Job security in Prop Trading?
I'm not sure if this is the right forum but it's the closest thing on here, so I apologize if this needs to be moved. I'm a freshman in college studying math+stats and minor in cs, interested in quant trading. I'm having second thoughts about quant trading, though. I like probability/math so QT naturally came as a career choice. I'm no math genius but have qualified for AIME and taken a good amount of math courses (multi var, lin alg, probability theory, game theory, etc.). I've also found studying for QT interviews as a fun game rather than boring, which is probably a green flag. I've read online that QT is incredibly competitive and that if you're not a top performer that it's likely you may be out of the industry in less than two years (although I heard nowadays most prop shops are 80%+ retention for juniors). QT doesn't seem to have many exit opps beside FAANG (SWE is boring too me so don't want to do that). I'm afraid that if I dedicate the next three years of life to landing a role in QT and don't end up making it that I'll lose opportunities in other fields. I don't mean to brag but I'm at a T2 target (columbia/duke/uchicago/penn) so I also have opportunities to go into IB/PE tech groups which would also be interesting to me and have a near guaranteed career progression/exit opps. Biggest turnoff is the WLB as I value relationships/hobbies/family/etc.
Based on the most helpful WSO content, job security in proprietary (prop) trading, especially in quant trading roles, can indeed be a concern for many entering the field. The competitive nature of the industry means that performance is closely monitored, and those not meeting expectations may find their positions at risk. However, it's also noted that many prop trading firms have relatively high retention rates for junior roles, with figures around 80% or higher being mentioned. This suggests that while the pressure to perform is real, the likelihood of being let go early in one's career may not be as high as some fear.
Your background in math and statistics, combined with a minor in computer science, positions you well for a career in quant trading. Your enjoyment of the problem-solving aspect of quant interview preparation is indeed a positive sign. It indicates not only aptitude but also the kind of passion that can drive success in this challenging field.
Regarding exit opportunities, while it's true that the direct paths from quant trading to other industries may seem limited, the skills you develop—problem-solving, statistical analysis, programming— are highly transferable. Beyond FAANG and software engineering roles, quant skills are valued in data science, algorithmic trading, and risk management positions across various sectors, including finance, technology, and even emerging fields like fintech and blockchain.
Given your concerns about work-life balance (WLB) and the competitive nature of quant trading, it's wise to consider all your options. Investment banking (IB) and private equity (PE) indeed offer structured career progression and a broader range of exit opportunities. However, the trade-off in terms of work-life balance is significant, with these roles often demanding long hours that can impact personal time and relationships.
Being at a T2 target school opens many doors, and leveraging your school's alumni network and career resources can provide further insights into each path. It might also be beneficial to seek internships in both areas to gain firsthand experience of the work and culture. This can provide a clearer sense of where your interests and values align best.
In summary, while job security in quant trading is a valid concern, your skill set and interests align well with the demands of the field. The high retention rates for juniors in many prop trading firms suggest that with hard work and a bit of luck, you can build a successful career in quant trading. However, exploring all your options, including IB/PE, and considering internships in these fields could help clarify your career direction while keeping your work-life balance priorities in mind.
Sources: Job Security at Prop Trading (Chicago Based), What to expect from a prop trading job?
My impression is that for new hires at most top trading firms a large majority that want to stay in trading either stay at their first firm or can find roles at other good firms even if they are fired from or quit their first role. It's going to vary more by firm outside top firms but retention is probably not fantastic and as you note exit opportunities are certainly more limited compared to IB. Getting a role at the top firms is also quite competitive as there are relatively few spots and I'm not sure joining most smaller trading firms is a good place to start a career.
On the other hand enjoying what you do has a large impact on how well you will do and thus job security so if you would enjoy trading and not banking I would still recommend trading although I guess if you dislike banking after two years you are in a better position to try something else so maybe banking is more attractive in that way if you aren't certain about trading.
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