Would like some advice on proprietary trading firms.

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Quote from StuckeyBowler:

Call me lazy, but I don't want to work 90 hr weeks, get paid peanuts, and then let go after my 2 year tour of duty in favor of the next batch of college "fresh meat". Trust me, I'm smack in the middle of a social crowd that knows the ins and outs of the industry. It doesn't really work the way you simply mentioned. I just don't think it's for me, and I don't want to have to go to b-school for the sake of it.

Besides, my father was an independent trader during the 70's and most of the 80's. He is giving me the go ahead and full support.
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StuckeyBowler,

I still think you should go the normal path. It's SAFER and more REALISTIC. I went to a top school. Then worked on the Street. Then worked on buy side. Then a quant firm. And now doing prop trading. But before prop trading, I spent FIVE years in the institutional world.

Looking back on it, I think it was just pure resume building experience. Prop trading is TOTALLY different than institutional world. But the important thing now is that is gave me some credentials and a "fallback" plan. I still get regular calls from recruiters telling to come back to the Street and I'm going to interview with a hedge fund next week to see what they got. A lot of recruiters are really impressed with my resume, b/c I was willing to put the time and energy into my work experience.

Now, I LOVE prop trading because of the independence and trading using my own strategy. The ONLY time for me to come back to the institutional world is if I can trade my EXACT PROPRIETARY strategy. If I can't then I'll continue to trade prop and make a healthy living.

But if things ever get rough ( BELIEVE ME , TRADING CAN GET REALLY ROUGH!) then I can always go back. I have a network of people on both buy and sell side who would want my skillsets and appreciate the skills and knowledge I can bring to the table, because I've worked for them and done good work. And not only that my name is visible in the industry.

Had I just went straight to prop/daytrading right out of college and didn't succeed, I HIGHLY doubt anyone on the Street would be calling me now to ask me to come and work for them.

If you do quant/institutional world FIRST then you can ALWAYS do prop trading. If you do prop trading first and FAIL, then it's probably next to IMPOSSIBLE to go into the institutional world. People would be asking,"So, you have been scalping nickels for the last 5yrs and didn't make it as a daytrader? How is that strategy going to help us run $100M to $500M fund or proprietary $850M convertible arb book?"

I'm not looking down on daytrading. I'm a pure daytrader now. And I'm making good living and lovin' it because I finally crystallized my strategy and refined my trading psychology. But last year was hell in prop land. But I just want to have the knowledge that suppose that I didn't make it then there are places and people who want to employ me for a decent sum of $ to do their kind of work.

think about it before turning down the institutional offer...

good luck!

I love the ZN bond futures!!

99
 
Quote from StuckeyBowler:

Thanks. I've turned down quant college grad jobs at major brokerage houses to pursue proprietary trading. I hope I'm not making a big mistake.
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dont worry your not... Imagine having a job that is better than being a professional baseball player. Ultimately doing it on your own is a pretty damn exciting idea. Imagine playing ball with your kids when you take a break. Your buddies playing it safe with goldmine etc. will envy you
 
Quote from StuckeyBowler:

Call me lazy, but I don't want to work 90 hr weeks, get paid peanuts, and then let go after my 2 year tour of duty in favor of the next batch of college "fresh meat". Trust me, I'm smack in the middle of a social crowd that knows the ins and outs of the industry. It doesn't really work the way you simply mentioned. I just don't think it's for me, and I don't want to have to go to b-school for the sake of it.

Besides, my father was an independent trader during the 70's and most of the 80's. He is giving me the go ahead and full support.
More...

The peanuts you'll get paid will most surely be more than you'll earn while paying your dues at a proprietary firm. Besides if you're any good you could be walking away with million plus bonuses within a number of years. Worst case you are let go after your 2 year tour and end up walking away with the experience of how the institutional size works along with a few valuable contacts in the industry.

Your social crowd knows the ins and outs of the industry but they probably are a year or two out of school. If you're able to look beyond a few years you might be able to see the bigger picture.
 
Quote from StuckeyBowler:


My impression is that Assent is a conglomeration of "franchised" trading operations run by individual capital investors using the "Assent" name. Am I correct? The branch I went to looked very professional, and the guys I spoke to all seemed very enthusiastic about me possibly getting hired. However, I was somewhat set back by the amount of non-professional retail traders they had in the office. I am wondering how fertile the environment would be for learning.
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This is an excellent point that should be made clear to newbies looking for info on different firms. Whether it be Generic, Assent, Worldco or whatever, every individual office is unique. A company's office in one city may be great but terrible in another. Furthermore, firms have multiple locations in certain cities such as NYC that can vary in quality tremendously also. Each branch should be investigated individually.
 
Quote from alterego:



The peanuts you'll get paid will most surely be more than you'll earn while paying your dues at a proprietary firm. Besides if you're any good you could be walking away with million plus bonuses within a number of years. Worst case you are let go after your 2 year tour and end up walking away with the experience of how the institutional size works along with a few valuable contacts in the industry.

Your social crowd knows the ins and outs of the industry but they probably are a year or two out of school. If you're able to look beyond a few years you might be able to see the bigger picture.
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The pay is kinda peanuts in the beginning. It isn't all that in the beginning in the institutional world.

Here are 1st yr salary figures, not including health benefits,etc.:

1) BS/BA : $45K-50K base +bonus probably runs to 75K-80K max

2) MBA - $75K-$80K base+bonus totalling aroung $130K


3) Phds: 85K-120K base + bonuses.

And it only gets better each year if you do good work.

By the 5th year in the institutional world, you should be making around 200K+ or more. Then it TAPERS off unless you are in management or running some serious strategy. That's why people LEAVE the i-bank if they don't get promoted to MD(managing director). I was at VP level before I left. Some of the people who do make it to MD leave anyways so they can go to the buyside especially hedge funds and do the ENTREPRENEURIAL thing and rake in the 7-8figures.

Sometimes, I regret I left the gravy train too early. But I'm glad I tried prop trading out for the last 1.5yrs. Now, I REALLY KNOW what MARKETS are all about! A lot of psychology. It's not just all math. LOL!

But maybe I wouldn't have to regret too much. I'm speaking to an hedge fund manager next week. He followed the similar path to me. He work at CS First Boston, BNP/Paribas, etc. prop trader. And now running his own $450M hedge fund. And he liked my experience since it paralleled his. But I would only take it if it gives me the same upside potential and an opportunity to run my strategy since I've been doing well at it.


good luck with whatever choices you make. but don't be so SHORT TERM focus. THINK LONG TERM! Yeah, it might be fun to trade now when you are young. But you gotta think LONG TERM CAREER! If you fail(which is a distinct possiblity given the high failure rates in daytrading!), then what??!

Or if you succeed only MODESTLY then what? There's no point beating your head against a monitor all day and make only $50K/yr which is LESS than a 1st yr bs graduate get at an ibank! WTF?! Last year, I was THIS CLOSE to quitting prop trading b/c I was making less than $100K. It was NOT worth my time since there's an "opportunity cost" for not working in my old job. But this year, I've improved so I said, I'll stick around. And if this continues or getter better NEXT year, then I might say I'm making more than my old institutional job. Then I would say prop trading was the right choice.

Until then, I'll always have this lingering feeling if I shouldn't take the next offer a recruiter throws at me....


99
 
working at a prop house will be a blemish on your career. it's the kind of mistake that's easily avoidable. you'll be hard pressed to find anyone outside these boards who takes them seriously.

since you have an ivy degree, future employers/partners will wonder why you didn't get a more serious job after graduation.

if you don't like BB then find a smaller firm that's doing solid work.
 
You would kinda stupid not to take a 45-50K STARTING pay.

Do you how many people (Ivy-leaguer) would drool over that proposition (as of this moment)?

You're 22 for pete sake. Take it sloooowww.

Not trying to be harsh, just hoping to instill some reality.
 
Stuckey,

I have a couple of questions for you. Have you ever traded in the past? Are you just looking to persue a career in trading? If you haven't ever traded, why do u want to get into trading, especially through a prop firm?

I'm in a similar situation as you are now. Except that I did not graduate from an ivy league school. Very far from it. Nor do I have those opportunites with those investment banks. I personally love trading, but if I were in your shoes, I would go work for those IBs. You'll gain steady income, solid experience, and not to mention how many doors it'll open for you in the future. If you want, working at an IB could lead to a career in trading for some large ass firm. Making millions trading other peoples money, rather than trading your small ass account from nothing on up. Not saying that you might not become mad rich from trading at a prop firm, but the odds are highly against you.

I am about to join a prop firm within this month. Taking the Series 7 next week. Why am I going prop? Cuz I couldn't get any decent jobs that I was interested in. Nothing that was gonna take me where I wanted to be in 5 years. I think I have what it takes to make it in trading, so I am going for it. Even I do fail, atleast it'll open up more doors than if I was stuck at some accounting department crunching numbers.

Anyways, enough of my rambling. Good luck with whatever choice you make.

xbrxx
 
Try ETG. They have a training program for neophytes. It worked for me. Although I am no longer associated with the firm, they treated me right. Only downside is the 2 year contract, but I thought it was worth the training. Some don't like contracts.
 
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