I’ve seen those jobs for prop trading where you have to put up your own capital to get started. If someone is really good at trading, could you make a comfortable living? 1. What is the average payouts? How often do you get paid? 2. If I wanted to bring in $50,000/year before taxes, how much captial would I have to be trading and at what returns? 3. Do I have to have a mimum number of trades? (let’s say I buy and hold a large number of great stocks and never do another trade for a year, but those stocks just return a ridiculous amount.) 4. Am I paid on realized gains or unrealized? 5. Also, are my losses tax exempt?
Use the search function on here (Chimeria Trading). I’ve seen this discussed. My own opinion is do not go to a place where you own capital is at risk. There are many places where you do not have to put up capital.
Homie, I’d stay away from those companies that ask you to put up some of your own capital. Personally, I think that stinks. The best prop firms will offer you a nice base, discretionary annual bonus based mostly on your performance and the firm’s, full benefits, casual dress, etc. etc. 2) 50k should be covered in your base salary. If you want a 50k bonus, well it depends. Every firm has a different payout structure. It won’t be hard to get a 50k bonus. You should aim a lot higher than that. Most people at my firm are getting a bonus well north of 6 figures. 3) Most firms will have a target number of trades they want you to do. Just sitting on your trades and not doing anymore, well that’s not good and its not smart. You should always be looking to make new trades and risk manage the ones you already executed.
Many of the wealthiest people in finance trade prop. >if someone is really good at trading, could you make > a comfortable living? >
TeamHydro Wrote: ------------------------------------------------------- > Homie, I’d stay away from those companies that ask > you to put up some of your own capital. > Personally, I think that stinks. > > The best prop firms will offer you a nice base, > discretionary annual bonus based mostly on your > performance and the firm’s, full benefits, casual > dress, etc. etc. > > 2) 50k should be covered in your base salary. If > you want a 50k bonus, well it depends. Every firm > has a different payout structure. > > It won’t be hard to get a 50k bonus. You should > aim a lot higher than that. Most people at my > firm are getting a bonus well north of 6 figures. > > 3) Most firms will have a target number of trades > they want you to do. Just sitting on your trades > and not doing anymore, well that’s not good and > its not smart. You should always be looking to > make new trades and risk manage the ones you > already executed. Hydro - know any legit prop firms on the west coast?
Hydro, at your firm, are you allowed to trade with whatver broker you want to trade with? Are you guys on an instinet type of electronic trading program?
I was a prop trader with a self-clearing broker/dealer for a little over a year. At this firm, each trader’s compensation varied based on what was negotiated at the point of hire. For me, I had a capital contribution of $5k and was initially charged commissions of $0.012 per share (i.e. buy 1,000 shares cost $12). As the daily trading volume increases, this commission fee decreases. At the end of my time there, I was paying $0.008 per share. This also took care of all software/computer costs, as well as a seat/desk in their office. I never had a percentage of my net earnings withheld by the firm, although I did know quite a few people who did. But the worst I ever heard was 85% trader/15% firm. Again, this is often negotiated prior to starting. Overall, it was a good experience. The quality of life is excellent: in around 8:30 am, out at 4:01 pm. And the money can be quite good. I can recall several days when my net P&L was over $1,000 (all mine since I had 100% profits). But these days are frequently overshadowed by a day (or series of days) of losses. And since you get the net gains, you also incur the net losses. I knew several people making over six figures (and everybody knows b/c it is on your screen), but for everyone one of them, I knew 5 or more who were struggling to breakeven in their account. Generally speaking, it takes 3 to 6 months to become net positive in your account. With little guidance, most prop traders at these types of firms will incur losses while they try to figure out the game. In my case, since all losses were incurred by me (the firm would have to cover anything over and beyond my $5k – although this would never happen as they would shut down my account well before reaching that point), I went nearly three months without being able to make a check request. It can get very discouraging, especially when you see others doing well. In the end, I decided it wasn’t for me. The money was very inconsistent and the risk required to make “serious” money was too much for me (and my mortgage) to bear. So I went back to the nice, safe salary + bonus structure.
BosyBillups Wrote: ------------------------------------------------------- > TeamHydro Wrote: > -------------------------------------------------- > ----- > > Homie, I’d stay away from those companies that > ask > > you to put up some of your own capital. > > Personally, I think that stinks. > > > > The best prop firms will offer you a nice base, > > discretionary annual bonus based mostly on your > > performance and the firm’s, full benefits, > casual > > dress, etc. etc. > > > > 2) 50k should be covered in your base salary. > If > > you want a 50k bonus, well it depends. Every > firm > > has a different payout structure. > > > > It won’t be hard to get a 50k bonus. You > should > > aim a lot higher than that. Most people at my > > firm are getting a bonus well north of 6 > figures. > > > > 3) Most firms will have a target number of > trades > > they want you to do. Just sitting on your > trades > > and not doing anymore, well that’s not good and > > its not smart. You should always be looking to > > make new trades and risk manage the ones you > > already executed. > > Hydro - know any legit prop firms on the west > coast? Unfortunately I don’t. Chicago and New York are really where its at for prop trading. But did you go to a school on the west coast? If you did, you could check with them and ask if any trading firms are recruiting their students? The most reputable ones will recruit college grads and pay the base salary and bonus, etc. I can’t imagine any recent college grad would agree to work for free and contribute capital (which is very shady).
homie Wrote: ------------------------------------------------------- > Hydro, at your firm, are you allowed to trade with > whatver broker you want to trade with? > > > Are you guys on an instinet type of electronic > trading program? We trade through Goldman. Its really not that big of a deal as far as fees. I barely even notice the fees that come out of my account. But I do trade with a large capital base so if you were on a smaller limit, it may be more important for you. And yes, basically we have our own trading technology and we can trade right off that. Its electronic and the orders are automatically routed through Goldman and processed.
Are there any prop firms that don’t speciify who you have to trade with? Relationships are much better when you decide to trade with a certain broker rather than having to trade with them no matter what.
Is your GS rep’s initials RW by any chance? When I was working in a similar role, we could trade with whoever we wanted, but our clearing/electronic execution went through GS too…
ahahah Wrote: ------------------------------------------------------- > Is your GS rep’s initials RW by any chance? When > I was working in a similar role, we could trade > with whoever we wanted, but our > clearing/electronic execution went through GS > too… Ohhh, now I know what you’re talking about. Yes, you can trade through whoever you want (broker specific), but each broker will have their own charges for you. But traders only go through specific brokers in rare cases (extremely large orders for example). Normally we just execute the trade through our technology and its autmoatically sent to our default broker/execution firm (Goldman). And then you get charged the standard fees. I don’t even know my rep from GS. Our execution desk deals with them, not the traders.
homie Wrote: ------------------------------------------------------- > Are there any prop firms that don’t speciify who > you have to trade with? > > > Relationships are much better when you decide to > trade with a certain broker rather than having to > trade with them no matter what. yes homie, there are. Mine will let you trade with whomever you want. However, I just think its easier to use the default broker. Saves time and money!! I don’t really think the broker issue is a big deal. If you went in for an interview and asked about trading with whatever broker you wanted, they’d probably give you a funny look.
I’m just curious how this all works. I used to work on an institutional buy-side trading desk and we used to get dinners and gifts from brokers all the time. Mainly because they wanted us to trade with them. I realize the share size is not even close, but still, there must be some perks some brokers give to get some business.
BosyBillups Wrote: ------------------------------------------------------- > TeamHydro Wrote: > -------------------------------------------------- > ----- > > Homie, I’d stay away from those companies that > ask > > you to put up some of your own capital. > > Personally, I think that stinks. > > > > The best prop firms will offer you a nice base, > > discretionary annual bonus based mostly on your > > performance and the firm’s, full benefits, > casual > > dress, etc. etc. > > > > 2) 50k should be covered in your base salary. > If > > you want a 50k bonus, well it depends. Every > firm > > has a different payout structure. > > > > It won’t be hard to get a 50k bonus. You > should > > aim a lot higher than that. Most people at my > > firm are getting a bonus well north of 6 > figures. > > > > 3) Most firms will have a target number of > trades > > they want you to do. Just sitting on your > trades > > and not doing anymore, well that’s not good and > > its not smart. You should always be looking to > > make new trades and risk manage the ones you > > already executed. > > Hydro - know any legit prop firms on the west > coast? Not sure if the P-Coast (PSX or Pacific Stock Exchange) is still around following their merger with NYSE/Arca/whatever, but see if you can find a list of the option market making firms that were/are on that exchange. those are all legit firms (though the p-coast was a terrible exchange to be a market maker for a prop firm when i was in that business - probably still true…)
homie Wrote: ------------------------------------------------------- > I’m just curious how this all works. I used to > work on an institutional buy-side trading desk and > we used to get dinners and gifts from brokers all > the time. > > Mainly because they wanted us to trade with them. > I realize the share size is not even close, but > still, there must be some perks some brokers give > to get some business. Homie, sometimes our traders have a huge order that they want to put through. And then it is our execution desk’s job to find a broker who would be willing to trade with us that meets the trader’s requirement. And yes, all these brokers send us tons of gifts. But usually it isn’t the trader who decides what broker to trade with. Sometimes brokers will give us “shows” as well. So our traders see these on the electronic screen and they can choose to trade with that broker if they like the trade idea.
So how much capital is the most senior person trading? What is the average amount a senior person is managing at the average prop firm?
homie Wrote: ------------------------------------------------------- > So how much capital is the most senior person > trading? > > What is the average amount a senior person is > managing at the average prop firm? The most senior person at my firm… tens of millions. An average person at my firm… probably 2 to 5m.
TeamHydro Wrote: ------------------------------------------------------- > homie Wrote: > -------------------------------------------------- > ----- > > So how much capital is the most senior person > > trading? > > > > What is the average amount a senior person is > > managing at the average prop firm? > > The most senior person at my firm… tens of > millions. An average person at my firm… probably > 2 to 5m. But there is a trade off too. If you trade more capital, the % you take home is lower. There are two kinds of traders, one who likes to trade a smaller capital amount and earn a larger %. And another kind who wants a lot of money to trade lots of contracts in liquid names.