Proprietary Trading Careers: Right for You?
Summing up everything, here’s how you can think about prop trading careers:
- Pay and advancement are almost completely meritocratic – if you make money for your firm, you will be rewarded and advance quickly.
- Recruiting is more accessible if you have good math/probability/coding skills and a technical degree – even if you’re not at a top school.
- The work can be quite interesting, especially if your role is more quantitative.
- The culture and lifestyle can be quite good since firms and teams are small, and there’s little bureaucracy or office politics.
- Exit opportunities are limited, so if you’re not 100% certain you want to be a trader, you should not join a prop trading firm right out of undergrad.
- It’s easy to get scammed by less-than-legitimate “prop trading firms” that pay you no base salary and ask you to pay for training or data access.
- If you do not perform well, it will be difficult to get another job in the industry, so you’ll most likely have to switch careers.
- You don’t “build” anything tangible. At least in industries like investment banking and private equity, you can point to Deal X or Company Y and explain how your work affected it. In prop trading, good luck explaining anything you do to normal people.
In short, prop trading is like an extreme version of sales & trading, so the points in the sales & trading vs. investment banking article apply even more readily.
It makes sense if you have an undying passion for the markets, you’re math/CS/tech-oriented, and you know that you want to trade for a long time.
If not, it makes more sense to start your career at a large bank for the branding, network, and better exit opportunities.
And whatever you do, please do not join the legion of 10-year-old Fortnite players attempting to be “prop traders” on Robinhood.