Hi guys,
This is really something I need an answer to,
Basically there are 2 types of Prop shops:
1) Those like Amplify Trading, Futexlive, Blueprint Capital, Savius LLC
These firms basically recruit juniors without experience after enrolling them in a course (which you pay) and back them financially if they perform well on demo after 2-3 months. They also recruit experienced traders based on track record. Traders get paid on a profit cut scheme only/no basic salaries.
2) Then there is the Jane Street, SIG type of firms where you get recruited with a standardized process. You would basically get a standard salary package like you would get in banking + bonus.
I also know that type 1 follow more discretionary trading strategies by a mix of Global Macro/ Event Driven/ Technical Analysis mix,
Type 2 are more market making / algorithmic trading I guess?
I also wonder if both types lead to the same exit opportunities and if both can eventually open up opportunities for Hedge Funds / IB after a couple of years?
Bump
I work at one of the "type 2" places.
I'm not aware of a ton of people leaving, mostly because the 'type 2' places are giving you essentially the same salary/benefits and are similar work to what you would be doing at a hedge fund anyway. But for what it's worth, I've had several headhunters/HR people reach out to me through LinkedIn, so evidently you can leave if you would like to. They've all been from either other 'type 2' places or hedge funds (all of the large quantitative ones you've probably heard of). I don't think you would be able to move to investment banking (in the sense that people on this forum think of it, i.e. M&A / coverage groups) because the style of work doesn't involve analyzing companies at all. I'm sure you could move to doing trading/quantitative strategies at a bank if you wanted to (though I'm not really sure why you would want to).
Sounds Great.
By Investment Banking I was referring to FICC analyst, Sales & Trading Desks, Market Making, Commodity Desks,.
Is it also common for type 2 people to move to type 1 firms? or vice versa?
Day Trading Prop Shop - Exit Ops? (Originally Posted: 03/27/2009)
what are some of the exit ops for these daytrading firms? it seems like the skills arent really transferable to trading positions at BBs or HFs.
i am asking because i hear the success rate at these firms is pretty low.. so if i dont succeed, what are some of the exit ops? .. i'm not sure how top MBA programs look at these types of firms...
any help is appreciated.. thank you
What are the exit opps for a triple A baseball player?
AA?
There seems to be three routes...
A. You suck, they fire you, in a better economy you get a real job but now that is significantly harder
B. Your barely profitable but stick around for the longer term, not many exit opps
C. Your a baller and will most likely make more money there than any other place so you stay or switch to another day trading firm
What im wondering is if B happens, will you be able to just try and find another job next cycle
A is over a very short time period...maybe 6 months while the other two can last quite a while
Good question.. Is it possible to move into a decent MBA program if things don't work out?
I am assuming you mean after 3-4 years of being a little successful at a prop shop. I would say it would be fairly difficult. I really don't know why but thats just my guess.
To me it seems like the key is to really determine if this is something you can be good at 6-12 months into it. If you can do it, then do it. If not leave and try something else.
I've wondered this as well. I know guys at these types of places that make easily make 250k+ each year and some over $1 million. They have no boss and make their own hours. The drawback is that the strategies they trade might dry up one day or regulations might change such that they are forced out of business. For example, if DeFazio gets his transaction tax passed, every single one of these smaller trading shops would be out of business overnight. Or they might just get burnt out of the daily grind. After that I'd imagine it'd be like coming out of school again; it'd come down to how they could present themselves on a resume. It wouldn't be too hard to show how one must "excel under pressure" or "deal with adversity" (or whatever bullshit line) when trading for yourself at a place like these. Losing $80k-$100k of one's own money in a day or two then having the discipline to make it back isn't something most 25-30 year olds can claim to have experienced. I'd think, spun the right way, the (successful) experience of trading at a prop firm would be worth something to employers/graduate schools.
can anyone add to this?
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