Got own book. Here's my plan.
Hi WallStreetOasis,
Trader at IB. I'm about to be given my own prop book. Small risk limits (US$10mio) to start. But my name attached to the PnL.
Quite excited. Two quick questions: 1. If I made X in PnL, what % of X can I expect to take home. 2. Broader question. I like it here and I hope to SLOWLY build my own team. Does this work in the IB. I make consistant PnL (~1mio) each year, have profitable strategies. Boss likes me. PnL goes to hiring for my team. Hire 1 or 2 analysts. Strategies scale, more profits. Repeat. Have my own team in the bank running say ~50mio.
What you think?
Nijikon
You started managing a small risk recently and now you make 1mio (10%) consistently a year? Did I miss something? However, 1mio is no where enough to say "you're good"... and especially not enough for the bank to keep you around. What desk is this? Out of curiosity...
From the fact that you're saying "mio", I assume something along the line of currency?
OP - can you provide more specifics and not abbreviate?
Thank you.
i think he means he can hold 10mm in securities (his position risk limit) and he hopes to make 1mm of PnL (standard PnL range for a 1st year trader is 1-3mm)
BB traders get paid ~ 5% of PnL (desks with large flow business pay less, because the seat has value in itself...which a monkey can make, and you are expected to make regardless....prop PnL is what you make in addition to the seat expectation). if you don't have a flow seat that prints money (for example, the 10yr bond seat at JPM prints money)
So, at 5%, if you make 1mm, you would get paid 50k. Now, if you are trading 30yr bonds....10mm bonds is $3,125 / tick and about 20k of DV01. You should expect to make ~10 ticks on 30yr bonds per day on avg...thats 30k/day x 200 days = 6mm of PnL * 5% =300k bonus
those are some rough cuff expectations for a junior BB trader...your results may vary.
regarding "building a team" that's something to think about AFTER you are profitable on your own...don't waste time thinking about it now (i know, its exciting...its hard to resists that temptation...try to resist...focus on tomorrow....don't look a year ahead...thats the road to ruin...you don't want to start thinking about all the money you'll make and all the stuff you'll buy until AFTER you've made the money)
stay humble my friend...i used to be you
At a bank, 3-10% is the usual range depending on proportion of pnl in flow or prop (higher percentage for prop of course).
Just recently made the move to a BB, getting 6% over here.
Can I ask what product you trade? Also - off-topic - but would love to hear your thoughts on the Munis space, if you could offer an opinion there in terms of headcount/future of the product to trade. Heard it's really inefficient which is great for a BB trader which sees good flow. SA on a desk this summer so would love to hear the opinion of someone actually in the industry.
I am a muni trader, AO level. I’m on the underwriting desk, and do a pretty significant number of transactions. There are three kinds of muni traders - secondary traders, competitive underwriters, and negotiated underwriters. The two desks you want to be on are competitive and negotiated underwriting. Secondary traders are being cut more frequently, as odd lot trading is being automated. Most senior guys trade blocks, so almost impossible to place on the desk as an actual secondary trader. My advice to you - get on the competitive underwriting desk, as it’s a prop desk and if you’re good your compensation will be the highest.
As a student in college, I would like to understand how S&T works nowadays. I keep reading about the pre-crisis glory days and how S&T operations are getting downsized. More specifically, can market makers still have prop position, so the pnl will be based of making the spreads + the money made from prop positions? From what I understood also, when you get your own book, you get a base salary + a percentage of your pnl? I would love to get more clarity on the topic. Thanks!
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