transitioning into an institutional career from prop

[Maverick74]

Quote from mdl060374:



Why is this? Is it toxic

a) If you don't have an other trading experience for an IB or related firm?

b)Is it toxic regardless of circumstances: ie layoffs, bad job market, etc..

In my case, I got laid off from an IB when our branch basically shut down its NASDAQ MM branch. I did prop b/c after waiting for 5 months, there was nothing else out there, and I wanted to at least try to make $$$, and at least "stay in the market" as opposed to sitting on my ass...

I cant see how that is a bad thing, under the circumstances. Or does HR or recruiters just not care about the excuses?

There are many reasons why prop trading kills your resume. One, is generally once guys work in a prop trading environment, they have a very very tough time going back to a structured job and following the status quo and employers know that. The second thing is, and you may argue against this but, it's the easy way out. Most prop firms will take anybody off the street with a pulse if you are willing to put up 5k or 10k. The hard thing to do is pound the pavement, going to interviews, dealing with the rejection, or even taking a lesser paying job. So many HR dept's look at you as selling out for the easy path.

I have never known prop trading to be an asset on anyone's resume. I'm not saying it's definitely the kiss of death, but if you go into prop trading, be prepared to stay on the self employed glidepath the rest of your life.

 

[misctrader]

Boss_hog and everyone,


I think it depends how you view your grand mission in life I think. Hedge funds are great on resume and potentially greater payoff. BUT only if you work for a relatively large fund with at least $100M. Otherwise the math doesn't work out.

From my understanding, HFs usually charge 1% plus 20% of upside. 1% of $100M is $1M in fees. That's usually barely enough to pay staff and operations. For microfunds under $100M, life isn't so peachy.

If you are running a small strategy that requires $1m-$5M of capital, then it's probably better to go prop because of higher payout. Let's say you generate $200K on the $1M then it's all yours to keep. But if you generate $200K in an institutional world it's not all that. So, a microfund and prop shop are actually in similar situations.

The other alternative is to go the standard path. Work at an investment bank or a buyside institution starting from analyst, associate, vp, sr vp, and MD(managing director) if you make it...

But this is NOT necessarily an endorsement of prop shops since most people don't make $ daytrading. They trade too often. Their transaction cost is too high for opportunities. Some days or time period are not good for trading. Not everyday one should pound it out.

 

[marketsurfer]

Quote from misctrader:

Boss_hog and everyone,


I think it depends how you view your grand mission in life I think. Hedge funds are great on resume and potentially greater payoff. BUT only if you work for a relatively large fund with at least $100M. Otherwise the math doesn't work out.

From my understanding, HFs usually charge 1% plus 20% of upside. 1% of $100M is $1M in fees. That's usually barely enough to pay staff and operations. For microfunds under $100M, life isn't so peachy.

If you are running a small strategy that requires $1m-$5M of capital, then it's probably better to go prop because of higher payout. Let's say you generate $200K on the $1M then it's all yours to keep. But if you generate $200K in an institutional world it's not all that. So, a microfund and prop shop are actually in similar situations.

The other alternative is to go the standard path. Work at an investment bank or a buyside institution starting from analyst, associate, vp, sr vp, and MD(managing director) if you make it...

But this is NOT necessarily an endorsement of prop shops since most people don't make $ daytrading. They trade too often. Their transaction cost is too high for opportunities. Some days or time period are not good for trading. Not everyday one should pound it out.

very well said. as someone with experience in a small fund, i concur with your views 100 %

 

[javs5150]

Are there any institutional trading jobs available any more?

 

[omcate]

Quote from javs5150:

Are there any institutional trading jobs available any more?

Yes. There are. But you need to have good connections.................

 

[a5519]

What's the real value of CFA-degree:

1) For CV, in getting a job
2) For trading independently

Is the value worth of the 3 year effort ?
How it compares to MBA ?

 

[BlueHorseshoe]

Quote from a5519:

What's the real value of CFA-degree:

1) For CV, in getting a job
2) For trading independently

Is the value worth of the 3 year effort ?
How it compares to MBA ?

Just finished my CFA this year. Not embarassed to admit it took me SIX years. Average time to completion is about 4.5 years. You'll finish in 3 if your lucky, quit midway if you're not.

CFA is all about fundamental analysis, portfolio analysis, and heavy on ethics and regulation.

CFA is a huge boost if you are looking for a real job in finance - particularly in traditional portfolio management. Probably not worth the time if you are only going to trade independently.

 

[mdl060374]

Quote from Maverick74:



There are many reasons why prop trading kills your resume. One, is generally once guys work in a prop trading environment, they have a very very tough time going back to a structured job and following the status quo and employers know that. The second thing is, and you may argue against this but, it's the easy way out. Most prop firms will take anybody off the street with a pulse if you are willing to put up 5k or 10k. The hard thing to do is pound the pavement, going to interviews, dealing with the rejection, or even taking a lesser paying job. So many HR dept's look at you as selling out for the easy path.

I have never known prop trading to be an asset on anyone's resume. I'm not saying it's definitely the kiss of death, but if you go into prop trading, be prepared to stay on the self employed glidepath the rest of your life.

I can see your point, but with previous experience in the corporate environemtn for an IB, solid references, and an REASON (ie lay offs, bad job market, decimlaization, ECN's, etc) for you going prop, I cant see it hurting as much.

In my case,I HAVE BEEN pounding the pavement, and the rest of the things you mention, but to no avail. THERE ARE SO LIMITED JOBS out there, and so many desks have laid off/restuctured, unless you get on the buyside, are an Ivy league Quant, sales trader with a book of business, it aint happening...

Although I have my first interview for an IB next week. It has only taken me nearly a year to get one...

 

[mdl060374]

Quote from javs5150:

Are there any institutional trading jobs available any more?

unless you are an Ivy league grad and can get an interview the traditional way, or know someone that can get you past Human Resources, no...

The jobs are so scarce, marketmaking is dead with ECNs becoming popular and decimlization, even the NYSE is probably going to have to restructure in some way..

Go the route of salestrading or buyside.. Remember, there will always be BUYSIDE jobs, b/c someone has to make the decision what to invest in... That will never change..

 

[sammybea]

I've actually said this on another thread but you can forget about working for a hedge fund or a real trading company without an ivy league MBA degree.. like Harvard or Columbia. Those are the cold hard facts. I recently got my MBA from a state school, and i can't even get an interview for a top 3 bank (ie goldman) or any hedge fund that you may have read about.. (ie SAC)

Quote from BOSS_HOG:

I have been a prop trader for 3 years now and have been thinking about applying my knowledge/ skills towards an institutional career- getting involved with a successful hedge fund or asset management firm. I feel that I would benefit from a more focused and professional environment than is found at many typical prop shops and I would be excited at the prospect of working with a dedicated team. I have been successful in my trading and am very hard working and ambitious. I have my series 7,63 and 55 and am currently studying for the chartered market technician certification. I know that I would fit very well into one of these types of firms as an analyst or trader and need to know what is the best way to go about procuring one of these positions. It is very difficult to find even a list by locale of hedge funds/ asset management firms, if I did, I could begin to canvass the firms in my area- does anyone know of somewhere where I could find a list like this??
And if anyone with a hedge fund/ asset management background can give me some insight into what working at one of these firms is like in terms of culture, salary and advancement potential, I would appreciate it very much.

Good trading to all,
bosshog