RBC vs Chicago prop trading
So I already have an offer to be a trader at a prop shop in Chicago but I recently got a call from a friend at RBC and he offered me a job as a quant in their cash equities execution division. Now the RBC job is in NYC and I am not sure which one I should take. Any advise would be very helpful. I'm a new grad graduating from my undergrad. Also where will I get better growth opportunities and better exit ops.
Thanks
I'd much rather be in NY than Chicago personally, and also, RBC has been doing fantastic lately. Not sure how growth opportunities/exit ops would compare between the two though - I'd guess it depends on what prop shop it is that you'd be going to.
It all depends. What about the prop shop, is it a reputable firm, are they offering you the training and time you'll need to have a shot at being successful? If not, you might want to go with the RBC job. If so, the prop position will offer you potentially much faster career/pay progression albeit with significant higher risk of not making it than the RBC gig.
The RBC position will, in all likelihood, involve no, or hardly any, real trading activity from your side but focuses on mathematical analysis supporting trading decisions and execution strategies. In terms of future prospects, the RBC position offers more safety and could lead to a trading position if you'd want to. Downside here is that execution trading isn't the best place to start. The reward for a successful prop trader is to continue trading at increased renumeration. Banks are not keen on taking on former prop traders and the opportunities for unsuccessful prop traders are pretty bleak.
So the prop shop is Infinium Capital. And would the RBC allow me to transition into say a Hedge fund a few year down the line?
Check out that trading desk!!!
http://www.infiniumcm.com/index2.aspx
[quote=manbearpig]Check out that trading desk!!!
http://www.infiniumcm.com/index2.aspx[/quote]
damn it, i tired to zoom in.
[quote=manbearpig]Check out that trading desk!!!
http://www.infiniumcm.com/index2.aspx[/quote]
Looks like the matrix
I'd say prop. I hate working for huge companies.
RBC hands down.
A quant at a cash equities execution desk sounds like all you would be doing is writing code for electronic trading or RBC's DMA system...you should clarify what the position is...if its a prop position then take RBC, if not id go with the Chicago prop offer.
Your young.. what 21..22? Take the RBC job. I don't care what you are doing. Stack your money and build your resume with the bank experience. If a prop shop was willing to hire you now they also will later down the road. From what I've seen it does not work vice versa. Plus if your buddy is high enough up on the food chain at RBC to "Call you up and offer you a job" , he's awesome to have in your corner because he will further open doors. Do not pigeon hole yourself so young.
Good Luck Trading!
wtf are you talking about? You aren't going to be stacking any money in NYC in a non-trading role, while at Infinium his all in comp is pretty much guaranteed to be >$100k his first year while living in Chicago with much better hours. And if he is good, he'll be trading in 12mos at Infinium....
So the only concern I have is that I am not sure what kind of work I will be doing. The team is known as the execution advisory team and they primarily do analysis on the traders and see how to improve facilitation and unwinding. he also look at liquidity and TCA.
Tough decision. Infinium is a good respectable shop. Overall, having a bank trading experience is much better than prop for an initial post-college job unless it's a truly elite prop shop. But in this case, the job is with cash equities execution, which is quite boring, and doesn't allow you to develop any meaningfull skillsets that can transfer over to other areas. At least with infinium, if you do well, you can run your own book and have the potential to make a lot fo money. Plus, Chicago has a lower cost of living and a better place for post-college kids.
This is precisely what I was referring to. Given that the OP has shed some light on what he'd be doing at RBC, I think that the prop shop is the best choice if you want to actually do trading.
So I'm not sure if I actually want to do trading as I really don't have any experience doing it. Also I'm not sure which position would be better for me to transition into a hedge say in a few years
This is a tough one. Since infinium is respectable thought I'd say take that. You'll make more money quicker if your good.
@ jerome
Wtf I'm i talking about? haha shut your loud mouth ass up. Kids say the funniest things.
@ quantyoungling
You are entering a world where NEW entrants on the street are getting slashed all across the board. This is not 1998. Jobs and patients are slim for those without skin in the game. You go to RBC with the sole thinking of adding to your resume with entry level experience, seeing what strings your buddy can pull, and save whatever you actually do not need to spend outside of rent, transportation, and food. The chances of going bust at the prop level are there. You may also find trading is not for you. You are not about to embark on a one size fits all endeavor. Go to the bank "look around" and ask question. See if you even like this environment. If you get fired at the prop shop good luck getting hired at another firm. I've looked at resumes, hired/fired interns, and hired/fired full timers. I'm giving you real world advice for right now. To hell with a "What if".
Good Luck Trading!
Real world advice? People from Infinium have actually traded--at banks, at large physicals (HETCO, BP, etc.), at the cream of the crop HFs and prop shops (Citadel, GETCO, etc.). You're really talking so far out of your ass it isn't funny.
I agree that the OP should take infinium, mostly because the RBC role is not even real front-office. However, very few people at infinium have traded at elite prop shops or hedge funds (either before or afterwards).
@ Jerome
Hahahaha You are seriously dumb as fuck. You have no form of common sense what so ever. Your mother should of swallowed your ridiculous ass.
I think the amount of misinformation on this forum is kind of ridiculous. Do you have experience as a market maker? Do you have experience working for a bank in trading or as a quant? If not, do not give advice or provide a disclaimer.
I interned at a prop shop in Chicago and am joining a prop shop when I graduate.
Market making is a small world, and it's very specialized. It is very different from working at a bank. My very limited understanding of trading at banks from friends who did SA stints at Goldman are that it ranges from salesman type roles like in prime brokerage to execution trading to structuring. Im not sure what your role would be at RBC. You should ask about future career paths.
Here's what I know about prop trading. My understanding is Infinium is a pretty reputable market maker. Prop shops are notoriously secretive, so specific info on prop trading is incredibly difficult to find, even more so for high frequency, because they are most likely to have non competes (they pay you to not work in the industry after you leave).
That being said, I don't think you can go wrong with prop trading. I interviewed with banks and they definitely seemed way less consistently profitable - I asked a director about consistency and he said he was still down for the year. Market makers tend to make money day in day out. A down week on the individual level is uncommon. A down month is quite rare.
If you're worried about exit opps, understand the training at a prop shop Ike Infinium will make you very valuable. There are lots of former prop traders at banks. You have specialized training. You can join another shop or a bank. In fact, I know people who get fired from prop shops in as few as three months and end up at a BB or in an internal hedge fund.
I worked in the industry, so I'm going to come out and say respectfully that I totally disagree with your last paragraph. Infinium is indeed a good shop; I interivewed there recently with the COO of trading. But to assert that working there alone will make you very valuable to other prop shops and hedge funds is not quite accurate. Unless you are a hardcore quant (especially those at a place like getco, jump, teza, hudson river, etc.) or a "discretionary" trader who has a VERY impressive pnl and a strategy that can make money consistently, your exit opportunities after a prop shop are not that great. This is why so many ex-traders end up going back to school to beef up their technical skillsets (MFE for example) or to make a career transition (MBA). I recently talked to a former DRW trader, for example, who left after 5 years to attend a top b-school because he was unable to transition into hedge funds or bank trading desks.
I think you are very misinformed yourself man. Besides some corrections already done by others, no one seems to point out the biggest mistake in your post. Market Making is not different from working at a bank, because banks are market makers. In fact pretty much all traders that are not cash equities at a bank are market makers.They don't only have sales, execution and structuring. That's only true for cash equities. A BB bank like Goldman makes markets in pretty much all products in Rates, Credit, FX, Commods, EqDerivs, EM, etc... In fact the biggest market makers in pretty much any security are banks. If you think a down week is uncommon and a down month is rare and that people don't get fired VERY easily at a prop shop you're in for shock when you join full time...
this thread is lame. if u want to work for bank work for a bank. if you want to trade go be a trader. it isn't freaking difficult.
You're probably right about infinium exit opps since you talked to them. I have not and was extrapolating from talking with people who were or still at shops like sig, optiver, spot. Really surprised about your friend at drw. What type of trader was he or she?
I am a prop trader in Chicago and I came from a bank desk. A few thoughts:
(1) Prop trading - even at the best firms - does not offer the job security that a bank does. Infinium can probably offer you the best job security amongst prop shops, but you won't be as safe as you'd be at RBC. If you have student loans and/or other liabilities, this is something to consider.
(2) That said, the trading community in Chicago is pretty tightly-knit - if Infinium didn't work out for you, you would almost surely be able to get a job at another, albeit less reputable shop.
(3) If you are hell bent on actually trading, you should go to Infinium. The best thing about prop is that you don't have to bother with busy work and other sales and logistical shit that banks dump on you. If you want to trade, you'll find the work at Infinium more rewarding.
(4) You can make a lot more money a lot faster in prop.
(5) There are plenty of bad prop shops that don't teach you anything and give you a set capital limit and tell you to go (eg - Trillium). That's not where you want to be - Infinium is a better shop with a reputable training program. That said, the skills you learn in prop are not transferable to HF or banks.
(6) Overall, I'd view Infinium as the "leveraged" bet - if you're committed to trading and only trading, take it. If you want a well-rounded introduction to the financial sector that provides better job security and a broader, more transferable skill-set, take RBC.
Congrats - both opportunities sound great!
This is different from the information I got from prop shops and friends, who are probably biased. Granted, I only interviewed at a few prop shops and the ones I was lucky enough to get interviews at were very well known.
A friend's boss at a BB was originally from a prop shop and spent a few years there.
Most of the prop shops I've talked to seem pretty stable. The only source of uncertainty is within the first 1-2 years when they're training you and assessing whether you'll be any good. After that, few traders get fired, though people do leave for other reasons - get bored, want to start their own shop, move to a different firm. Granted, the chance you'll get fired in the first 1-2 years ranges from 30% to 70%.
The other impression I got from talking to friends at banks is that you don't really leave to go to business school, you stay in S&T at a bank. You might move to a different bank, but you stay in the same field, and if you get fired, you'll probably move to another bank at a pay cut, not unlike a prop shop. A family friend got fired from Goldman Sachs after ten years as a sales traders, along with a bunch of her other friends. They are no longer in finance, and they are not wealthy enough to retire.
I'm not sure about quants at banks. They probably have more transferable skills. Our firm hired a guy who was a quant, but he also ended up doing an MFE, which is probably a bit of a career restart. and he's joining at the same level as the rest of the undergrads, but he'll probably do more quantitative work.
Anyways, full disclaimer, these are of course anecdotes gathered from a senior still in college. I'm still pretty surprised by the above comments, given the uniform picture I got from friends, interviews, and actually working.
Anybody who tells you that prop trading and/or prop trading firms are stable is lying. The whole point of those shops is that they offer the ultimate "eat-what-you-kill" experience. Veteran traders go bust all the time, and sometimes entire shops - even reputable ones.
First New York Securities is going down as we speak. Another example is TransMarket Group - they were a firm full of veteran eurodollar traders with decades of success, but most of them went under when the Fed destroyed volatility in front-end rates.
I can name people at all the big shops - DRW, SIG, Jane Street, etc. - who washed out. People go into this industry knowing that's a very real possibility, and you should too.
^ Wow. Can't believe how misinformed I was about the risk. This is definitely good advice. Thanks for correcting my error.
Except TMG and FNYS were not pure market-making firms like DRW/SIG/GETCO and will have much more volatility in their returns. Comparing them is about as stupid as it gets.
^DRW, SIG and Getco are not pure market-making either "Jerome"; there is not a clear distinction between prop and MM, and you'd have to have been oblivious to the Dodd-Frank/Volcker Rule debate of the past 3.5 years to believe otherwise.
Furthermore, market-making can be MORE risky than spec in trending, highly correlated markets (ie - what we've been seeing increasingly for 3.5+ years).
I suggest you maintain a civil tone and don't call certified, experienced users "as stupid as it gets".
Yesman, I thought Getco and SIG only did market-making in equities and equity derivatives. Or have they branched out into more discretionary strategies recently?
lmao other than Don's spec book, what discretionary/non-MM trading provides significant p&l to DRW? Would love to hear that one. All of those shops have the lionshare of their profits coming from mark-making (or highly related activities--ie vol arb), so fuck off for nit picking irrelevant details that don't change the main points.
@Brady - This is a classic case of "those who know don't tell". Every prop trading shop has it's own tricks and the only way to figure it out is to work there. But consider that these firms are sitting on a lot of cash - both equity and leverage - and the "pure prop" space is in a power vacuum via Dodd-Frank/Volcker Rule. It's a fair assumption that they're making some pure spec plays.
@Jerome - You are a prospective monkey. What job do you have? What jobs have you had? What gives you the right to have an opinion? How many futures contracts do you trade in an average day? For me, it is over 50,000. Put up or shut up you fake wannabe.
Prospective monkey? I work in the industry and have done pretty well in my short time. Do you live in Chicago or NYC (I'm in both cities regularly)? What product do you trade 50k/daily contracts in? I run a desk for an int'l prop shop (one of the firms that has offices on 3 continents) trading one of the highest volume products on the CME and generally make-up 5% or more of all option volume in the product. What do you do?
If you want to talk about putting up or shutting up, let's meet-up for a beer this week and you can tell me all about your size futures trading and how you're moving the markets, bud. Would love to learn from such an amazing size futures trader like yourself.
Some people are misinformed.
Market making is done at prop shops AND at banks. In fact, most of the flow that people trade at banks is from market making. I'm not sure why people are saying market making is not existent at banks.
^Yeah. I was misinformed.
That being said, in stat arb (of the shops I've talked to), a down month for an individual is rare. This is based on talking to traders and from what I've seen through internships. I'm sure it's different for riskier strats, but in stat arb, it is really rare, simply because you're doing so many trades in a day.
^Maximus, do you work for a bank? How do banks make markets? Are they doing thousands of trades an hour or are they trading more illiquid instruments or otc and taking in a fatter rake for their troubles? I've heard of banks that do more high frequency stuff like goldman and morgan stanley's pdt, but I've never seen any recruiting for those desks.
Also, I've interviewed with banks, and in general, I felt like those guys just weren't as sharp (maybe because they didn't think I was quite as cool/jocky), so I'm pretty biased. I interviewed with a director, and I ended up taking 100 bucks off him during the interview because he made a mistake in making his market and I called him out on it and told him if he was so confident we should play the game 10 times.
^Yeah. I was misinformed.
That being said, in stat arb (of the shops I've talked to), a down month for an individual is rare. This is based on talking to traders and from what I've seen through internships. I'm sure it's different for riskier strats, but in stat arb, it is really rare, simply because you're doing so many trades in a day.
^Maximus, do you work for a bank? How do banks make markets? Are they doing thousands of trades an hour or are they trading more illiquid instruments or otc and taking in a fatter rake for their troubles? I've heard of banks that do more high frequency stuff like goldman and morgan stanley's pdt, but I've never seen any recruiting for those desks.
Also, I've interviewed with banks, and in general, I felt like those guys just weren't as sharp (maybe because they didn't think I was quite as cool/jocky), so I'm pretty biased. I interviewed with a director, and I ended up taking 100 bucks off him during the interview because he made a mistake in making his market and I called him out on it and told him if he was so confident we should play the game 10 times.
How do banks make markets? The same way anyone does. Like I told you in my original post, big banks literally trade anything that exists. From highly liquid cash equities to the most exotic options on EM highly illiquid currencies. They do have electronic desks for highly liquid products. To follow your example, I know GS and MS have at least spot FX and cash equities electronic and program trading desks (not the same thing). And they recruit for those desks from the general S&T analyst pool. You can even do one of your summer intern rotations on those desks. What do you mean you haven't seen any recruiting? They don't specify all the desks in their website, which would just say something like "We have Rates, Currencies, Credit and Commodities" but when you get the list to pick rotations as a SA you generally get something like 40-50 different positions of which 15-20 will be trading positions. And those trading positions can be subdivided, like FX Trading includes spot, forward and options trading desks, and in many cases (as MS and GS) a specialized EM desk. Rates will probably have cash, derivs, exotics, inflation and fx/rates correlation traders. Which will be subdivided in different currencies, like Sterling rates, usd rates, euro rates... So there are literally hundreds of different groups making markets at a BB bank, like I said in pretty much anything you can imagine, and doing all kinds of trading.
oab729, you obviously have no idea. I'm laughing at how retarded that last part is "I called a director out because he made a mistake making his market".
Anyway, just to clarify for everyone - most market makers/traders have a budget (hurr durr). Barely any product can reach budget without taking on proprietary risk. Point in case is spot FX. So in effect I doubt there are any pure market-makers out there at all. If you hit budget one year from just making markets and capturing spreads, guess what will happen next year? Your budget goes up. So on and so forth. Such is the nature of the game.
A market maker facilitates execution for parties external to said market. Whether it be providing them access to interbank FX or through some obscure hybrid product. Market makers typically have to warehouse risk too as it's not as simple as charge client X and then selling it for an amount less than X - you operate in a competitive market. The client could be asking 5 other banks. Also that's not taking into account sales margin (those pricks). Lastly, what do you think happens if you win the trade and want to tip some risk out? People know someone was sniffing around. You obviously get made extra wide.
Most traders are effectively prop traders now in essence.
My 2c.
EDIT: I suppose I should address the OP. On the basic info you have provided I would offer you this outcome: - If you really really really want to be a trader, take the prop trading job if it is at a reputable firm. - If you want to work in financial markets but don't care so much for what you are doing exactly, take RBC. In today's market, coupled with the fact that you may very well not be a profitable trader (facts of life), they're a decent place to work.
Also, if it's something tied to execution or some such I would be wary - cash equities will be in a sedative mood for quite some time. People invested massively pre-GFC and also in the March 2009 'lull' where equity markets rebounded massively because they thought the gravy train would continue. I don't think we will ever see a time like that again. If it's some sort of stat arb role then that's different, the skills are transferable and I would think an even better career path than a discretionary prop trader.
^^ FXOhhh
You're right. I have no idea how banks trade. I've only done stat arb, which is why I asked.
I still think stat arb is fundamentally different from other types of trading, because you do so many trades in a day and your inventory risk is much lower, since you hold inventory for a few seconds to a few hours.
Consequently, because you do so many trades in a day, it's easy to know whether your trade actually works or doesn't. As a result, I think stat arb tends to be much less risky. Your main risk is whether you can continually come up with new strategies to run.
^Maximus.
I went through bank recruiting for the general S&T pool. I made it pretty clear early on that I was interested in more quantitative roles and automated market making, but I got the general impression that these roles were not available to undergrads. A lot of my friends ended up taking S&T SA stints and they don't me about what rotations they were selecting from. I remember there was not anything like electronic market making.
I find that very hard to believe. There's a typo in your sentence, so I don't really understand, but if you have friends who interned at banks they must have known someone interning on an electronic trading desk. I interned at 2 different banks and in both you could go to electronic trading desks in FX and CashEq. I know for a fact (I've seen the list, PM me if you want to take a look at it) that this year's interns in MS London can directly choose Equity Electronic Trading and Equity Program Trading. Maybe they just didn't specify it? Like I said, many banks don't give the whole breakthrough of the desks (they can't really predict needs to that level). So for example, they guys who go into Electronic FX are chosen from the FX Trading analyst pool, so you might just have the option of choosing "FX Trading" without being able to specify further. But when it comes to Cash Eq, like I said, that's not my experience, nor what any of my friends interning/working at banks have told me.
@Jerome - I'm in Chicago. I trade treasuries and EDs, both futures and options. Name the place/date/time buddy - you can even bring your whole little desk to explain to me how market making is different that spec/prop.
Ha. I would love to meet up with you and Jerome, here in Chicago.
What would be funny is if yesman and Jerome worked at the same place and they didn't even realize it.
^ Ah Okay.
Yeah sorry about the typo. The list I saw just specified commodities. Most of my friends were in sales type roles, like prime brokerage. One friend did do fixed income, but based on what he told me, a lot of the transactions are done over the phone.
^ Sorry, by "just specified commodities," I mean, the list didn't break up rotations in terms of electronic or not. So the list was something like
Cash Equities FX Credit and fixed income Prime Brokerage Structuring Commodities
But electronically traded commodities would be under Commodities as you said.
None of my friends knew anything about electronic trading, and a lot of them were pretty curious how market making worked. The stuff they were doing did not sound anything like the type of stuff Jane Street, SIG, Spot and Optiver do.
It's still weird to me that electronically traded commodities would be under commodities. I think of stat arb as a strategy that is not product specific at all. I.e., if you're trading stat arb you trade everything, commodities, equities, derivatives, structured products, fixed income, FX. Each market has some eccentricities, but one guy could be running strats across all these markets (this was how it was at my old shop).
Would be really curious to know more about how banks trade. PM me if you want to talk.
Could start a new thread. Probably some real good info to be had
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