BB Sales and Trading vs Prop Shops
Hi, I am a final year university student (senior) going into the job market. My major is pretty mathematical (maths, physics) and I currently have an internship offer from a big BB bank (think MS, GS). I also previously had some internship in a prop shops and am applying for graduate positions in prop shops, some bigger some smaller ones. I am currently pretty undecided between the two (if I even get offers from prop shops LOL).
For the BB internship, I think it will be a more straightforward path (probably go there for a few years and dip to a hedge fund or sth? I am not entirely sure about exits so someone can correct me) as AFAIK, I feel like the exit ops coming out of a BB bank are more straightforward. However, I might obviously not get a return offer and also the starting pay is lower than prop trading firms. For prop trading firms, I guess the pay is higher originally but they tend to fire people pretty easily and I'm not sure what the exit ops are as I feel like these market making skills are not too particularly applicable to the buy side.
Overall, my long term goal would be to get a stable high paying job (I guess pay does not matter that much if I have worked hard enough in the first few years) with reduced hours (obviously this is everyone's dream and long term goal) when it is time to start a family, and I have heard people from investment banks typically go to the buy side because they are able to achieve these things, which is why I am focused so much on talking about buy side. But does anyone have any advice on the typical paths between a S&T BB internship and prop trading graduate job and which one they would take? (Obviously the choice would vary a lot between which prop shop, so I guess we can compare Optiver vs SIG vs Five Rings for simplicity sake)
Also, I am currently based in the UK (EU for prop shops) if that helps, but am looking to relocate to APAC in the future.
Hey there! It sounds like you're in a bit of a pickle, trying to decide between BB Sales and Trading and Prop Trading. Both paths have their own unique benefits and challenges, so let's break it down a bit.
Starting with BB Sales and Trading, it's true that this path can be more straightforward. You're right in thinking that it could potentially lead to opportunities at hedge funds or similar institutions down the line. The networking opportunities at a big bank can be quite valuable, and the brand name on your resume can open doors. However, as you mentioned, the starting pay might be lower than what you'd get at a prop trading firm.
On the other hand, prop trading, especially at top-tier firms, can offer higher initial compensation. The work is often more quantitatively challenging, which might be a good fit given your mathematical background. However, you're correct that the job security can be a bit shaky, and the exit opportunities might not be as clear cut as with BB S&T.
In terms of long-term goals, it's important to consider what you value most. If stability and a clear career path are important to you, BB S&T might be the better choice. If you're more interested in a challenging, quantitative role with higher initial pay, prop trading could be the way to go.
As for the specific firms you mentioned - Optiver, SIG, and Five Rings - they're all reputable prop shops. Your experience could vary greatly depending on the specific role and team you end up on, so it might be worth reaching out to people who work there to get a better sense of what to expect.
Lastly, regarding your plans to relocate to APAC, both paths could potentially offer opportunities to move internationally, though this might be easier at a larger, more globally established bank.
Remember, there's no one-size-fits-all answer here. It's all about what fits best with your skills, interests, and long-term goals. Good luck with your decision!
Sources: Prop Trading (MM) v.s. BB Sales and Trading
Want stability, go for bank
BB S&T is essentially a client service industry, more politics, more people skills and sales skills required at senior level. More job security. Pay is A LOT less than prop shop.
Prop shop is top quant’s game. Big money for big winner. Loser is out.
For first job definitely prop shop. If you don’t cut it, you can always fall back to S&T.
Also, buyside is a loosely defined concept, some people would consider prop shop as buy-side.
Not sure what kind of experience you had at prop trading but it is very different from my 5+ years experience in prop. My opinion might be biased given my experience.
First of all - No one, and I mean absolutely no one, in prop trading cares about exit opportunity. You are already there. Most people in buy side your age makes half of what you make, and you will have enough to retire by the time you are 35-40, on some high 7/low 8 figure savings. If you made it to a tier 1 shop, all you need to do is excel at what you do. Most shops are not about market making skill... shops like JS, SIG or even HRT takes position like mad men. When the HF business was good last few years, some of my friends left to become a PM in their late 20s at Millennium/Citadel/Squarepoint etc. to get pnl cut. They didn't really get a raise but there was a chance that they make mid 8 figures in a amazing year and retire earlier.
Not everyone wants to retire early; most people leaves in their late 30s to start a business/travel/get a phd. A lot people stick around trading til they are 50+, or they become senior management and get paid a lot for doing close to nothing.
I don't have much background about BB trading, but my old classmates working there told me everything looks grim. Markets are shrinking (except those prop trading shops haven't touched yet), bonus pool drying up, their work bounded by compliance and bureaucracy, limited opportunity to learn and entire desks getting laid off. There are some pros tho like you get a broader sense of different markets and interact with clients. It is probably true that survival rate is slightly higher but you also progress much slower; I am in my late 20s and I make more than my classmates' MD.
It's hard to fathom this but by the end of day stability is quite useless. If you can be successful at GS you can always do well at Citadel. If u suck at BB, you might be able to stay there a few years wasting time learning nothing and not get paid, and if u suck at Citadel, you get fired then you find a job at tier 2 shops or even BB.
I would recommend you talk to more people at BBs about their experience here; pick someone you knows well who doesn't mind telling you their frustrations at work. Do also ask if they got a choice to go to Citadel because I have not heard of anyone taking GS over Citadel.
Again I can be biased; I had a good experience working for prop shops and a dozen of friends who work (or used to) for BB who hated it there.
Hey, I'd love to hear more about your experience. If you'd be willing, feel free to pm me.
Optio blanditiis alias molestiae. Dignissimos illo est ullam tempore maxime eos. Perferendis autem et dolores officiis sit et. Dolor inventore repellat animi nihil et.
Dolor eum reprehenderit sed eveniet at harum voluptates. Minima excepturi nihil beatae nulla aut facilis. Mollitia odit ex doloribus. Explicabo veniam quia consequatur error. Accusantium laboriosam optio non alias enim. Modi qui fugit itaque sint doloribus et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...