What do I need to do to break into Prop trading?
I'm a senior in high school, and I'm applying to colleges. I have heard about prop trading, but as I spent more time reading about it I have come to like it. I tried to look up resources/guides to become a prop trader, and I haven't found many quality posts.
What kind of math do I need to know? (Took Calculus II and got As, but took some work though)
What degree do they look for? (Econ/Finance or Math/CS)
Does undergrad matter? Would I need to get a masters/PHD?
Does prestige of the university matter for undergrad? (For IB it matters a lot)
Bump
Major in CS.
Agree with the above poster. They won't even look at you unless you get a degree that has some emphasis on programming. You need to go to a very well-respected school and major in a hard mathematics degree/minor in CS or major in CS strictly. Then, you need to know mental math EXTREMELY well, being able to calculate probabilities especially quickly.
Example of a great candidate: go to MIT and major in CS/math, join the poker club, and have a GPA above 4.0 (they're on a 5.0 scale).
No, prestige of the school doesn't matter quite as much in prop trading as being able to do quick mental math, but it's hard to get looks from a no-name school without a well-respected program. Pure intellect matters more, but it's easier to get your foot in the door with a name-brand school.
Prop shops only take the best of the best; you need to be a top-tier candidate to even get looks (networking matters but not nearly as much as the things I mentioned above).
Don’t over complicate it. Call a few shops and ask them what to do. If you’re willing to bring your own money to the table and have a decent trading strategy they will get you licensed and provide leverage to trade. The firm I was in talks with would provide 20 to 1 leverage to start. I would have brought 50k to the table and would have been trading with 1 million to start. You do the math on the potential return. My only concern is can you handle the stress, pressure, and can you control your emotions? Are you good with risk management? Prop trading in simple- save your money, learn everything you can about trading and the markets, and create a working strategy that yields return.
This seems to be the type of trading most think of when they hear "prop trading".
1 million sounds like it offers huge upside, though you lose 5% and you're out of your 50k and out of business.
Being so risk averse sounds like it would also diminish returns, therefore the leverage doesn't always help.
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