laid off prop trader = screwed?
I worked at one of the better known prop trading firms in chicago.
After 2 years, I was let go. I don't think I want to rejoin another trading firm. What options are there where what I did for the past 2 years may get me an interview? thx
most obvious questions...what products did you trade and what was your total P&L?
you are going to have to give more info. background?
I'll just address the first part of the question as I'm not interested in another trading job where my past P&L matters I traded macro products (interest rates, fx, etc)
Execution role in similar products for a bank or brokerage? Even if you weren't profitable prop trading you might be able to help customers execute trades less badly. Someone who actually wants to take a position in a product doesn't need as much short-term edge. If their clients are currently just taking MMs quotes they could potentially do better executing into the trade passively at times similar to what a market-maker would do. Banks already do this though so might not be a huge market, especially with low volumes causing them to cut staff as well.
Do you have any programming or quant skills? There are a lot of data scientist roles at startups or companies like Google that require a similar skill set. Pay is probably worse than what a top prop trader would make but about equal to a mediocre one plus better work/life balance and less stress. You'd probably have to move to NY or SF.
If you have experience in a relatively unsaturated asset class it's worth talking to recruiters to see if any smaller firms are interested. Lots of them are hurting and looking for anything new. You could potentially get a nice guarantee.
lets step back and ask the question...what do you want to do? Traders trade because they love it. Investment bankers ibank because they...well..i couldn't tell you why...i assume they like the idea of talking with company CEO's & CFO's...and they wanna make $$ but they can't trade. Doctors doctor because they generally love medicine and helping people. Lawyers lawyer because they like the idea of being a smartass and getting paid for it. Other than being a company CFO, or a finance / political science teacher...being a macro trader doesn't teach that many transferable skills...but its great for conversation at a cocktail party.
On the flip side...generally the only people who want to leave trading are those who don't make money (aka..not very good) doing it...i mean...i've never heard of a successful prop trader saying "dang...i just hate making all this money...i think i wanna go be an accountant"...but i have heard the reverse...
The most important question is why were you let go??
i have an edit for my prior comment...one thing prop trading teaches is immense attention to detail and the ability to multi-task. You could look for a career where those skills are applicable...medicine is actually a strong candidate if you don't mind the whole additional 4-8 years of school/training
Start your own business! Trading's saturated, full of people thinking they're going to turn 10k into a million dollars in a short time frame but don't realize that this is the exception and not even remotely close to the rule. So many young guys getting into business now, look into franchises.
What happens to Prop Traders that fail? (Originally Posted: 12/13/2008)
I have an offer at one of the firms on the Best Prop Firms list (bear with me, I know that there are other firms). Say that I work at the firm and I get let go before finishing a year there. In this market, what choices would I have?
How likely would the following be? - grad school - another prop firm - a bank or hedge fund - some other finance company - anything else
change professions altogether. that is an option you left off your list! No more finance! I would imagine I would try to get into B-school and weather the downturn.
they go work for Bear Stearns or lehman brothers.
We're about to enter a Great Depression. Don't you want a president who's already dressed for it?
This is one of things that worries me so much. What the hell do I do if i fuck up at a prop firm? The only exit opp a trader has is another trading position.
Realistically, if you get laid off from a finance job within you're first year, you're screwed in this environment prop or not. I love all the exit opp posts that have been popping up before people set foot on the job.
Trig,
It's called risk management, considering the worst case scenario which is a skill critical in prop trading.
You either stick with it and grind your way to profitability, or you eventually realize you cant hack it and leave the industry altogether. Lets face the reality, most prop traders that lack a true edge are going to fail. This is a tough reality as these people have been a sucess their entire life.
As far as what do you do if you fail thats a really good question. I cant answer that even to myself at this point. You should only be focusing on positive things at this point as any negativity could really hamper performance in developmental stages.
I suggest reading these 2 books. The Secret - Rhonda Byrne Trading in the Zone - Douglas
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