Small prop shop offer: is it a big deal?
Hey fellow monkeys, I have gotten an offer from a small prop shop in Amsterdam Area (60k Euros pa + Bonus). My other offer is from non-MBB (think Accenture/ATK/LEK/Strategy&) in consulting role in India. I would definitely choose Prop Trading over Consulting for a similar level firm but here I am confused for the following reasons:
- Prop Shop is 2-5 y/o and hence no idea about it's market competitiveness or stability
- Exit to other trading desks, is it difficult if I don't have a brand name?
- Smaller portfolio and less experienced professionals in small prop shop
- Exit to non-trading roles is definitely tough (although for me trading seems > other profiles)
- Getting fired (in lieu of negative portfolio, although unlikely) would mean end of my Visa and seriously halting trading/non-trading career
- MBA can me into a HF job later which could transcend to a prop shop offer from a big firm
Having said that, I have always been risk seeking and entrepreneurial and am really up for it if guidance says so but trying to evaluate if small prop shops mean anything or should I keep trying to make into a big prop shop.
My questions transcends into this:
1. How lucrative really is a small prop shop offer vs a big prop shop offer (Optiver, Flow Traders, Jane St)? Although, I've also heard that growing with a small prop shop could mean more money in later stages of life, I don't see the logic of this. Small prop shops have lesser infrastructure and lesser portfolio allocation per junior trader and hence I don't see a lot of point in joining such a firm rather than trading on my own (except for the Visa of course)
2. Should I get into consulting or take the trading offer?
Please prioritise answering the 1st question over 2nd (because I think I would have almost hear all opinions of the 2nd one, but something new is much appreciated)
Take the prop job. If it doesn’t work out get the mba then do consulting.
I thought of that. But getting an MBA post trading job (that too a failed one) would get me into not great B-schools. However, if I take up the consulting job, Yale SOM, Duke, Kellogg are very much open to me, which would not be available if I do trading in a non-reputed shop.
I would give it a shot if you are more interested in it. You should be able to still get into business school.
Or get in backdoor thru part time programs.
Another advice I got was to do consulting for 1 year, have a cushion and achieve profile building for MBA. Then apply for prop shops and see if it works. But this is hanging in the middle, hence not sure. Sorry if I'm all over the place. Just trying to put in different opinions.
Honestly there is only one speed in life. Don’t put off doing what you think you want to do. You will be miserable.
My experience is on the commodity side (physical, paper and market-making) but my two cents--very few people who want to be a trader will succeed, and make a career out of trading. Either you have the skill-set/mannerisms to make money or you don't.
WIth that said--if you want to be a trader, you should start trading first and see if it's for you.
Thanks for the advice man! With your experience can you tell me a little but about the monetary increment in trading over the years. My starting salary in the prop shop is over the roof. I want to know if I manage to survive how much would I be earning when compared to other fields as well. Any info would be appreciated.
Highly variable. You'll get a base but your bonus will make majority of compensation--the more you make each year, the higher % of PnL you can take home.
Think of your future at the prop shop based on the structure and products they work with. Are you just going to be trading equities? or will you have the chance to move into other areas as you progress? I think that prop trading can be lucrative but you should heavily consider the support the firm offers, as you said w small firms this could be lacking.
Personally I would rather commit suicide than live in India so I'd take a job at mcdonalds as well. But seriously, just give some thought to what specifically the prop shop has to offer since it is a tough/stressful job especially out of school. You can even give it more time and find another offer? Why limiting yourself?
They work with equities primarily and a little with rates and commodities. Mostly they try to work with volatility movements and leverage that. The team leadership is experienced so the guidance is good but in a 12-member team there is obviously a limited exposure. However, when you say support if you mean technical support, I don't know much about that but I'm guessing it's obviously much less when compared to the bigger players.
I'll get out of India soon just wondering if it should be through trading right now or through a lucrative MBA 3 years later. I can find another offer in a prop shop 1 year later and work in consulting till then (would be a good cushion as well). However, who's to say if I'll make it in again considering that I'm an overseas applicant after all.
Frankly, prop trading, especially in a small shop is not for everyone. Unless you are into that stuff and have the stomach for drawdowns ((sounds like these guys do something or other quanty), you are going to hate it.
Non-MBB into MBA has a much higher expected value
How so? Prop trading has higher optionality. Quite frankly it’s not that tough to get into Deloitte or Accenture or something like that or tier 2. You can spend a year or two to figure that out then swap to consulting.
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