From a shitty Prop Trading firm To top HF?

Bill Ackman's picture
Rank: Orangutan | 271

Hey Guys!

I'm planning to join a shitty prop trading firm with my capital allocation, and will be getting series 57, 20:1 leverage (which is most important thing for me). Gonna be working for 9 months until I graduate and will see where I can go.

But where I can go? If I wanted to go to Top tier Hedge funds which position should I be applying for? I heard most HF suspended prop trading.

I wanna end up working for BlackRock, I like their corporate culture. Is that doable with a year experience as a prop trader (let's just assume I'll make a kill on P&L)

Where can you after working as a prop trader?

Comments (15)

Best Response
Nov 22, 2016

"I'm planning to join a shitty prop trading firm with my capital allocation, and will be getting series 57, 20:1 leverage (which is most important thing for me). Gonna be working for 9 months until I graduate and will see where I can go.

But where I can go? If I wanted to go to Top tier Hedge funds which position should I be applying for? I heard most HF suspended prop trading.

I wanna end up working for BlackRock, I like their corporate culture. Is that doable with a year experience as a prop trader (let's just assume I'll make a kill on P&L)

Where can you after working as a prop trader?"

hedge funds is a very broad Asset Management category. be more specific -- do you want merger arbitrage, bond arbitrage, long/short equities, distressed debt...? You see my point?

investment banks suspended prop trading (although it still occurs, its more camouflaged).

BlackRock is not a hedge fund. it is a traditional Asset Management Company. What do you know about their corporate culture? Why not just apply there?

Best way to transition to the buyside is through being an expert in a niche in the market. So, research is a good place to start.

Again your post is very vague in terms of detail to get more a more concise answer. Please elaborate on what you want to do.

For example, on trading desks, interest rates sales/trading is a great way to learn macro trends, monetary policy etc. This transitions well to macro funds that speculate on FX, rates, and commodities (Australia and Chile, for example are heavily driven by metals prices and world growth)

Before you commit yourself for 9 months without direction, figure out what path you want to go down, what interests you

    • 4
Nov 22, 2016

I'm coming from a non-target school with average GPA.
I highly doubt I have a chance to get an interview or internship with Top tier banks and HF.

I've been trading stocks and options with my personal account, make alright just need the leverage to start marking more.
I was reading here that it's easy to transfer from top prop trading firms to top hedge funds.

In future I just wanna trade. What position should I be aiming for in HF or IB? I don't like talking to people much, just do my own research, read books and trade.

When the rich wage war, it's the poor who die

Nov 22, 2016
Bill Ackman:

just need the leverage to start marking more

Classic

Good luck man. Just do yourself a favor and read Market Wizards if you haven't already

Nov 22, 2016

Oh god, is this guy serious? Time to get raped by the comment section.

    • 1
Nov 22, 2016

if you just want to trade...why not open a futures account with InteractiveBrokers, and trade futures (and options on futures).

Depending on the product, futures give you leverage up to
10x (Gold & Silver)
20x (S&P futures)
50x-20x (10yr T-notes/T-bonds)
100x (FX)

You can trade from your laptop anywhere with an internet connection...

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Nov 23, 2016

Yes. The problem is I don't trade futures, metals, bonds.
And IB gives x4 leverage on stocks. I daytrade stocks and x20 leverage would be helpful

When the rich wage war, it's the poor who die

Nov 23, 2016

I strongly recommend reading and learning all you can about the style/product you trade now.

Futures is a prime example of getting the leverage you seek. Is this a good idea? Meh. Probably not.

Point is, the ONLY reason anyone should he trading in the market (trade, not investing) is IF and ONLY IF you have an edge. You should know what that means if you read Market Wizards.

If you don't have an edge and risk your own money, that's your call, but an investor or bankroller for you will not give you a penny unless they believe there's a reason you can make above average returns (high Sharpe ratio)

Food for thought. It's a competitive market out there and every basis point counts.

    • 1
Dec 1, 2016

You only traded for a mere two years in a low volatility, uptrending market. Things will begin to change soon, and there's almost a certain chance that your performance will not be as good as your past two years if you raise leverage that much at once. Not only because of changing markets but theres also a psychological aspect as well.

Is your strategy quantitative/systemic? If not, top tier hedge funds don't just let you trade just because you have some 'decent' pnl using mom and pop scale money, using your intuition.

If you really want to get into the field, my advice is, get some technical education especially in CS, then go for entry level execution trader position. From there, you can build career and move on to more discretionary role if you find an opening.

When ppl say it is 'easy' to transfer from top props to top hf, it maybe misleading BC both are extremely difficult to enter in the first place.

    • 1
Dec 1, 2016

Thank you for your reply. Probably best posted here.

I have a pretty strong background in coding. I'm trading very simple breakouts and breakdowns. Never fails
I am currently working on making it automated and can't think of any other strategies.
Is there a good source of trading methods or somewhere I can learn methods?

When the rich wage war, it's the poor who die

Dec 1, 2016

If you have background in coding, maybe quantopian is a good place to start. Although I don't respect any trading strategies there, it's a good place to begin your systematic trading education since they have bunch of ipython nbs that has lectures on pairs trading etc. Once you get comfortable with that, pick up books in quant trading, theres a decent book named algorithmic trading by.. i think his name was ep chan or something.

Making pnls using these won't directly get you a job, but will at least help you in your initial interviews for execution trader roles fresh out of college.

But on a separate note, if you're not adamant about going for manual trading, it might be better to just focus hard on your coding skills if you're already strong there, be a c++ wiz and apply for quant prop firms.

    • 1
Dec 15, 2016

"Never fails" - I hope you realize how naive this sounds.

Dec 14, 2016

"I'm trading very simple breakouts and breakdowns. Never fails"

Are you for real? I've traded futures professionally at two prop firms for 3 years. The minute I read something like "never fails" it just takes away any credibility from whatever you're saying / planning on doing. All these new guys who want to get into trading think that their bedroom discount broker trading is legitimate experience. One thing you'll learn at a prop firm is to be humble.

    • 1
Dec 15, 2016

From what I see... this guy has no idea what he's doing... Trading breakouts? Let me guess, he trades using triangle formations... oh brother.. I'll give him 2 months at most.

Dec 15, 2016
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