm not really sure. Several years in is much more variable. I should also add that some of these numbers might be slightly off it shouldn't change the overall picture.
250-300k is way too high. The top HFT/quant firms do have the highest pay overall but anything over 250k is rare for first year. You're describing the top 5% of trading recruits from the very best schools so this number isn't indicative of what almost anyone should expect going into prop trading.
I don't think it's way too high for the best HFT/quant firms although 250k is more typical than 300k. The numbers also depend a little on how deferred bonuses are accounted for. I agree most people shouldn't expect this type of first year compensation but the questions was about the highest salaries not average salaries.
The entire point of Prop Trading is the meritocratic environment and this business has a VERY concrete scoring system (PnL). I'd try to find a better personal fit among the better shops than some arbitrary salary statistic, because at the end of the day it all comes back on your performance. Capiche?
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