Trader Experience in Prop Shops

TopTrader's picture
Rank: Monkey | banana points 45

For someone that wanted to develop a long term career on Wall Street as a Trader, would it be beneficial to maybe get your foot in the door at a proprietary firm? Work your way up as you gain experience?

A lot of the proprietary firms seem to deal in day trading, are the skill sets you learn able to be transferred if you were trying to get a position at maybe BB with higher volume taking long term positions?

Any insight would be very helpful seeing as how I am only a college student. Thanks.

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Comments (2)

Apr 30, 2010

Hi TopTrader,

I'll share my thoughts with you since I have worked in both these areas. The best way to get from college to the trading desk at a bulge bracket bank is to join that bank's analyst program. It is possible to make the transition from trading at a prop firm to a bank's dealer desk or prop desk, but it is a very difficult way to go. If your product is booming, like say equities in 1999, or MBS in 2006, trading desks may consider external junior level hires especially if demand is out of sync with the recruiting calendar. Your networking abilities as well as your trading record would be key here. However, it is extremely difficult to become profitable enough to even support yourself at most prop shops. The majority of traders fail after a few months.

I believe "Day Trading" experience would be relevant on most sell side desks although the frequency of trading would be a bit slower(by no means long term). A bigger difference would be that sell side trading is much more relationship oriented that prop. A high frequency hedge fund might be a better option for a successful prop trader. A trade assistant, or even maybe a sales assistant position would probably give you better exposure and connections to the sell side. My advice would be to think about what product you want to trade, why you want to work on the sell side, and which firms you think constitute "wall street." Then perhaps use that information to find the right post-college job. Good luck.

May 2, 2010