SAC has many departments.. it's a huge company. But there is obviously a "prop" division... more related to IB prop rather than what we commonly discuss in the Prop forum. Supposedly Cohen hires a bunch of proven traders with their own niche and they work there as long as they are profitable. They obviously get insane capital for their strategies. Though many are day trading, they are not just outright speculating on stocks to get 10 cents. They do more complex strategies that involve making markets, arbitrage, etc.
Never worked there... but I did work in Stamford for a year (SAC is headquartered in Stamford, though also has a office in NYC)... and our head trader told us all about Steve Cohen. A lot of guys believe that analysts give their reports to Cohen first... I don't know if that's true, but he is supposedly a great trader. I think he started by making markets in options and expanded. Cohen is also a modest guy for his income (over a billion in a year). He gets chauffered in a 7-series BMW and not some Rolls Royce or what not. From what I was told, he hires traders with audited results of profitability. Then he gives them a good chunk of capital and fires the ones that can no longer make money.
At least one group at SAC is set up for "up and comers" and appears to be more like prop trading, tho not like most on ET think of it. I know of one offer with a salary in the multiple six figures, over 100 million in buying power, and a generous payout of profits (tho i dont remember what it was exactly). The bad news is they find you (as opposed to taking resumes) and to get an offer like this, you've demonstrated that you know what ur doing at another good job (buyside or sellside), but do not have to have an "audited track record".
Wow... $100,000,000 in buying power... that must be for arbitrage traders. New trader or not, that BP is ridiculous. This type of prop is different from even the legitimate firms we talk about in the Prop Forum. Even in IBs, prop divisions sometimes just hold 15% in stocks and everything else bonds... just to outperform the market (when falling) relative to risk.
How much % pa would SAC expect their traders to make? I read the defunct trader monthly, a guy made 50 to 60%pa at FNYS were made partner. Is this the general requirement for this industry?
Probably just outperform the market relative to the amount of risk they take. That's why on a $100,000,000 account I can only see arbitrage strategies used. You can't just day trade a $50,000,000 account the same way you can a $5,000,000 one. Guys that trade with less than $1,000,000 can return 300%. So it has to do with total profit, rather than %. Consistent profitability is also better than speculating, taking great risks, and outperforming a more conservative guy.... the consistent trader will win in the long-run. Read fooled by randomness... traders sometimes don't understand the role of chance in a short-term time frame. (If you happen to be long more times than short in a bull market, does that make you a good trader? Is it skill or just probability?)
Where do you get these theories from? First of all SAC does not hand out $100mm accounts to just any Joe Trader with or without a track record, second of all one does not need to utilize arbitrage to trade $100mm. You really need to stop making this crap up because you like to use big words like Arbitrage and see yourself in print! I refrained from laughing at you when you thought you were hot shit as a moderator. I guess your little temper tantrum over Puretick, a sponsor, did not quite fly with the owner of this site, yet you still post your dribble here. How many years have you been doing this 1 1/2 or 2 yet?
StLouisTrader mentioned the 100 million accounts.... that sounds ridiculous to me, so the only rational reason was to do arbitrage style trading... because it takes a lot of capital to capture price inefficiencies when you are not leveraged. And yes, at IBs prop traders, some who I knew personally, would only try to outperform the market.... get a better % than the market and they would diversify. Stocks generally comprised 20% of a portfolio, depending on how aggressive it was. I said audited track record... (read the posts before posting.)