Salary Expectations For Prop Trading Firms

If you're joining a prop firm and you're in it for the salary, this industry isn't for you...

At the Tier 1 firms, you start with a base of 80-85 K. Bonus can vary a lot depending on how you perform and which desk you are on. Some desks make much more money than others. You can make up to 200-300 K all in after 1-2 years if you perform well. After 4-5 years you can make 500K+. But there is a risk you make 0 bonus if you lose money and if you keep losing money you are out of a job.

I am guessing OP is conflating salary and all-in compensation.

tz15 is incorrect. Base is no longer 80-85k at top firms these days. All top firms are offering >100K base now. If you do not believe me, check h1bdata.info for any of these firms - e.g. Citadel, Optiver, JSC, etc.

First year bonus has a wide range amongst different firms - you can expect ~50-100% of your salary in bonus if you do well.

Most top firms in 2018 are offering first-year all-in compensation (salary, signing bonus, year-end bonus) of 250K+. 2018 has been a good year for many of these firms and thus a lot of offers have gone up a lot compared to previous years.

Top tier firms right now are paying >= $100k base. You can expect to make anywhere from 50-100% of that base in bonus your first year in average to good market conditions. Anything beyond that is highly firm dependent.

This is no longer an era where firms are underpaying base and promising "upside". All the good firms realized that they need to pay strong base salaries to woo the top STEM talent that they are all fighting over.

The tier 1 firm is promising 105k base while the tier 2 firm is promising 80k base. The thing is, I think that I would be very above average at the tier 2 firm while I would be at best average at the tier 1 firm. I was wondering which one would be better if I were only looking at compensation.

Fit matters the most as they are all legit firms. However, there is more upside variance for tier 1 firms. People with 4~5 years experience at tier 1 firms pulling 1M+ are more common (but definitely not the norm) than people at other firms. As other people mentioned, this is mostly due to the high volatility this year.

~150k base salary for the "top tier" names you list. total first year comp around 200k+ ~100k base salary for the "2nd tier" you list. total first year comp around 150k

None of these firms will go under any time soon, all will reward strong performance. Pick the place you fit in most and think will learn the most. Don't pick a place that doesn't train you or one that is a sketchy trader arcade.

QWEigniteR is on point.

It’s almost entirely about who you working with. And not the specific firm. Many have siloed teams with tech the entire firm isn’t using.

It’s likely best to pick the group you like the best and the financials will come later.

As a side not for the partners paying out salary isn’t a big deal. That’s money they have to pay taxes on. Especially on their futures trading they are on a 60-40 long term/ordinary income tax rate. Paying out salary is just something to write off of their ordinary tax bill.

I recently got an offer at a firm that is probably towards the bottom of tier 1. 100k base, $10k bonus for first four months (training period). I was told that a typical first full year bonus is around $50k and that compensation is set by matching whatever Citadel/Optiver pay, more or less.