Prop Shops That Pay You To Trade?

Maverick....i couldnt have set it any better

u da man

also...lot of people rag on stock guys here in ET..but judging from the trader PL thread...i dont see too many future PL's on there

and i also know TONS of guys that tried futures and have migrated back to stocks......its a perfect market.....and we try to capture in-efficiencies

anyways...good job maverick

d
 
Also...i dont work at Schoenfeld . but i know a couple guys there

and i know the 20% of GROSS sounds like a joke...but when u put no money up and have 4,000,000 bp at ur disposible and return 10% GROSS

its a lot more than 100% of 100k


d
 
Maverick, while I do agree with you on most of your points...i also think you are blindly unaware of the fact that there a good number of people that actually make a nice living trading futures...with that said, the number has been shrinking for the past 4 years & i believe it will continue to shrink. what you heard at the IIT lecture is quite accurate...as a result, the inefficiencies traders exploit today will become drum tight as the market continues to evolve in the electronic arena. to contrast, i also see the possibility that the eventual saturation of black box programs in the markets will create new inefficiencies/opportunities.

In any case, I do happen to know several people, including myself, that have been able to make a much better than average living trading futures. Products ranging from bunds to eminis to oil to t-bond & notes. in good prop rooms all around the city there are guys pulling out $1000/day+. and they're not taking 20%, its more along the lines of 40% to 50% to start. as you cross predefined net dollar levels your percentage increases. usually after $1M a trader gets 70%, 60% after 500k, or some derivation of that.

I also agree with the lecturer you talked about in that trading is becoming a system based task...but as long as there is a bid/offer there is an opportunity for any person with a plan to capitalize. i know that sounds cliche, but i believe it to be absolutely true.

to footnote, i did stop full-time futures trading about 1.5 years ago to finish my mba. about 2 or so yrs ago i came to the realization that i could not see myself trading electronically for another 15-20 years--> thats a long time to make money consistently, especially when the market keeps getting tighter. anyway, i moved to the management side of futures & still trade abit...a career choice...btw, i did begin trading in 1997, and was profitable each year until i stopped in late 2004.
 
Maverick74:
So true. I have seen this first hand. And even if you have the knowledge and experience, it will still be hard to get a quant/systems development job without an ivy league education or prior experience at a big hedge fund or institution (which you can't get without the ivy league eduation or prior experience at a big.....).

For many people, that means trading for yourself is the best and only option.
 
I should also add that hedge funds and institutions had a bad year last year. More money flowed out of hedge funds in Q4 than into them. And returns were lackluster. The same is true at the institutions, which are basically private hedge funds. Therefore, they aren't hiring as much as they used to.

But if you've got that Ivy League PhD in the right subject, you'll make big bucks.
 
Can you clarify some more when you mean discretionary traders have no edge? How do you arrive at that conclusion, even for the 2% of guys who you know that actually make money?

Quote from Maverick74:

I'm going to say something that might offend a lot of people on here. But to be honest with you, I really don't care. The fact of the matter is, I can count on one hand how many profitable futures traders I have heard of. Not guys that I know, but guys that I have heard of from other prop firms. While it may be true that only 10% of traders in general are able to eek out a living, I think that number drops to about 2% when we talk about pure outright futures traders.

Now having said that, why should a firm put up their risk capital to get behind a guy where there is a one out of fifty chance he will ever makes a dime? I certainly would not make that bet nor would anyone on this board. This is the problem we are faced with.

If you want a salary job as a trader, let me put you in a few directions. One is risk arbitrage with a major bank or hedge fund. Another is automated trading/writing algorithms, etc. for a major bank or hedge fund, the other is a sales trader on an OTC desk for a major bank.

I'm sorry to report this, but there simply is very little out there in the way of salary for discretionary, fly by the seat of your pants/cowboy, futures traders, and for good reason. You have no EDGE!

My best advice I can give is put a good resume together, start faxing it out to every firm you can think of, brush up on your statistics and probability skills, and hit the pavement.

I was fortunate enough to attend a lecture just last week at the downtown campus of IIT here in Chicago. They happen to have an outstanding trading curriculum there. The keynote speaker is one of the professors there who happens to be one of the brightest guys I have ever met, a former quant from Bell Labs.

He has traded OTC products for Morgan Stanley in NY, ran one of the largest bond options desk in London and currently has started his own firm. He gave a rundown of the current job market here in Chicago for traders. He said there was a plethora of opportunity out there for bright young guys that can write code and algorithms, and guys that can do advanced derivative pricing for large banks and hedge funds.

He has placed several of his students with many of these banks and firms. But outside that area, there is very very little available. Unfortunately, if you don't have these credentials, you are going to have to pay to play. You are going to have to take risks and make sacrifices. You are going to have to PROVE yourself with YOUR money. IF, and this is a huge IF, you somehow find a way to make a little bit of money, then, and only then, will a few doors SLOWLY start to open up for you in terms of getting backing of some sort.

Again, I know this is not what people want to hear on this thread, but it is very real. I cannot believe for the life of me how many guys on this web site come to me or others asking for money with their hands out with not a single shred of a track record or any evidence that there is a remote chance that they will ever make a dime.

I don't know who to blame for this, late night infomercials, Trader Monthly Magazine, or possibly all the misinformation on this site by guys who claim they make millions yet don't even have a real account opened. Either way, there are more professional athletes today then there are profitable independent traders.

Many of you would have better luck hitting the gym and trying out for the Chicago Bears practice squad. Flame me all you want, but if you don't believe me, I can give you names and phone numbers of all the shops here in town and you can see for yourself.
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very good post. but the pro-athletes metaphor may be pushing it a bit. yes there are more, but the demand and desire for one (pros) is quite a bit higher than that of trading as a living.


~RT

there are more brain surgens than astronauts.:cool:


Quote from Maverick74:

Either way, there are more professional athletes today then there are profitable independent traders.

Many of you would have better luck hitting the gym and trying out for the Chicago Bears practice squad. Flame me all you want, but if you don't believe me, I can give you names and phone numbers of all the shops here in town and you can see for yourself.
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"but when u put no money up and have 4,000,000 bp a"t ur disposible and return 10% GROSS"


BP means nothing espically when you can't deploy 4M

Any daytrading firm can give you millions,

Too bad there are very few equitys that can handle the size for you to make gains.
 
Quote from NazAttack:

Maverick, while I do agree with you on most of your points...i also think you are blindly unaware of the fact that there a good number of people that actually make a nice living trading futures...

Yes, they are part of the 2%. I know you might think that the 5 or 10 or even 20 guys you know are everyone in the world, but it only feels that way. I can tell you from the countless numbers of prop shops that have closed down in the last 2 years in Chicago with 50 to 100 traders per shop where none of those guys were making money. I'm also including all the IB guys as well, as long as they are trading full time.

In any case, I do happen to know several people, including myself, that have been able to make a much better than average living trading futures. Products ranging from bunds to eminis to oil to t-bond & notes. in good prop rooms all around the city there are guys pulling out $1000/day+. and they're not taking 20%, its more along the lines of 40% to 50% to start. as you cross predefined net dollar levels your percentage increases. usually after $1M a trader gets 70%, 60% after 500k, or some derivation of that.

Yeah, I know the deals. I run an office myself and I talk to guys at every shop. Again, you may know several people but there are thousands upon thousands in the Chicago area alone that trade futures. Two percent of that total could still be 40 to 60 good traders. It's still only 2%.


to footnote, i did stop full-time futures trading about 1.5 years ago to finish my mba. about 2 or so yrs ago i came to the realization that i could not see myself trading electronically for another 15-20 years--> thats a long time to make money consistently, especially when the market keeps getting tighter. anyway, i moved to the management side of futures & still trade abit...a career choice...btw, i did begin trading in 1997, and was profitable each year until i stopped in late 2004.

This is another key point. Being able to do this consistently for 10 or 20 years. I know a lot of guys that can do anything well for 2 to 5 years, its longevity that matters in this business. Where do you think GOOG's stock price would be if they said tomorrow they only seem themselves making money for another 3 to 5 years then thats it. I think it would be a $5 stock. Any guy can jump into a trend or a hot market and milk it for a year or two, I'm talking about traders that can trade for 10 to 40 years. Yes, they are out there.
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Quote from fatrat:

Can you clarify some more when you mean discretionary traders have no edge? How do you arrive at that conclusion, even for the 2% of guys who you know that actually make money?
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Edge. I usually put edge into three categories. One is capturing a spread such as a market maker on the floor for options. Where he can buy on the bid and sell on the ask and capture the difference. This is an edge because we can't do this and he can. Therefore he has an advantage over screen traders.

Second edge is technology. Being able to execute faster then everyone else. Or being able to do arbitrage baskets or complex orders using sophisticated algorithms. This is an edge because again, if everyone doesn't have the ability to do this, they are at a disadvantage to you.

Third edge is order flow info. Again, this applies to guys on the floor or guys working OTC desks where they can see large orders and see where the market is going. You don't have this edge and they do.

An edge is something that usually cannot be replicated by other traders, hence an advantage.

This is why I laugh when people refer to TA as an edge. Any moron with tradestation can optimize moving averages all day long and can come up with the pattern of the month that everyone seems to be keying off of. That is not edge if everyone can do it. Most futures traders don't have an edge. They are trading on feel and gut. There is nothing wrong with this, its just not an edge.
 
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