Which prop trading/MM shops are worth turning down top BB trading offer for?

Quick question: Which prop trading / market making shops would be worth turning down top BB (JPM/GS) trading offer for? Not going to be more specific, but given my educational background, I think I would fit in better at prop trading/ market making shop... (obviously a much higher barrier to entry, but I still want to aspire to something better)

Current list (in no particular order): Jane Street, Five Rings Capital, Citadel (Securities), DRW, Optiver, SIG, HRT, Akuna(?)

Are there other firms (US or UK based) that fall into this list whereby it would be silly for me/anyone to accept a BB offer over them?

I realize that I have listed some firms which are notoriously difficult to get into, but I don't see any point in applying to firms with a lower salary than what BB is offering, so that only leaves some of the stronger firms.

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Comments (14)

Sep 16, 2021 - 3:10pm

Thanks for the response! How do compensations compare between top BB and prop shop. As far as I understand (from bits of reading here and there):

- BB: starts lower, grows slower, but MD/partner levels can reach higher (is that true)

- Prop/MM: starts higher but caps out at a lower level

Not too much information on prop/MM comp progression that I can find.

Sep 18, 2021 - 6:03pm

Definitely not true… not sure where you got the idea that proprietary trading - the career path in which you individually are taking on massive risk - would have a cap to your earnings. At Optiver it's very transparent with their marble structure and last year a normal trader with 200 marbles would've taken in a 1.2m bonus. Obviously those years are anomalies but if anything BB S&T is trading some of potential profits and huge discretionary bonuses for job security, networking/name recognition, and a less stressful environment. Theyre different career paths. Usually people want to go from S&T to prop, or stay in S&T. I very rarely see anyone start in prop and WANT to go to sell-side seats.

  • Intern in PropTrad
Sep 16, 2021 - 12:16pm

Pretty much most/all of the structured recruiting ones pay better. Akuna, 5rings, IMC, DRW, G-research/HRT (tbf not really MM, moreso HFT but big overlap in terms of applicants) etc. There's a fair few out there.

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Sep 16, 2021 - 3:12pm

Many thanks for the reply! I can definitely understand/read that the Citadels/JS/HRT/5Rings/Optiver (maybe?) types will definitely exceed BB. Would you put Akuna, DRW, IMC into that category as well? My impression is that they were good, but not the same level as the aforementioned ones. perhaps I was mistaken

  • Intern in PropTrad
Sep 17, 2021 - 1:08pm

Can confirm all of those places (including Akuna, DRW, and IMC) will pay their first years at least ~2x what a BB would. That said, they're culturally quite different and you probably have more job security/exit opps at a BB. Really depends what you're looking for.

  • Intern in S&T - FI
Sep 16, 2021 - 9:20pm

Akuna DRW IMC pay you much better than BBs, even Flow Traders also pays you more than BB. Not sure about how much Virtu pays, but I'm confident Virtu is at similar level with CitSec or Optiver considering their presence in the US equity markets. 

But that being said, I think there's no such thing as 'being silly for anyone to accept a BB offer over them'. It's really a matter of perspective, and what each person puts value on. Someone would not care about earning much money but about making relationships and learning the banking business in holistic view. 

For you, if you have offer from any of the firms mentioned, just go for it. I'm quite sure all of them will pay you much better than BB both in short term and long term. 

  • Quant in PropTrad
Sep 17, 2021 - 3:07pm

I'm not sure about pay for juniors but Virtu is a public company that releases total compensation and they are rather stingy especially in good years like 2020. I would agree that these firms are quite different than BB trading and would attract different types of candidates.

Most Helpful
Sep 17, 2021 - 10:35pm

If you have the opportunity do NOT go into trading at a bank (unless you really really like fixed income but then still try to do it prop or MM directly). I interned with the above shops my sophomore year and then tried a "top" bank my junior year: without bashing the quality of the business (I found quickly that the bank was an alpha source and they just scrape commissions) or the people too much, the traders simply told me "usually sophomores come intern here and go work for Citadel/etc junior year, why are you doing the reverse?" Juniors told me they were there because they couldn't break into that kinda quant trading. Even from a pay perspective you will always be paid 1/2-1/4 of what a Citadel/etc will pay you (this holds up less at the partner level but you can get there so much faster in prop). Progression in a bank is 40% performance and 60% politics whereas it would otherwise be 95/5.

Sep 17, 2021 - 11:14pm

What is the likelihood of being able to move from a bank to a MM/prop after starting? I have heard it gets harder post-graduation, but have seen people do it. 

Also, do you mind if I pm you?

Sep 17, 2021 - 11:45pm

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