strategy difference between chop shops and proprietary trading firms?

other than the capital contribution that some so-called "prop trading" firms like LYNX, T3, SMB, etc require as opposed to Jane Street, FNYS, etc., what is the difference in strategy between these kinds of firms? Do real proprietary firms day-trade often or at all? Does anyone manually day trade or swing trade stocks at real proprietary firms like at "prop shops" or is all equity trading algorithmic there? Are the options real firms trade mainly vanilla like at "prop trading shops" or mainly exotic, and are they done manually there? How about hours? Do traders at real proprietary firms take the Series 56, or is that just a boiler room test?

Also, how quant is the trading at those places? Do the guys who get hired actually need to do multi-variable calculus in their heads at the snap of fingers?

4 Comments
 
euroazn

Also, how quant is the trading at those places? Do the guys who get hired actually need to do multi-variable calculus in their heads at the snap of fingers?

If you've done a single interview, it'll be obvious that the answer to that is no.

Legit shops focus on market-making, which is a completely different business model.

well I've not gotten interviews at real trading firms, but I'd love to.
 

Do some reading, its not very difficult. Also, people wont ask you questions that you clearly wouldn't know. If you didn't major in mathematics or statistics, they wont ask you about heteroskedasticity or martingales. For many of the shops you just have to be smart, however there are a significant number of shops that do require strong CS or technical backgrounds. Jump Trading came to a campus career fair and they were asking kids to write out coding problems on the back of their resumes, and this was just at their event table. Not a bad way to weed out kids that can't handle pressure and think on their toes, and was also hilarious to watch.

 

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