Hi,
I'm having a very hard time deciding between two roles right now. Could i have your thoughts on choosing between an S&T role at a BB bank, vs a Trading Role at a well regarded Prop Firm (think Optiver, Tibra, SIG, Flowtraders etc).
Although both trading related, they're obviously very different roles and both interest me a lot.
Here is my breakdown of pros between roles.
BB Bank -Very good brand name if i want to do an MBA later or something (i know Traders don't often to MBAs). -More stable (have heard prop firms can fire new hires in first year if not profitable) -Potential other roles to move into if i find trading isn't my thing long term. -A lot more focuses on my fit during the recruitment cycle, whereas the prop firm cared more about arithmetic and solving logic problems. I like that they vetted my personality a lot for the role.
Prop -I like the more casual atmosphere (not just the clothing but the fun break room etc). -Seems like a more entrepreneurial environment where if i have a good idea they'd really like to hear it. -Probably a better work/life balance (not certain of this).
Starting base salary is comparable between the two (small difference but certainly not enough to be a deciding factor) but i am very uncertain how the bonuses could differ (both in the near term and future). If anyone has any information about this i'd like to know.
What do you all think? If you were in my position what would you choose?
Information i forgot to include. Both first year roles out of university, They are in different locations, but i believe i would be happy in either so this isn't factoring too much into it.
bump
Work at the BB for 2 years and get out
BB 2 yrs then if you still want to trade, lateral to the prop shop and ask for a nice comp package.
Aus here work in the industry, BB will not necessarily translate to a trading role so consider carefully.
Depends on what internships and brands you have on your CV already.
Personally (all else being equla) I'd take BB as a less risky option. (Even though I work at a prop shop, i'm actually risk adverse which is probably why I've survived all these years).
BB for the first couple of years is better longer term. If you aren't a good trader then you have more chance of networkong moving to another department internally. Even if you get fired then at least you have a great brand on your CV which will help land interviews at other banks, asset managers, prop houses and even corporates within reason.
The issue with prop firms is that even the biggest ones are still niche and are less well known than a bank so if you fail within a few years then it's a lot harder to recover. Even if you are successful for 5-10 years at some point you probably want to change careers (trading gets boring after a while) so lack of branding will hurt getting external jobs and their are fewer departments internally. Lets say you are an amazing trader and love the job, the next step up would be to start your own fund to scale up. Then again a bank brand and network will help with legitamacy with raising capital. At a prop shop your bet would be to invest family money or get some colleagues to partner up with you.
Again if you already have multiple banking internships then some of my points are mute. Also sometimes it's just the luck of landing on particular desks at the right time which is the biggest factor. I had a friend that chose a bank trading index vol but the whole desk got cut within 6 months. Had he taken an ETF trading offer at the prop firm he would have had at least 5 good years of PNL.
Also beware that even in prop firms politics exists and much depends on who likes you and who doesn't. Can be incredibly frustrating.
Thanks everyone for the responses, especially the people who took the time to type out detailed replies.
I am leaning towards the IB role, a positive note is that i know the desk and role i will be working in (again, don't want to give away too much information) and i am very happy with it, one of the team members also gave me a call to answer any questions i had which i appreciated.
Since it's the sort of person i am, i've done a bit of a risk/reward analysis of each role (especially taking into account all the good points everyone here has brought up) and the IB role is coming up on top (would be happy to go into more detail in this if other people are in a similar position). If i didn't have both offers i'd be very excited to take the options market making one. It's amazing how you go from being desperately on the grind for any trading offer, and suddenly have two that you'd love to take. It's certainly a great problem to have but has put me in a stressful situation.
Please excuse the copy/paste reply to you and econometriks. Wrote up the reply while reading both of your comments and wasn't sure how to reply such that both of you replied it.
BB will be the more conservative route. You can excel in your career and have more exit opportunities. Prop shops are more niche. Definitely a "eat what you kill" mentality and higher variance.
BB -> Prop will probably easier to obtain than Prop --> BB, just my 2c.
I'd go with the prop shop.
This question comes up all the time, and the typical response is: "what is your risk tolerance??". I don't think that is the right mindset to approach this with. I can't think of any quality prop firms that are throwing new guys right into the action and cutting them for not being profitable enough in the first year. If you are at a legitimate firm, you likely won't be contributing that much to PnL in your first year, most of this period is about learning and working on research/projects for the desk (as well as some general clerk work). These firms already have established strategies, from traditional market making to systematic to HFT. You're not going to be coming in and reinventing the wheel as a kid out of college... If you're smart, show some drive, brainstorm new ideas, and don't mess up easy tasks, you aren't going to get cut.
If you are unsure as to whether or not you want to go into trading as a career, I would probably go with BB. It gives you brand recognition, so it makes transferring to other areas of finance a bit easier than if you were at a prop firm. That being said, prop firms these days are very quant driven, so the skills you'll build at a prop firm as an analyst (working with data, applied stats, etc) are highly transferable to work at a HF/tech firm.
Also, I would disagree that BB -> prop is easier than prop -> BB (BB -> HF might be a bit different). At a bank you have a huge pool of information, and typically are trading much bigger positions, a lot of these guys tend to perform poorly without the client flow/knowledge/scale. The guys that prop firms do hire from banks are older and more established rockstars who can't take the prop risk they want anymore at a bank.
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