Career in HF vs Prop Trading Firms
I want to do trading but I always wonder whether it is right to do it in a prop trading firm (PTF).
For what I know the average salary is the same in HF and PTF (Am i right?).
But is HF career safer than PTF or not? Many say that in PTF is a lot easier to get burned.
Hey Monchi10, I'm the WSO Monkey Bot and I'm here since nobody responded to your topic! Bummer...could just be unlucky but one of these topics will help shed some light:
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Fingers crossed that one of those helps you.
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Surprised no feedback on this yet - My two cents:
Did hear that job security at prop firms is worse. But it's not hard to find a new job - My friend joined a prop firm in the US as a quant trader fresh out of college, got fired 5 months later, then landed at another prop firm within 2 months. Also heard prop firms' base pay isn't high, they mostly get paid based on performance.
Business-wise, lots of prop firms are market makers - what they do are taking bid-ask spreads, arbitrage, etc. Whilst in many l/s equity hedge funds you still have teams that dig deep into the companies' financials to evaluate their intrinsic value.
Take my words with a grain of salt though - I'm just an incoming analyst at a bank. Looking forward to more inputs from the true experts.
This is true but isn't the job of a trader; this is what analysts would be doing at these hedge funds. Traders would be executing in the market.
Thanks for correcting me 🫡
Intern at one of the large L/S hedge funds so grain of salt:
If you're referring to the quant prop shops like Jane Street then you'll be earning a noticeable amount more at those shops as a trader than as a trader at an L/S equity hedge fund since traders in L/S are mostly doing execution work.
If you're talking about traders at global macro-type shops then I'd imagine job security isn't all that much better than the prop firms but I don't much outside Long/Short equity.
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