This is more aimed at the only person (shorttheworld, i think) I know on this board who has first hand experience of this but any and all contributions are welcomed.
Prop shop trading:
Reward structure 1: Standard trader salary + 20% PNL discretionary bonus, dependent on team, contribution to other factors not just individual pnl, performance of company, and whether your boss likes you much at all.
Reward structure 2: Minimal Salary for first year then no salary, 50% PnL reward structure paid 4 times a year, pay is in contract and is an equation, no discretion applied. Drawings against PnL allowed.
It's not for Trillium, but similar pay structure (2).
And for the traders out there, would your pay go up if you were paid by option 2 (qualitative answers only please, yes or no).
I don't think anyone can even fathom a guess at this question.
What is a standard trader salary and what is a minimal salary? One could be $80k, the other could be $10k. One could be $55k, the other could be $25. Those variances alone are huge.
Additionally, nobody knows what product you are trading or how you are trading or how big your books are at either of the firms. Nobody knows how many people usually end up with the full +20% discretionary at Reward structure 1.
Also, a lot of it is going to be based on what YOU prefer. Do you want all the responsibility riding on your shoulders or do you feel more comfortable working with a team?
From the minimal info you gave (feel free to PM with more details - and you'll get a better response) you want the first option. I've had both. basically the difference is the second one fosters an environment where you will NOT learn anything relevant from people who are senior and successful. so if you think the simple training program they give you for a couple weeks, plus "what the market teaches you" will be enough to sustain years or a lifetime of trading gains, then you should take that. I started in a discretionary for 18 months (training) then became completely indep. but even 10-12 months of training is not sufficient to last a lifetime of independence.
The first option makes it so that since you're part of a team, you are expected to pull your weight - more responsibility = more learning. Theres plenty of 24 year old prop traders who stroll in at 10AM leave at 3, think they're the shit, but honestly, they're not shia lebeouauoiuf from WS2 and I've seen too many fizzle out. stability is also key in these mkts. it gets very stressful thinking that shit, i had a bad quarter, so much for that sweet thing i was gonna buy.
Agree with ab62008. But if I was an experienced trader with some money under my belt already, I would take option 2. 50% PnL is huge and I'd rather have my bonus 100% PnL based so I wouldn't have to care about office politics, performance of others and just focus on trading. If you are just starting, option 1 seems better.
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