Proprietary Trading at Investment Banks

Originally posted by Husky02
i have worked at some of the large investment banks, and at least from experience(commodities) traders are giving a certain sector or concept to trade. risk management is very large political issue at large firms and it is often frowned upon to deviate from what you should be trading out of your book.

as far as become a prop. trader at a Deutsche bank, there is a certain hierarchy of rising up the train...ta, marketer, trader. it also helps to go to an ivy league school or have a friend already at the desk. unfortunately, i don't have either under my resume and that is why i'm looking to go to a small prop firm and be a ta for a year or so and then get my own book. doesn't haven't the prestige of a large investment back, nor the monetary rewards, but i'm sick of the beauracy that one has to deal with at this firms.

anyway, i'm probably venting more than helping you, but keep me update to date on your findings. hopefully they will be more pleasant
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Husky, I found where I worked nobody did marketing as it kinda sell side they did trading assistant or junior trader whichever you prefer to call it, then became market makers then prop traders or were undergradutes with a single degree who were stars and became prop traders straight away but that is rare. My problem is I am 18 and I want to become a prop trader at a major I-Bank where they allow huge positions, I did an internship through July was very successful, they had not position available on prop desk though so took a gamble and left now have couple of offers at large I-Banks can't say all names obviously, have about 6 weeks to prove myself and get a full time offer and escape going to university, not easy but I'm prepared and oging to try my hardest, was just wandering DB's desk structure, I know at Citigroup and Goldman there ar some traders who have rediculous leeway on what they cna trade and they are trading government bonds, fx and some equities or commodities little vanilla options clever people who have a very fun job!

I totally agree with you about risk management it's a big obsessive thing now because of Barings, Sumitomo, Goldman 98, they were constantly asking for positions with prop traders and were so intent on stiking to limits.
 
Originally posted by London2002


Husky, I found where I worked nobody did marketing as it kinda sell side they did trading assistant or junior trader whichever you prefer to call it, then became market makers then prop traders or were undergradutes with a single degree who were stars and became prop traders straight away but that is rare. My problem is I am 18 and I want to become a prop trader at a major I-Bank where they allow huge positions, I did an internship through July was very successful, they had not position available on prop desk though so took a gamble and left now have couple of offers at large I-Banks can't say all names obviously, have about 6 weeks to prove myself and get a full time offer and escape going to university, not easy but I'm prepared and oging to try my hardest, was just wandering DB's desk structure, I know at Citigroup and Goldman there ar some traders who have rediculous leeway on what they cna trade and they are trading government bonds, fx and some equities or commodities little vanilla options clever people who have a very fun job!

I totally agree with you about risk management it's a big obsessive thing now because of Barings, Sumitomo, Goldman 98, they were constantly asking for positions with prop traders and were so intent on stiking to limits.
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If you really want to make it big in PROP TRADING, than IB is not the way to go. I had job offers at Deutsche bank for trading(sales and trading), i-baking for lehman brothers, and an offer at a prop firm. My friend works for trading at GS and he said IF you want to make the big bucks, than you have to RISK your neck out on the line. Big bulge banks do not give you that kind of risk opportunity to make it big, unless, you work up the same old political ladder. IF you truly want to be a prop trader, and make a lot of money for yoself, go to a prop firm. Good luck, and a degree from an ivy league school IS overrated. I know cause i got 2 and went to one, and still dont know what a run on sentence is.hehe. by the way, with the kind of drive i think you have, you will make it at whatever you do:D
jc
 
Originally posted by nwbprop


If you really want to make it big in prop trading, than IB is not the way to go. I had job offers at Deutsche bank for trading(sales and trading), i-baking for lehman brothers, and an offer at a prop firm. My friend works for trading at GS and he said IF you want to make the big bucks, than you have to RISK your neck out on the line. Big bulge banks do not give you that kind of risk opportunity to make it big, unless, you work up the same old political ladder. IF you truly want to be a prop trader, and make a lot of money for yoself, go to a prop firm. Good luck, and a degree from an ivy league school IS overrated. I know cause i went to one and still dont know what a run on sentence is.hehe. by the way, with the kind of drive i think you have, you will make it at whatever you do:D
jc
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Thank you very much for your supporting words, problme is all the prop firms are equity trading, equities have never interested me, my thing is spot foreign exchange and commodities(precious metals and agricultural commodities only). That is why I need to be at an Ibank there are some enormous position limits on prop desks at major prop houses like Goldman Deutshe and to an extent Morgan Stanley. I will see how my next internship goes hopefully get a full time offer and see what they say, I aim to be proprietary trading within a year and a half max, tall order but it's worth the hard work, we'll see how things go, I'll have a better idea when I start next week.
 
Originally posted by London2002


Trader99 I must tell you I think you are a littel misguided as to prop traders at I-Banks, I have interned in an Ibank already this summer for three weeks and got heavily involved, when you say 15-20 people prop trading throughout an organisation do you mean say Goldman worldwide!!!!!!!!!

Goldman Sachs take more profits from prop trading than the other IBanks they are huge in prop trading which is why they took a 1 billion dollar hit in 1998 Russian crisis and South East Asia. I can tell you at the trading floor I was on in London alnoe there were around 25 proprietary traders, trading the firms capital purely taking positions on market trends, short medium and long term, this was ona fixed incoem trading floor no equities so it is mroe so than you think but you are quite correct that most people are just market makers all their life, on a team of 40 there are maybe 5 prop traders, 25+ market makers rest admin junior traders etc. ALl depended on the desk though, like fx obviously had some prop traders, IRD had some prop traders, but corporate bonds didn't cus there is little money in them, govies had some prop traders. They were either superstar undergrads as I think you usa people call them people who have done one university degree or people who spent 10 years working their way up to prop trading from the 80's or early 90's.
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I think you misunderstood my comments. It's usually 15-20 prop traders PER asset class. So, for example , at Bear Stearns there are like 20 prop traders in equity. I don't know how many are in fixed income. So, for each asset class there aren't that many "true" prop traders. The vast majority of so-called traders on Wall St are really just market-makers - providing liquidity to institutional fund managers. Yes, GS has a decent prop trading dept. So, does Morgan Stanley.

Now, the other class of big risker takers are hedge funds, because they can bet rather large amount(if they desire to and have the capital base) and have as much leverage as their prime broker allows them to. So, a lot of prop traders become hedge fund managers later in their life if they are entrepeneurial and don't want to deal with the politics inside an i-bank.

there's more than one way to skin a cat. But the prop firms espoused on ET is actually a decent way to learn about risk, taking directional bet in the market, etc. Spending years at i-bank and just trading off of order flow is NOT what I would consider real trading. You learn more about to master the market and be a "market wizard" so to speak by doing real trading regardless of where you trade then just taking the opposite side of your customer orders..

good luck!

99
 
SOrry I thought when you said the whole organization you meant totally! I agree with you your figures sound right but at the end of the day no prop firm will say to you here is three billion dollar dealing limit, although you say most people are taking the other side of the trade as market makers, the prop traders are as they are called prop traders, they purely trade directions no the market and they can tak enormous positions, I have sat with them and seen it done some paper trading while I was there and got involved it's good stuff, luckily out of a month I only had to spend two days on the market making desk and was put on the prop desk.

I don't think you can say it isn't real trading, of ocurse it is, you are simply gambling on the price of a currency or bond, great fun! Prop firms trading equities are good and some of the guys are making a million a year but some prop traders at Ibanks make a hell of a lot more, you do have to be very good though, that is what I aim to be, my paper trading produced great results and I tried as much as I oculd to manage risk as I would with real money now I just need to get myself a prop position at a major Ibank full time.
 
Don't know who Segrue is, all I know is I was told that some useful information can be gleaned from this site and I wanted to know if anyone knew the structure of proprietary trading desks at Deutsche Bank.
 
Go to school. Its a stupid piece of paper but everyone needs it. If you ever want to switch firms, etc. most companies won't even look at you without a degree.
 
i agree you should go to school. why? Even though you might get in one firm, the problem is that a lot of managers are worried about covering their butts in case of another fiasco, like the last few years. If you have no degree, and another guy has a degree, but slightly less profitability, if the crap hits the fan, their butt is on the line for hiring a person without "real" education experience (meaning a piece of paper). Unfortunately, the amount of butt-kissing and politics at the big firms is pretty crazy. I just want to make money....is that so wrong?? :cool:

canuck
 
I wouldn't agree if I can get hired by a bulge bracket firm at 18 then there is no point in me getting a degree as at the end of the ay the bottom line is dollars, if you are making the money as a prop trader at a major bank it doesn't matter what education you have, there are guys there who entered at 16 and are proprietary traders, they move firm as they please because they make lot of money I met some during my internship.
 
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