I feel it’s worth it to have a salary discussion on here to get an idea of what salaries are like throughout the industry. Feel free to answer the below
1. Your current position (Prop trader at a quant firm, S&T associate at a bank)
2. Years of experience
3. Salary
For me:
1. Prop trader at quant firm
2. 1.5 years
3. $160k including bonus
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Location would be most useful too.
in trading, comp is most often directly tied to performance.
if you made 10mm trading, and only made 160k...that would be surprising. However, if you made 0 p&l, then 160k might make sense. If you are contributing to a team, then what was the team P&L....what was your contribution to that P&L (try to make an educated guess what the P&L would have been without your contribution)
You said you were a "prop trader at a quant firm". PropTrader implies that you are responsible for trading decisions (either manually, or via algos that you create), and so you should have P&L attributable to your name. If you are part of a team that is building algos, you should still be aware of what is the P&L of the algo. If you are at a large firm that separates the algo code writers from the execution and risk mgmt (so that you have no idea what the P&L is) then i wouldn't say that is a "prop trader" role...rather its "algo developer".
I'm also a prop trader, but i get paid a set % of my P&L. If i make 600k trading, i know exactly how much $$ i'll get paid.
Quant Trader PMs build their own algos...either write the code themselves or have a developer(s) write the code...and then the PM manages the algo (there are usually some types of dial turning and button pushing to do)...but these Quant PMs know exactly what their P&L is...and are typically paid as a % of their P&L. If they have developers writing code for them...then the PM usually decides what to pay the developer....but the developer is not a "prop trader".
Almost by definition, as a "prop trader" you must have a P&L attributable to your name (or your team...and then your role in that team). So, without clarifying that detail, comp is meaningless to compare. I know a guy who made 20mm trading, and only got paid 1mm (so, 5%)...and he was pissed. However, to you, getting paid 1mm would probably be great.
So, how about including what was your P&L, so we can compare your comp as a % of P&L?
Having comp as a percentage of PNL is not done in many big firms because it would just incentivize you to take huge risks without consideration for expectancy. Taking a 10 million coin flip would on average pay the employee more than a 100% chance of making a million, even though the latter is a better trade.
this is why prop traders have risk limits. prop firms won't let you take those kinds of big risks.
As an example, i recently interviewed with a firm that said "lose 500k and your capital gets cut in half...lose another 500k and you are fired...lose 100k in a single day, and you are stopped for the day".
So, then as a trader, you are incentivized to size your trades such that you never risk losing 100k in a single day, because you don't want to get stopped out.
pm me firm pls 350k in 2.5 yrs
Small firm so not comfortable revealing the name, but one of the usual suspects on the top HFT lists
pm me firm pls too
my last position where my comp was discretionairy (not a % of P&L)
role: bank trader (market maker for a specific rates product - P&L mostly from prop trading) year exp: 4 yrs trading + 6 yrs writing code in IT previously P&L: 8mm (my book) comp: 400k
i'm now a prop trader, and my comp is a set % of my P&L (no base salary)
Interesting that you still carried out prop trading while at a bank. Does the Volcker rule not prevent that or is there a way to get by it?
Volker does not apply to US interest rates market making.
But you mentioned prop trading...
as a market maker at a bank on a US interest rates desk running a book with positions, you have the ability to prop trade.
Which brings me back to my point - prop trading DOES come under the Volcker rule. I guess it’s just ignored.
If you actually read the "prop trading" law under volker there is a list of exemptions...US interest rates is one of them.
From Wikipedia
*Proprietary trading in Treasuries, bonds issued by government-backed entities like Fannie Mae and Freddie Mac, as well as municipal bonds is also exempted.
One of the biggest exceptions to the ban is the market making exception that allows market making trading based on Reasonably Expected Near Term Demand of Customers ("RENTD").*
“One of the biggest exceptions to the ban is the market making exception that allows market making trading based on Reasonably Expected Near Term Demand of Customers ("RENTD").*”
So market making is exempted... that doesn’t mean prop trading is.
How do you market make without using principal? Literally what answer are you looking for?
Market makers have to be prop traders in some sense to do their job, the idea of complete agency trading is unrealistic in the dawn of electronic trading.
as a maket maker....you are expected to simultaenously prop trade.
for example, lets say you are the market maker for the 10yr note....you trade 10yr notes with customers all day long (bidding and offering...getting hit and getting lifted). If you think the 10yr market is about to trade up, you can buy 10yr notes in the electronic screens, without any customer involvement. If ever asked, you could say "i thought the market was about to trade up, and i thought customers would buy from me when that happens...so i pre-hedged"
"Pre-hedgeing" is prop trading. You are taking a position based on your expectation of what the market will do. Whether customers actually trade with you is irrelevant...only that you "reasonably expected" that they might.
It is common for customers of a US interest rates desk to buy/sell several hundred million notes and bonds (biggest trade i saw was 2 billion....avg closer to 100mm)...so that means as a market maker that you can "pre-hedge" hundreds of millions and it will look totally normal. Trading 100mm, you can easily make/lose 500k-1mm per day in the treasury market on an avg day...and much more on volatile days. The avg treasury desk has a P&L of 50-100mm (some less...some much more...in the range of 1 billion). So, its really all prop trading.
Role: 4 years as an Interest Rate Option MM P&L (of the desk): mid 8 figures comp: low 7 figures
What the fuck - you went from ~300k to low 7 figures in 1 year? https://www.wallstreetoasis.com/forums/how-much-money-have-you-saved?pa…
Market condition is 2~3 times better brah.
Also i get paid in March so basically 2 years ago
About treefiddy.
That's not a trader, that's the Loch Ness Monster!!
Role: Macro Trader at Prop Firm 2 years $250k including bonus
2 yrs making 250k, pm me which firm
Pretty sure most of the top firms pay 200k+ total for the first year.
I work at Barclays on their Equities Floor in NYC.
I make 120K salary. I've been in the industry for 7 years now... I know, not a lot but I got laid off at BMOCM last month.
i know another guy (more senior) who recently got laid off from BMO...they seem to be looking for profitable traders...and have little tolerance for underperformers.
What are you doing at barc now?
I work as a TA for their program, elec/algo, single stock desk, international and convertible desk.
this page might be helpful: https://www.wallstreetoasis.com/forums/sales-and-trading-salary-vs-inve…
concerned about making it in the industry. i figure if i manage to last a few years then money shouldn't be a problem. goal is to live frugally and retire early
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