Prop Exit Opportunities
And now we arrive at the biggest downside of prop trading jobs: the exit opportunities are not so great.
The skills you develop in this industry are so specialized that you cannot use them in most other environments.
It’s not even that easy to move to a hedge fund or large bank because the styles of trading are so different; a long/short equity fund doesn’t care about trading every second to make a market in some obscure derivative.
You might be able to do it if you find a group with a similar trading style, but it’s still a challenge.
So, your main options are:
- Move into another group at the firm or join a different prop trading firm.
- Go to a “normal company” in some type of finance role or do prop trading at a commodities firm like Glencore or Vitol.
- Apply to business school and use the MBA to switch careers.
And if you get fired due to underperformance, it’s really difficult to win a trading job at a different firm.
That creates a lot of risk if you’re a new graduate who’s still considering different options and you’re not 100% set on trading.