Salary Expectations For Prop Trading Firms
I'm wondering what prop traders actually make at tier 1 firms (Optiver, Jump, JSC, Citadel, etc) vs at tier 2 firms (Akuna, CTC, Belvedere, Consolidated, etc). It is extremely difficult to find good numbers online as glassdoor does a great job of underestimating the salaries. If you're an average trader at these firms, what can you expect after 1-2 years? 3-4 years? 6+ years?
If you're joining a prop firm and you're in it for the salary, this industry isn't for you...
At the Tier 1 firms, you start with a base of 80-85 K. Bonus can vary a lot depending on how you perform and which desk you are on. Some desks make much more money than others. You can make up to 200-300 K all in after 1-2 years if you perform well. After 4-5 years you can make 500K+. But there is a risk you make 0 bonus if you lose money and if you keep losing money you are out of a job.
Is it tough to get into tier 1 firms and how long would you say it takes to get into that catagory.
I am guessing OP is conflating salary and all-in compensation.
tz15 is incorrect. Base is no longer 80-85k at top firms these days. All top firms are offering >100K base now. If you do not believe me, check h1bdata.info for any of these firms - e.g. Citadel, Optiver, JSC, etc.
First year bonus has a wide range amongst different firms - you can expect ~50-100% of your salary in bonus if you do well.
Most top firms in 2018 are offering first-year all-in compensation (salary, signing bonus, year-end bonus) of 250K+. 2018 has been a good year for many of these firms and thus a lot of offers have gone up a lot compared to previous years.
I guess I was wrong. It was 85K when I started. Must have gone up now.
Top tier firms right now are paying >= $100k base. You can expect to make anywhere from 50-100% of that base in bonus your first year in average to good market conditions. Anything beyond that is highly firm dependent.
This is no longer an era where firms are underpaying base and promising "upside". All the good firms realized that they need to pay strong base salaries to woo the top STEM talent that they are all fighting over.
The tier 1 firm is promising 105k base while the tier 2 firm is promising 80k base. The thing is, I think that I would be very above average at the tier 2 firm while I would be at best average at the tier 1 firm. I was wondering which one would be better if I were only looking at compensation.
If you’re really focused on compensation, you should be thinking of where you’ll perform at your best in an abstract sense. That includes the usual suspects of a good boss, strong teammates, other quality of life considerations as well as how advancement looks for top performers. These are intangibles that are often used as justification that “it’s not all about the money,” but even when it IS about the money this can be very important, maybe not in the short term, but maybe so and definitely in the long term.
It’s tempting to go where you think you’ll be above average. But think about the implications and down the line. Maybe you’re not above average right now at the other higher paying place because you weren’t eating and breathing true quantitative skills your whole life like some from different backgrounds, but if you’re passionate about this and work for a few years, why couldn’t you be above average? Yes, of course the others could do the same thing, but you’d be surprised how many promising brilliant people start coasting at some point in their life. Or are you saying you’ll never reach that point no matter how hard you work? Then is prop trading right for you, when the competition eventually kills off you and your firm who never will be able to reach that level?
Furthermore, even if you’re below average still... you’re not competing with these people. If you’re working with brilliant people, the tech stack is probably better. There’s more people you can ask for help if you want to better understand something. Ignore reward for the moment... Don’t you think you would perform better in terms of PnL numbers relative to yourself at the other place? Then if you’re below average and everyone’s throwing up better numbers, doesn’t that just mean the firm as a whole is more likely to do better, so you’re less likely to get stiffed at the junior level?
Anyway that’s my rambling. Remember that those considerations are important. I will agree that salary is not everything, but I figure it’s an important signaling effect for the firm offering it. It’s no coincidence the salaries tend to be highly correlated with the quality of people at these firms. It means they’re more confident in their ability to consistently pay their employees a larger amount because they’re more confident that employee will be worth it, and would rather have him or her be comfortable outside the office so they can kill it every day they’re inside the office.
Just don’t think ONLY in terms of the salary or where you’d be “relatively” better to others... only relative to YOURSELF.
Being average at a top tier firm is worth way more than being "good" at the next tier.
First sounds like Optiver
Fit matters the most as they are all legit firms. However, there is more upside variance for tier 1 firms. People with 4~5 years experience at tier 1 firms pulling 1M+ are more common (but definitely not the norm) than people at other firms. As other people mentioned, this is mostly due to the high volatility this year.
~150k base salary for the "top tier" names you list. total first year comp around 200k+ ~100k base salary for the "2nd tier" you list. total first year comp around 150k
None of these firms will go under any time soon, all will reward strong performance. Pick the place you fit in most and think will learn the most. Don't pick a place that doesn't train you or one that is a sketchy trader arcade.
QWEigniteR is on point.
It’s almost entirely about who you working with. And not the specific firm. Many have siloed teams with tech the entire firm isn’t using.
It’s likely best to pick the group you like the best and the financials will come later.
As a side not for the partners paying out salary isn’t a big deal. That’s money they have to pay taxes on. Especially on their futures trading they are on a 60-40 long term/ordinary income tax rate. Paying out salary is just something to write off of their ordinary tax bill.
I recently got an offer at a firm that is probably towards the bottom of tier 1. 100k base, $10k bonus for first four months (training period). I was told that a typical first full year bonus is around $50k and that compensation is set by matching whatever Citadel/Optiver pay, more or less.
Was this firm Virtu?
I recently got an offer from them that was similar to the one you just described
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