Difference bet Prop firm, trading for bank/financial inst.

Discussion in 'Prop Firms' started by HFOA, Mar 26, 2006.

  1. HFOA

    HFOA

    I was curious what the difference between a prop shop and obtaining a job at say GS trading desk. I read about people wanting these cushy wallstreet trader jobs all the time but was wondering how that job would be different then putting up your own money at a prop shop and trading there. The way I see it, if you can make significant money in the market why work for anyone but yourself. What am I missing?? Thanks
     
  2. managing $100+ mil, and getting 10-15% tops
    managing $2 mil with very llimited overnights getting 90-100%
     
  3. If you can make siginificant money in the market why to consider to work for someone else at all? Including prop shop?
     
  4. leverage
    unless you have significant capital of your own.
     
  5. If one can make siginificant money in the stock market the leverage can be found in the futures. Leverage is not a problem.
    Even if one wants to use the prop shop leverage then it should be probably not more than 2 first years of his career before successful trader can build up his own capital, right? So it would not take long time for the top trader before he can start working solely for himself. So working for a prop firm would be just a blip on his resume.
     

  6. what is your target cap base? i think we differ significantly there.
     
  7. are institutional prop desks really as big as people allude to on this board. i can't imagine there are many people doing this. i'm talking about taking positions for the firm, not sales traders who generate and process big volume for clients.

    i'd be curious to know a number.
     
  8. i worked on GSCO FICC desk for a year, dealt with FX sales guys, but prop guys were on the same floor, one row over. this was still when they were private and L. Blankfein was "just" an MD. this is the most profitable group of guys at goldman years running, responsble for billions, meanwhile the whole prop trader group was no more than 20 guys.
     
  9. CTTrader

    CTTrader

    I believe Don Bright mentioned in one of the threads that a trader putting up $25K would be able to day trade $2 million.

    If this is correct then a captial base of $500k would allow a trader to day trade $2 million on his own. But a trader on his own keeps 100% so the correct capital base would be lower depending on the payout and comparative expenses.

    Of course the relative advantages would further depend on whether the prop firm leverage and payout increases with additional capital input and trading experience.

    Interesting topic. I would like to hear input from those knowledgeable on the subject.
     
  10. with 500k deposit, one should have access to at least $5M
     
    #10     Mar 26, 2006