PnL compensation from Chicago prop shops
http://www.glassdoor.com/Salaries/chicago-junior-trader-salary-SRCH_IL…
Glassdoor says the median salary for a junior trader is $55k. This begs the question, will a junior trader only expect to make their salary?
Obviously the amount someone can make will be dependent on what role they play, the years of experience, the firm they work at, and their PnL.
What are the bonuses due to PnL like, for an average performer?
I know a friend with a $1MM book at Chimera. Not sure what he makes. But he walked me through a boe 'chat' on income.
Let's say you make a 30% return in Y1 (#winning). That's 300k. So, with a $60k salary you were a 5x return on investment. Or were you high school Padawan? Now ... that $1M is post tax income that the firm gave you to play with. So Because they control the capital ... they will keep the lions share (I presume). At a 35% tax rate on that income (void capital gains tax ... I know). The firm needed $1.5M.
With a generous 15% cut out of that $300k you get a $45k bonus. The firm keeps $255 (more like $195k as they have to pay you) ...
Now ... that 5x investment is more like a 3x investment on you. If we factor in insurance, training, and time away from work to train you ... then in Y1 you are only a ~2x investment. Hardly anything to brag about :p
While the numbers may or may not be true ... if you think about it ... it takes money to make money, and while traders make a killing if they are good ... the firm will make sure it's taken care of before you.
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