Compensation at Prop Shops
Hi guys,
Can you guys shed some light on the pay progression at prop shops? I got an offer at an options market maker (think Optiver, Tibra, IMC, etc), 60K+ starting (I'm in Asia, so this is pretty decent).
How much bonus can I expect the first year, given that its pure training for the first 6 months?
How much money can I expect to make in total comp if I'm an average trader after 5 years? 10 years? I realize the pay varies a lot for traders, so some ball park figure (i.e. 25%-75% precentile, or similar) would be very much appreciated.
Thanks.
same question - but in the US
Don't use these words. People will rail you on these forums for doing so.
This is an easy question to answer how good are you?
If you're good you'll easily make six-figures including bonus. A friend of mine made $300K all-in at Optiver in his first year out of college because he came up with a strategy that did pretty well.
I can't speak for Asia, but in the U.S. Optiver pays a base of $80K, and I'm pretty sure IMC and Tibra pay at least $70K.
So if you make Partner/Director at one of the aforementioned market makers (IMC, Tibra, Optiver, etc), I'm assuming most/all can clear $1M USD total comp easily? How about $5M USD? I'm just trying to benchmark against other professions (i.e. IBD MD comp is probably around $1M - $3M USD from what I can gather).
You can make way more in prop trading than you can in IBD, but it's way less stable and entirely based on how great your PnL is. If you bring in 20MM in one year, I wouldn't be surprised if you pocketed over 5MM personally. I'm just not sure how many guys out there have this type of year. At least a handful I would think.
I know guys that have pulled down 300k+ in a month.
me too. Maybe we know the same people
I know a guy who made more than that in one day and he's just two or three years out of college. I also know guys who were fired within one year of joining the desk and are thoroughly convinced the game is rigged. That's the beauty of prop trading.
Me too, but they also lose 300k the next month. Its funny no one reports their losses. Annually some of these guys break even and then its OFF TO THE STREETS.
nah I dont start yet, got 2 months.
U JELLY?
hey boutiquebank4life/dukeofduke/ekudekud, go.fuck.yourself.
Expect your bonus to be entirely dependent on firm performance. As all of these prop shop / MMs have grown, they have gotten increasingly more corporate so that even "good" traders are not necessarily paid until several years down the line. Especially with the advent of HFT, it is harder and harder to distinguish oneself as "good" if the firm already has strategies/technology/successful platforms. FWIW, I would say typical pay would be something like this: Year 1 - X Salary + .3X Bonus (everyone) Year 2 - X Salary + .7X - 2X Bonus, but likely X Bonus Year 3 - X Salary + 1.5X - 3X Bonus Year 4 - X Salary + 2X - 4X Bonus
etc. etc.
Yes, MDs get comped absurd amounts. But there are only a handful of guys at these places (think 1 MD for 40 people) who are both young and getting paid. And often, it is undeserved because the comp is "discretionary" meaning no link to PnL. So kissing the right butts matters. Also, retention is quite poor, with maybe 40% of a recruiting class still there after 2 years.
If you've joined trading to be happy with average trading salary, get out fast. The average grade in an exam is a C, happy with that? Never aim for average, or base yourself on it, you'll always be unhappy.
So many people hate when people ask what does an average trader make, etc. Why?
Averages are still very telling.
It would be great to know what the 25th, 50th, and 75th percentile make at various prop shops versus BB IBD versus BB S&T versus BB prop.
It is fine to have the mentality that you want to be the best, but only one person is the best so you need to be concerned what everyone else does.
Say the average GPA is a 2.5 with Teacher A, but one student gets a 4.0.
Meanwhile the average GPA is a 3.7 with Teacher B, but no student got a 4.0. What teacher would you rather pick?
Stop the hate... or at least have a logical reason for hating.
I hate because it displays a naivety about the world of trading. It's like saying what does the average gambler make. Do you include survivorship bias? What about the averages losses of people that get fired? The net average? Probably zero. Is that a helpful answer? No. Hence the hate. Ask a stupid question, get a stupid answer.
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