What to expect from a prop trading job?

I've received and accepted an offer to start as a trader at a prop shop and while I have a decent understanding of my day to day job, I'm realizing I have a lot of unanswered questions about career path. I'm hoping you all can give me some insight.

I don't want to name the specific place I'm starting at but think Chicago prop shops. I know this makes answering some of the questions hard but I'd prefer not to make my cluelessness super obvious to my future coworkers.

1). How is retention among juniors at prop trading places? Are there any places known for having particularly high churn?

2). What percent of people who receive a full time offer end up being awful at it?

3). What do exit opportunities look like for traders at prop shops?

4). What is a typical career path for junior traders?

I appreciate any info you all can share.

 
Funniest

1) if you lose a lot of money, you are fired 2) if you make a lot of money, YOU make a lot of money 3) there are no "exit opportunities"....TRADING IS THE EXIT 4) there is no "career path"...you trade, you make money. that's it. 5) wake up the next day and do it all again...starting with #1

just google it...you're welcome
 

It's sort of a trendy thing on this forum to say that "S&T is dying," meaning that it's harder to make money due to spread compression, electronification, passive indexing (reducing active manager flows), etc.

In prop trading, this argument can be made about options market making. Most of the Chicago props are trading CME/CBOT options contracts, which are extremely competitive markets (thus yielding dwindling profits). Some props have diversified into OTC products, other exchange-traded products, or into random shit like crypto/RE.

 
Most Helpful

I’ll match your vagueness.

Regarding retention, there are some places (usually though not always the larger ones) that almost go out of their way to hire a larger class with the intent to cut many of them (often much more than half) in the first year or two in a series of rounds. All of my friends have been fired at least once from those places and it’s not necessarily always obvious why an arbitrary junior has been cut.

Other places are more selective about their hiring and are satisfied with their growth trajectory and would rather have high retention, not risk losing their secrets and strategies, and maintain the benefit of cultural cohesiveness. Those places it’s actually rare to get fired as long as you aren’t losing money and there’s no significant deficiencies in you as a person that comes in the way of doing your work well. These places tend to be under the radar, especially on these forums. One exception (and correct me if I’m wrong) is that Jane Street is one of these more well-known examples.

As far as exit opportunities, other traders above are correct that this is basically it. But I want to temper that a bit because that kind of passionate advice initially dissuaded me from quant trading, whereas I wished I had ignored that at first and just gone straight in.

Most of my friends have been fired within their first year or so. At the junior level, some have found positions at other trading firms that understand how their previous firm operates, and some of those individuals have actually gone on to do very well. Many others have gone back to excellent STEM graduate schools (especially if they quit on their own terms) while getting paid under the non compete. Others just went into Silicon Valley or joined a startup, and others were just entrepreneurial.

Echoing another poster above, if you perform well, you’ll be highly satisfied. And if you aren’t, you’re not totally screwed. All that you need to do to feel comfortable here is the belief that you can forge your destiny, whether that’s as a successful trader who’s not a coinflipper, or as a person who cashed out early for their next venture, or as a person who didn’t quite have it work out this first time but is willing to hit the ground running on the next opportunity.

If you don’t believe in yourself like that, then you’re probably not ready yet. But it’s okay (and probably indicative of trading success rather than getting too emotionally excited about it) to at least be having second thoughts before you pull the trigger.

 

I actually had a friend who was apparently fired for not taking the board games/card games portion of the training seriously enough. I would get pissed at him in games at college because he was not very competitive, and he said it was supposed to just be for fun anyway. Well, fast forward and he still figured a naturally competitive, strategic mindset did not have much to do with actual trading... too bad for him that his superiors figured it did.

Other friends similarly just didn’t have the “oomph” to succeed. You’ll know them when you see them: the kind of guys who looked good on paper but just weren’t determined to truly succeed, and you almost feel took a spot from someone else who would have done better.

Note that I’m not saying anything about a magical trading touch here. I’ve read and heard about it on these forums, and seen it somewhat in action, but almost never have I seen someone who was driven to succeed who was quantitatively skilled who couldn’t at least perform in line with expectations.

So just be a hustler and don’t screw it up.

 

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just google it...you're welcome

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