Hi everyone,
I'm currently a rates quant at a large, established BB (GS, JPM, etc).
I have two opportunities in front of me: an opportunity to begin trading Macro Options flow in the sell-side, or to move to a crypto startup.
Comp would be the same for the first year, but I'm looking for career advice pertaining to what you think my trajectory could look like 5 years out under both paths, namely the trading role.
To be clear, the crypto role is not random. I've been keen on the space and I would consider myself knowledgeable.
Some questions I would seriously appreciate answers for:
- What skills as a sell-side trader are transferrable? I don't clearly see many that extend outside of a risk-taking position, outside of maybe analytics development.
- How reasonable is it to see sell-side flow traders on macro options desks making 1mm+ on good years? Would you reckon these individuals are in the 1% of traders, or is this relatively standard as you advance?
- Would going into crypto and trying to re-enter a sell-side/buy-side role be challenging? I don't know how keen groups are to recruit experienced hires who have left the finance industry
- What are your views on the sell-side industry over the next five years? Is it still contracting, or has the market volatility since 2020 made economics more attractive here?
If any other remarks come to mind, please let me know. Thanks monkeys.
By macro options trading, do you mean rates or fx options? CDX options?
Sorry -- rates options for clarity (will likely delete this comment in the future)
Personally seems like a choice between buying a stock on yourself or buying an option. At the junior level comp is less variable but also less risk of getting fired. I think your in one of the desks that could certainly transition to a macro HF so if you want more upside later on and your pretty good that option will be there. Personally chose BB trading over prop trading because I wanted more time to get my feet wet and develop/build a network both within the BB and buyside clients. I'm in a flow macro derivs desk too and found it to be more interesting compared to crypto(which I find interesting too). I definitely understand the attraction, desk heads at crypto natives have like 4-6 years of experience so there is definitely more opportunity to take on responsibilities and become a expert early on. My choice was between S&T vs prop and I thought of it as more variance both ways but your decision seems harder since for the crypto role, it seems like the risk skews to the upside.
You have synthesized my dilemma in a very eloquent paragraph.
The base comp looks similar for the first year, but I'm aware of how comp scales in the trading role. The head of the desk has clearly communicated expectations for my growth there. The question is whether I'm determined and passionate enough to succeed, and only I can answer that. Outside of the immediate path, as you've stated, the exit-opps are pretty well-defined to other allocation, HF/risk-taking type roles.
Conversely, getting to focus on new developments in crypto + expand my software skillset is attractive. It's harder to quantify the future upside as this is due to the lack of structure and the infancy of the space. I also see a path forward, though it is unstructured and more opaque.
An aside: I think BB flow over prop is a wise decision early on. Provides ample time to grow intellectually and the prop side will always be there. Thanks for the thoughtful feedback, sb'ed
Would say rates vol is the easy choice here. After learning the products and trading your own book, it will be easy to go to a HF or even into crypto given crypto is a relatively easy product to learn. Also, the ability to keep your job through drawdowns while you go through the learning phase at a bank as a junior is underrated.
Lets say you have a $100 portfolio for a typical book lets say macro rates. How much is value at risk?
Appreciate the feedback and makes sense.
In ways this feels cut and dry but definitely looking for more opinions/takes as I’m not in a particular rush.
come back in two years, the crypto startup probably won't even exist then
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