SIG vs. Chicago Prop
I'm trying to decide between working at SIG and working at prop firm in Chicago. The main reason I'm having a tough decision is that the Chicago prop firm is basically offering twice the base salary that SIG is offering me as an assistant trader, and I'm not sure what my long-term upside at SIG is going to be (they seem to be secretive about how much you make after you graduate from their assistant trader program).
What other things should I also try to find out? Chicago v. Philly? Retention rates? Basically I think the Chicago offer is clearly better on paper, but neither firm is very clear on the discretionary bonuses, and from everything I hear SIG is one of the best places to work, so I'm trying to understand why exactly and actually make a reasonable decision.
If it's a respectable chicago prop firm offering twice more than SIG, it's a no-brainer. Plus, Chicago is WAY better than Philly, which is a god awful city.
SIG definitely offers a great training program, although it is difficult to advise without knowing which Chicago firm the SIG offer is being weighed against.
I'm not sure starting salary should be the deciding factor so early in a career - SIG definitely has a great reputation for helping its traders to grow and reach their full potential. Obviously, though, compensation is important.
What is the Chicago firm?
It's near certain that the Chicago prop firm is one of the more reputable ones. You really can't get offered twice SIG's assistant trader salary unless it is, at least last time I checked.
I don't really want to give away which Chicago shop it is, but it's definitely one of the top 5 in the algorithmic trading world.
If base salary isn't something I should be considering, what factors should I be thinking about? Also, along the lines of compensation, I was told from the Chicago firm that their bonuses would hands down be better than those offered at SIG (obviously not exactly unbiased information, but still).
Refusing to name the firm makes giving advice difficult...but based on the fact that it is a top algo shop in Chicago, the places that spring to mind are GETCO, DRW, Allston Trading or Jump Trading. If it's GETCO, take GETCO. Lets analyze SIG vs DRW vs Allston vs Jump
Firm Capital: SIG: $530 million Jump: $197 million Allston: $44 million DRW: Unknown.
Capital Per trader (very rough - based on 2.5x number of US traders with linkedin profiles) estimate: SIG: 1.62 million Jump: 1.55 million Allston: 0.63 million DRW: Unknown.
Firm Capital per trader is a pretty important input in long-run compensation, obviously the returns these firms are getting on their capital once leverage is accounted for varies, and the biggest unknown in trader performance is obviously how YOU will perform. Nevertheless firms with more capital per trader tend to pay more. Also, you should consider how well the firms will train you, your skillset, ect.
I'm pretty sure SIG has more capital per trader than Allston or DRW. Jump's too close to call. (For comparison, the same method of estimation gives 0.95 million per trader for Optiver, 0.8 million per trader for IMC).
not sure how you come up with those numbers. S
SEC filings list the capital each of these firms have.
I don't want to give away the name just in case it uniquely identifies myself. Anyways, the Chicago prop is one of those that you listed.
I'm also a bit skeptical on those numbers, though -- Especially SIG. I have a pretty confident source that Jane Street has more firm capital than what you listed for SIG, and I find it really hard to believe that SIG would have less capital than JSC.
Anyways, I've gotten that both firms have very high retention rates, yet the chicago firm has a significantly higher base and they told me outright that they have better bonuses than SIG offers. In addition, I'm guessing that Chicago > Philly is a no brainer. So any reason I shouldn't take the Chicago job?
Yes, Jane Street has more capital. Have a look for yourself:
Jane Street: http://www.sec.gov/Archives/edgar/vprr/10/9999999997-10-004601
SIG: http://www.sec.gov/Archives/edgar/vprr/10/9999999997-10-005599
Per trader Jane Street probably works out to ~3.2 million per trader (More than 220 total employees, maybe 170 traders). Jane Street is a very well respected firm.
I thought this was interesting so I poked around on the SEC's site. I wanted to point out that all of these trading firms have multiple legal entities associated with them. So the numbers you get for their "capital" by looking at any one document is really only a lower bound. They can be managing much more than that.
I think you haven't figure out the whole picture and gave incorrect info, Susquehanna Capital Group is just one branch under the name "Susquehanna International Group / SIG', actually SIG has 9 sub firms, the total capital is much more large than Jane Street, these two firms are even not at the same level ...
I seriously doubt that there are many Jane Street Recruiters in this forum, and distribute biased info to students, which is not good
Yes, Jane Street has more capital. Have a look for yourself:
Jane Street: http://www.sec.gov/Archives/edgar/vprr/10/9999999997-10-004601
SIG: http://www.sec.gov/Archives/edgar/vprr/10/9999999997-10-005599
Per trader Jane Street probably works out to ~3.2 million per trader (More than 220 total employees, maybe 170 traders). Jane Street is a very well respected firm.[/quote]
Interesting, I'm really surprised that JSC would have more capital than SIG. Also, that's an enormous amount of capital per trader; is any other firm even close to that? Perhaps GETCO?
Anyways, I'm still looking for any good, convincing arguments for choosing SIG over this other firm.
Honestly, I think you've answered your own question. You said you prefer Chicago, and that they are paying you a lot more. So the only reason to pick SIG is if you think you would enjoy market making more than algorithmic trading, which is up to you.
I don't know the numbers for GETCO or Five Rings Capital, but besides those firms (maybe)there are no other prop trading firms that have the capital per trader than Jane Street has. That's one of the big reasons Jane Street can afford to pay their traders so much.
I agree, I think I've already decided, I'm just trying to do due diligence before I commit to a job offer.
Jane Street's base salary for first-year traders is $100K, which is what citadel offers. No idea what GETCO's base is, but it's probably similar.
Not to be nitpicky, but DRW is not an algo shop. They are still mostly a traditional trading firm that does fixed income derivatives. Allston is algo, but they pay complete crap, and are extremely stingy when it comes to bonuses. Jump is very solid.
DRW does algo too, they have a posting at my alma mater for an algorithmic trading assistant position.
I don't think these firm capital numbers are very valuable. The number is actually fairly arbitrary, as the partners can choose whether or not to keep their capital invested in the firm or whether to pay a dividend. For instance, if you look at how firm capital has changed over the past few years, for some firms the number is fairly constant, despite them making large amounts of money, so it is clear that the partners have simply chosen to take a cash distribution. Whereas for Jane Street, the number is increasing, implying that partners have kept their capital invested in the firm. The market-making/HFT strategies employed by these firms are not capital intensive; they are labor and technology intensive. If you are a trader at one of these places, you are not really limited by how much capital you have, you are limited by how much liquidity there is in the markets you are trading.
Go Chicago prop. Know a few guys at DRW and Jump and they do well and enjoy it.
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