Prop vs S&T
Currently a MIT/Stanford student. Have a few superdays lined up later in august for some prop shops (Belvedere, Akuna, IMC) also a few S&T shops (Citi, Wells Fargo). I was wondering what preference generally people have on these firms. Thanks
Bump
Sorry to go off topic but I was wondering - are the superdays going to be held onsite or online?
pretty sure all superdays in the US will be held online then
Your superdays at prop shops-- are they for fulltime roles or summer 2021 internships?
Depends on your risk tolerance and the firm... I would say Optiver/JS/Citadel> trading at MS/GS/JP maybe even Citi/barclays > IMC > Wells. Reason being it’s so easy to get cut at prop shops if you’re not good and banks offer much better brand name if you have to make a pivot which outweighs the pay for non top tier quant funds
I'll prob apply to JS/Citadel after I prepare around September. Would you say quant investing roles at places like AQR or even more quantamental roles at Wellingtom/Fidelity would be better than my current list?
Honestly as a MIT/Stanford student I would not even go for fidelity/wellington. I feel like u might be super upset with the inno and tech at these places. If it really comes down to that (which I think it def won’t since you’re obviously a smart student), then just go to tech or a startup if you can code.
I think one thing that comes through in your texts is a lack of confidence (thinking you’ll have to go fidelity or that you’re not prepped for top places). That quality is important for a trader, so be more confident about your chances. I’m sure you’ll kill it
Prop shops - live by the sword, die by the sword. You’re either going to make it or you’ll get cut 6 months down the road, great comp if you’re a solid trader. S&T - once you get on a desk, near IMPOSSIBLE to get fired unless you get laid off. Seriously, you have to fuck up bad to get canned. Decent comp, you won’t represent any real PnL though for a while so don’t expect 100k + bonuses as an analyst. As for Fidelity and Wellington - super stable, more comp than S&T, but you’re going to be on an AM strat so once again you won’t represent any real PnL for a while, tons of lifers at both.
Interesting. I always thought S&T was very volatile in terms of getting laid off/fired. I heard S&T pays slightly lower than IBD with far less hours. Does that still ring true today?
at the harsher banks, you have 18 months to prove your potential. at the softer banks, you have 3-5 years at prop firms, 6 - 12 months
Nah banks are just way less volatile these days. It’s expensive to keep rehiring, so most seats are pretty stable.
Op here, what's your opinion on like trader roles at places like Fidelity Cap Markets division? Is it basically the same as S&T at a bank?
Yes it is similar to the banks, more tier 2 ish though.
Agreed on this 100%. Operate with the risk tolerances set by the bank and youll be fine outside of layoffs or major restructurings etc. My cousin who works in PE said it best. “You are hired and treated as a pro athlete from day 1. You either Preform as expected or get cut”
Normally I would say this depends on your risk tolerance but the comp difference this year is too big to ignore. First years at Akuna and IMC are getting well over 300k while you would be lucky to get half that working 25-50% more hours in any S&T. In addition, if you are fired from a Akuna/IMC/Citadel level of shop, it's extremely easy to find a position at a lesser shop like Group One, Transmarket, Belvedere. In this environment, I would look to go to the top prop shops.
300k at IMC/Akuna? I swear even optiver only hits 250? Could you provide a source please? Thanks
This is just what is circulating around the industry right now since this year is something extraordinary. If you speak with people in the industry, I think you'll find that my numbers are very in line with what people are expecting and if anything, 300k is an underestimate for this year.
That being said, OP should not expect 300k for when he starts working. It is likely that 2021 will return to something more normal and you could expect the standard 200-250k first year at IMC/Akuna.
This is untrue. Starting TC at Akuna with no competing offer was around 200k and IMC was around 250k. With competing offer from another tier 1 shop 300k+ starts making sense.
What's the general opinion between starting at a (good) desk in S&T like GS/MS/JPM derivatives vs starting at Citadel/IMC? It looks like new grads going to Citadel or IMC would be making markets anyway with tiny prop views, so basically the same job as S&T, but banks have the upper hand with non-exchange traded products. Would a trader at a good S&T desk be able to jump to Citadel easily?
"basically the same job" is way off - the jobs are quite different. Jumping between S&T and Prop in general is rare, and also from what I've seen, the people at citadel/imc tier prop shops are much stronger technically than the S&T folk.
The job is completely different. In my own experience hopping from S&T derivatives to prop, in S&T you make amazing trades because of the connections you have. You could then lay off the risk to prop firms (often times the exact same trade) for a massive scalp. At prop firms, you have to find other ways to lay off and manage your risk instead of basically being a middleman.
In short, you need more skills to be a trader at a prop firm because the trades you have access to aren't as good as the trades the banks have access to.
Something else to think about, in S&T you have clients so if you want to advance yourself long term there is going to be that aspect as well. Also applies on the AM side to some extent as well.
Like said above depends on your risk or stress tolerance. I would think the prop shops you named would have a graduate program in place to try to bring you up rather than just throwing you into the fire. I would expect a lot of programming at these places to visualize data and develop strategies before you start put on risk. At a prop shop there is no stability what so ever, you could be making money and the firm decides that your product is tying up too much capital and your gone no questions asked. That being said compensation is significantly higher that banks. The bank name will go far if you decide that you don't enjoy trading. It will even be possible to lateral inside the bank if your a top performer. It really depends on what you level of risk you personally can take.
I would just emphasize that choosing a place for 1 year of comp is generally pretty poor as a heuristic. Like the guy who said top prop pays 3-400k out the gate - although this is true in extreme cases (e.g. you're a putnam fellow with 20 offers or we have another 2020 in terms of volatility), more likely your total comp will be a lot lower than that. Even if you print $250k your first year vs call it $150k at a bank, in the long term, it really won't make that big of a difference compared to working somewhere you enjoy.
Hours are better in prop but its not like you show up at 9:30 at leave at 4. You'll still need to work more to catch up with the seasoned guys there.
Prop has higher upside, but its higher variance and you're more likely to fail. S&T can still be technical (although you're not nerd racing), and has potentially good payouts as well (~1mm for top VPs). We've had a bunch of threads on prop vs bank, and it's really a personal decision. I wouldn't make the decision based on first year comp though.
3-400k first year TC is pretty normal at top shops now. With competing offers, it can go to 500k+.
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