How do I get a job at proprietary trading firm?

[arturo100]

how about chess? Are chessplayers appreciated ad well?

 

[JSOP]

Lol CME overserver?! I like that! Should open a bar by the CME building and start really making money when the interview season starts back up!

LOL Didn't even notice that. Should do that so when we ever visit CME the building, we will see that bar and know it's you. Will even stop in for a drink.

 

[schweiz]

we all know that you are a master of your intraday strategy, you have infinite capacity with a Sharpe of 6 and you know hordes of billionaires. Most people, however, would not be able to raise a penny without a long track record (let's say 5 years). I also doubt anyone would give multiple millions to manage before the trader himself has at least a million of his own money under management.

And you can clearly not read.

• I never told "anyone should give multiple millions". I clearly said: "without individual risking more than just a 1 month income".
  
• I also never spoke about billionaires. The only thing you are good in is "framing".

 

[JSOP]

First of all, I rather clearly said "income", dude, not "assets". So the question is a number of years to start taking home per year as much as a DRW monkey his first year. In a world of perfect strategies and simple compounding, it would take about 10 years to start earning 350k (assuming full reinvestment of profits):

100 * (1 + 30%) ^ N = 350 / 0.3 and solve for N

Yes but for somebody who trades for themselves, the "assets" IS their income, their "take home pay". That's the beauty of trading for yourself, you get to keep 100% of the profit, the ENTIRE 30% ROI not just a portion of whatever you made handed down to you by whoever. And this is probably why ppl leave after spending 4-5 years in a prop trading firm after they've learned the "alpha".

And btw, to solve for N, it's not "350/0.3 and solve for N", it's 1.3 ^ N = (350 / 100) and solve for N. Exponential takes precedence before brackets or multiplication in the order of operation, and the answer is 4.774xxxxxx years. Assuming some variance in the return %, the no. of years might be longer yes but the probability of it being 10 years is a bit small.

Good talking to you @sle , always I still learn so much from you.

 

[sle]

how about chess? Are chessplayers appreciated ad well?

Yes. Chess is very well respected.

Yes but for somebody who trades for themselves, the "assets" IS their income, their "take home pay". That's the beauty of trading for yourself, you get to keep 100% of the profit, the ENTIRE 30% ROI not just a portion of whatever you made handed down to you by whoever.

I am still confused why you think 350 in income is the same as 350 in assets. Trust me, it's much better to be getting a thousand dollars a day for 5 years vs just having 350k in the bank . Let's break it down:

(a) A junior monkey at DRW takes home 350 which he can spend on hookers and blow.
(b) A private trader wants to have the same life style as a junior monkey at DRW
(c) Given a desired yearly income of 350 and an ROC of 30%, he needs over a million in assets since

income = roc * capital

(d) so as I have explained above, you need more assets and that's how you get to 10 years:

income = roc * desired capital
desired capital = current capital * (1 + roc)^years

(e) solving for years gives us
years = log [income / ( roc * current capital) ]/log[1 + roc]
years = something like 9.5

Now, variance compounding actually will be sub-additive, I think. Off the top of my head, Sharpe of 1 would more or less agree with deterministic answer while it would be something like 15 years if his Sharpe is 0.5 and 8 years if his Sharpe is 2.0 but I am not sure.

Good talking to you @sle , always I still learn so much from you.

You are very welcome

And this is probably why ppl leave after spending 4-5 years in a prop trading firm after they've learned the "alpha".

People leave for a variety of reasons, but usually not because they have made so much money that they can trade for themselves and produce the same income. Most are asked to leave because their alpha has decayed. Then there are guys who find better gigs elsewhere. Finally, there are some people that burn out.

 

[sle]

And you can clearly not read.

• I never told "anyone should give multiple millions". I clearly said: "without individual risking more than just a 1 month income".

I know from personal experience that with 30% a year you can get millions from private customers in a short time.

If you have 10 million AUM you take 20% on 3 million profit, so 600K (so above +-6 million AUM you beat the 350K salary). I know investment clubs of wealthy people that can put that amount on the table without individual risking more than just a 1 month income.

Sorry, you were saying?

 

[digitalnomad]

A junior monkey at DRW takes home 350 which he can spend on hookers and blow. Finally, there are some people that burn out.

Sounds like blood money. At this point in life I’d be happier driving Uber at 3.5 hours a day for 35k a year. Minimalism is the way to go

 

[JSOP]

I am still confused why you think 350 in income is the same as 350 in assets. Trust me, it's much better to be getting a thousand dollars a day for 5 years vs just having 350k in the bank .

That's because you said earlier

For simplicity, feel free to assume that you do not need to eat, never get sick and you can sleep in a cardboard box under the Brooklyn Bridge.

And that's just how many years that the private trader would have to earn with complete reinvestment to reach the first $350K equivalent of the annual pay of the junior trader. For income, once he's reached the $350K, after that as long as the private trader continues to earn 30% return, he's all set his whole life to have $100K annually in perpetuity forever to spend on the hooker and blow. LOL

X/0.3 = 350000, X = 350000 * 0.3 = $105,000 Not too bad for just a little over 4 years of work.

Yes it's not as much as the junior trader but since he works for himself, his job is guaranteed as long as he's not mentally capacitated in any way(even if he's physically capacitated he would still be able to trade like Stephen Hawking just no hookers). Whereas the junior trader, since he works for others, his job is never guaranteed. If he ever loses his job because in prop trading firm,

Most are asked to leave because their alpha has decayed.

then he's screwed. He gets 0 income. No more hookers and blow . And since the junior trader has been spending all his $350K income on hookers each year, he has no savings. So once he's lost his job, he's instantly homeless and he won't even have a roof over his head let alone the capital to trade for himself to become a private trader even if he wants to.

Sooner or later, everybody becomes a private trader.

 

[digitalnomad]

Once he's reached the $350K, after that as long as the private trader continues to earn 30% return, he's all set his whole life to have the $100K annual income in perpetuity to spend on the hooker and blow.

I’m sorry, but that’s not how the ups and downs of trading work. You don’t just place bets into a random number generator, and plan a fixed 30% annual ROI.

 

[JSOP]

I’m sorry, but that’s not how the ups and downs of trading work. You don’t just place bets into a random number generator, and plan a fixed 30% annual ROI.

That's the ROI that @sle gave me in his example. His example, his ROI, not mine.

Let's assume for a second that your personal trading is making 30% ROC and you are starting with 100k (very reasonable, if not too aggressive assumptions for most of the population).