Prop shop advice.

[ImJWish622]

I was recently given an offer to work next year for a prop shop in New York. It pays a salary for the first year and I do not have to put up capital. It seems like a decent deal to me. Is it?

I have a few questions if you don't mind. I tried searching the forums for answers, but did not find answers specific to my questions. I hope you can help:

1. Why does a prop.shop exist? If I do not put up capital, what is in it for the owners or the capital contributors? Why don't they just trade for themselves? I mean, if they're good enough to trade, why would they teach me how to trade... why don't they just trade the money themselves?

2. What do they have to gain by hiring me? I realize they make commission on trades I make, but are those commissions > than just trading their own money? I don't even put up capital.

3. Whats the advantage/disadvantage of trading for a prop shop like Trillium or Chimera instead of a prop desk of GS or Deutsche?

4. Most importantly, what am I going to learn? can I use these skills if I leave the firm? Should I work here or apply to standard consulting/banking routes?

Thank you, be gentle.

 

[Don Bright]

Hard to give a good answer without knowing the Firm, but assuming it's someone like First New York Securities...then count your blessings. Getting a salary and great training is something that you just don't see so much any more.

I say "go for it" - the only thing I would check on is if there is a "hold" on your share of profits (if any?).

Good luck with it!!

Don