Education for a Proprietary Trader

Discussion in 'Professional Trading' started by Kravitz, Jan 6, 2006.

  1. Kravitz


    Hey folks,

    At the risk of sounding a bit naive, I'll give this a shot.....I was just wondering what the minimum educational requirements are for proprietary traders.

    A bit about me: I am in my early 20s and have been working for an investment firm for several years now (the position includes taking care of trades for the fund manager), a job that I got straight out of high school. I have completed the necessary courses that are required for traders (Canadian Securities Course and CPH) in Canada, and my primary interest outside of work is finance as well.

    I do not have a university degree though, so how big of a hurdle is that if I am interesting in landing a prop trader position?

    Many thanks for any help or feedback.

  2. Having been the manager of a prop desk and surveying thousands of resumes and conducting hundreds of interviews I'll give you my 2 cents. Take it for what it is worth.

    Higher education was not a priority in the hiring process, relevant experience was nice but not essential. However, a certain innate character and ability was. There was an amorphous quality to the people that I hired which is not easily defined. It was a certain personality type that one came to recognize after hiring 100 or so traders.

    The last thing I wanted to do was hire an individual who would end up having nightmares about their work and dread coming to the office. The biggest favor I ever did for many prospective employees was to say no.

    If I were to take what you have written as a simple letter of introduction I would have to say no. It simply doesn't pique my interest. It's not your credentials or experience. There is an element to your writing style that just doesn't do it for me. In addition, I want the individual who has a competitive balance in their life. I don't want the guy who's primary interest outside of work is finance as well, too one dimensional. Tell me you tame lions and tigers on weekends at the circus, or race stock cars at Daytona just for fun. In the very least we'll have something to chat about when the market gets slow and you have something to fall back upon the day I fire you.

    Don't discount where you are now. The grass is always greener on the other side of the fence. You have half the battle won, you're already in. Now find the avenue within to get to where you want to go. The only reason I got to where I am was by finding a mentor in the firm and following his advice. You may want to consider doing the same. The last thing you want to do is leave a firm only to find out that you were being groomed to run a fund.

    Like I said, just my 2 cents, take it for what it is worth and best of luck.
  3. Curious as to the set-up, why are there resumes and interviews? The prop shops I talk with, it is not a job application but me putting some capital down and getting huge leverage and working out the terms (fees, BP, etc..). I am a member of the firm (off-floor trader) and no salary. What is the set-up where a prop shop "hires" someone?
  4. You took the initiative to sign up and ask us about how or what it takes to be great prop trader.

    Thats good enough in my book. You have a bright prop trading career infront of you.

    Recommended reading: WINNING..
  5. exactly and recommended watching "Riding Giants"
  6. I believe he's talking about a 'true' prop shop where you are trading 100% of the firms capital (ala Swift). Although, yes, he could just throw down 5k and get the buying power to start at one of the firms you mentioned.
  7. Got ya ;)

  8. Kravitz


    Thanks for the feedback (although I am not sure what to make of the Winning/Riding Giants recommendations).

    TrendReaction - thanks for the great info, even if it is a bit discouraging. Unfortunately, it's not a matter of "the grass is always greener" for me; I've been working at my current place for several years, and while the first six months or so were exciting, my learning curve is pretty much over and I need to "grow". Work has become monotonous and routine, and the only thing that gets me off my bed in the morning is my alarm clock. I need growth and exciting change, otherwise I rot.

    There is also a more practical side to all this; my salary is pathetic and even worse, there is NO room for promotions of any kind, unless they really do make me a fund manager which won't happen because my boss, love him as I do, will be very unlikely to pass the reins on to me (unless I am properly accredited, e.g. MBA+CFA, etc.).

    I have other interests outside of work (just came back from a two-week trek in India), of course; I just happen to spend a lot of time on my weekends reading analyst reports, looking over my personal investment acct, etc. I am not a 9-5 clock-puncher, and do a lot of self-studying.

    Hope that gives more color.
  9. Kravitz,

    Don't be discouraged so quickly. Where a desire is strong enough, there will be an opportunity created.

    On a more immediate note, I don't disagree with TrendReaction's comments. I have come across a similar development as well while looking to hire the next trader. You would definitely feel better about that alarm clock getting you up if you had an entirely unrelated interest capturing your mind when not at work. When trading prop, your patience, confidence and persistence will be thoroughly tested. Having a distraction makes it many times easier to overcome this process.

    I would take steps to speak to your fund manager and see if he would be willing to invest in you. Since there is no room to grow, you can push for help getting a degree in a related field (there are many threads about what fields to study for trading here already). This is a tax deductible expense for him and a non-taxable (in most cases) gain for you in lieu of a bigger paycheck and more taxes. Go through the process creating options for yourself. It seems like you have not taken care of this side of your human capital yet. You can certainly make it without a college degree, but you still have to compete with more highly qualified candidates (notice I didn't say better candidates). See how he responds.

    The other thing that work for me when I was an employee was to take on more responsibilities than my current pay-grade or job description. Try to do more without getting more pay. Eventually, the pay will catch up and the knowledge you gain is priceless. This is another avenue to keep moving forward and to create opportunities for yourself. See where you can "help out" and always act from the point of view of the position that you want not the one you are in.

    Good luck.