BB Trader analyst here (derivative product but not super flowy). Is it possible/probable/a path well trodded/ a good idea to pivot into a quant trader role at a proprietary trading firm or market making firm? Current job is very cool but I’ve become disenchanted of the a) lack of risk taking appetite and b) relative lack of quantitative analysis in terms of how to trade.
any stories of breaking into prop/quant trading from the sell side?
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lots of prop threads on here
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Different kind of trading. BB S&T is about market making and flow trading. Prop trading is a bout PnL. There’s similarities but you have to prove your quant skills if you want to go that route.
Do you know linear algebra? Stochastic Calc? Can you code? Ever use python or R?
It’s not impossible but if you wanna go to Jane st or optiver you’re gonna have to beat out kids with masters in math and engineering.
Well the guy above clearly does not work for jane street or optiver. I work for a tier one prop shop.
It is true that most of my colleagues and junior are excellent at math and programming, but none of us are doing sto cal and we spend 20% time coding at best.
By the end of day what you will need to do is generate pnl, and most shops do that by having traders doing good trades, taking good positions and managing a complicated portfolio of risk. We also keep track of flows that has market impact and pre-position for it. You need quant skill to better predict pricing but most of the tools are fairly intuitive and very far away from some machine learning model.
Another color for you is that most shops in the industry are a lot less quantitative than you think. jane street for instance is very flow based in trading style, especially in options.
It's true that not many people can make it to prop trading from banks mainly because it is a very different set of skill, so less transferable means you have to start from relatively junior level. You will have to learn a lot from scratch.
You said about 20% coding at best for the traders. I guess that would be applicable for the options team. How about D1 traders there? I reckon that some shops like optiver, DRW, IMC have jumped into D1 business quite a while ago, and guessing they are purely systematic so more coding/stats analysis would be needed there?
Very firm and desk dependent. IMC is generally very systematic so traders will spend a lot more time coding and improving their trading systems. A firm like Optiver will see traders actually trading/adjusting parameters on their trading systems in real time for more of the day but will still run scripts/investigate trades after market hours/when markets are slow. But, any firm will have traders, especially junior traders, doing a fair amount of data analysis/modeling work alongside their trading responsibilities. Not sure what semi-systematic tier 1 prop shop (Citsec, IMC, DRW, Optiver, JS) won't have junior traders coding. Only one I can think of is Optiver, but their trading style is less intelluctual haha
Given OP is doing derivate trading in a bank I didn't think it was worth mentioning D1. But yes all of the D1 trading down in these shops nowadays are doing very hardcore coding, beyond just data analysis.
is it possible for systematic traders in BB(ex: automated MM, CRB, eFX algo) could pivot into D1 roles in prop shops? If so when would be the right timing, and if not, could you explain some reason for that?
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