Prop Trading (MM) v.s. BB Sales and Trading

Undergrad here weighing between prop trading (Chicago top-tier options MM) and BB S&T in NYC. I previously thought I wanted to go into prop trading due to the entry level comps and technical aspects of quant trading, but recently I began considering long term prospects and it seems to me that BB S&T provides greater flexibility and potential, though it comes with a ~40% cut in base pay compared to prop trading. I can't really imagine myself doing options MM forever, which seems like the case for prop trading.

I do not have to necessarily commit to one over the other at this stage, just wanted to hear some thoughts on the topic. I am particularly interested in understanding more about long-term salary and progression prospects, exit opportunities, stability and lifestyle (Chicago vs NYC).

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Comments (23)

Apr 27, 2021 - 9:06am

depends on the desk at the BB S&T.   some desks are known for firing the juniors who do not excel, and they end up with little to no transferable skills...who then are left with a hard time getting a job.

which S&T desk is your offer for?

just google it...you're welcome
  • 1
Apr 27, 2021 - 10:42am

It is a rotational program so I probably won't know which desk until after the internship ends. What desks do you recommend in general? I'm pretty interested in rates, would that be a desk with transferable skills?

  • Analyst 2 in IB - Gen
Apr 30, 2021 - 3:59am

For what it's worth, my understanding of BB S&T internships (based on two roommates I lived with during my IB internship) is that it's pretty useless - all you really do is watch the analysts do their work and then maybe handle some of the smaller tasks and do summer projects. 

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  • Managing Director in S&T - Other
Apr 27, 2021 - 5:30pm

Truly, both jobs you have a high chance of being fired within 18 months with little gained. Further based on your questions and concerns do not think you will truly fit in or enjoy the prop firm feel and work. Banks are a great place to be these days as they just had a series of really good quarters but unlike the old days they are overhiring/growing like mad becoming quietly more niche and good at what they do.

Salary wise, the bank is always going to trail the prop firm as you can see from the difference in pay to start out. But all your other concerns are going to be much more at a lean flat style prop firm.

Apr 27, 2021 - 6:31pm

I'm a quant trader at one of the "top" options MMs. Don't have any first-hand experience at a bank (very few people in the world have both so take bold statements comparing the two with skepticism), but I'm glad I chose the route I did. I like the complexity of the product, the space has lots of activity (thanks WSB!), and my coworkers are all smart, technically-minded people. If you end up trading derivatives at a bank I'm sure those are true there too though.

It's true that most people don't exit from this job into some PE/HF kind of thing. You can lateral to a similar position I guess if you want to do some quant stuff with a different firm or asset class, but I mostly see people exit finance entirely into CS/engineering/academia (or just retire). Not great for networking opportunities if you are looking to just use it as a stepping stone. If you have a STEM background, the quant aspects some of these roles have will also let you show some transferrable skills (coding, data analytics) in the case you get cut or decide to move to something else. (Note: Cuts can happen, even to the target school 4.0 kids-make sure you have a plan)

Pay is great especially for the hours (~45 at my place but some are longer), but it's still going to take a decade+ to have a shot at breaking 7 figures.

I think it comes down to how quanty you are, how strong your location preferences are, and what kind of exits you want to have.

  • Quant in HF - RelVal
Apr 28, 2021 - 6:38pm

Do you ever see guys coming from buyside quant risk or similar into quant trading firms? Have a combined target stem + quant finance background and trying to angle for that type of role after I get a couple of years under my belt.

Apr 29, 2021 - 7:34pm

We get plenty of quants from other firms, buy and sell side. There are a variety of quant positions though, and different firms use the labels differently (especially for the term quant trader). For QR and dev type roles, prior experience always seems like a plus. For quant trader specifically, I'm skeptical that having a couple years of risk quant is really going to help. Although we get a couple of junior traders each year that had prior full-time non-trading roles, the vast majority of us came straight out of college, so by that metric it doesn't really seem like other experience is really valued much vs. the target school stem background you already have. If you were looking for a quant trader role at my company specifically, I'd encourage you to just apply now.

Apr 28, 2021 - 9:49pm

funny...every quant trader i know from a bank has gone to be a quant trader at a hedge fund

just google it...you're welcome
  • Trader in PropTrad
Apr 29, 2021 - 12:20pm

+1, agree with most of this.

What makes you think it will take a decade + to reach 7 figures (in yearly total comp)? What has your trajectory looked like?

Aug 19, 2021 - 2:41pm

How does pay typically progress for a quant trader at these MM shops/prop shops? Assuming one is good enough to stay around, then presumably they would be competent enough to progress at a BB - it then just comes down to luck/politics. However, at that top MD+ level, how do salaries at BB compare to those at these quant trading firms? I understand you said you haven't worked in a bank before, but perhaps you have heard via others?

May 4, 2021 - 12:55am

Options MM here, and I will say I hear the concern of "I don't want to be an options MM forever" a lot both online and when networking with people from my alma mater. What a lot of people fail to realize is any top-tier prop firm does a lot more than make markets in options. One of the biggest benefits of prop firms being funded exclusively by internal money is that theirs no outside investors to question new money making ideas. Basically every major prop firm has groups doing everything under the sun to make money. From RE, internal hedge funds, crypto, VC (SIG made like a billion on Bytedance), quant sports betting etc. If there's a way to use smart people to make money the top prop firms are probably doing it. While you'll likely start out making markets there's def room to explore other areas without even leaving the firm your at

May 26, 2021 - 12:25pm

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