How do I get a job at proprietary trading firm?

Discussion in 'Prop Firms' started by curiousv, Dec 22, 2018.

  1. how about chess? Are chessplayers appreciated ad well?
    #51     Dec 23, 2018
  2. JSOP


    LOL Didn't even notice that. Should do that so when we ever visit CME the building, we will see that bar and know it's you. Will even stop in for a drink. :)
    #52     Dec 23, 2018
  3. schweiz


    And you can clearly not read.
    • I never told "anyone should give multiple millions". I clearly said: "without individual risking more than just a 1 month income".
    • I also never spoke about billionaires. The only thing you are good in is "framing".
    #53     Dec 23, 2018
  4. JSOP


    Yes but for somebody who trades for themselves, the "assets" IS their income, their "take home pay". That's the beauty of trading for yourself, you get to keep 100% of the profit, the ENTIRE 30% ROI not just a portion of whatever you made handed down to you by whoever. :) And this is probably why ppl leave after spending 4-5 years in a prop trading firm after they've learned the "alpha".

    And btw, to solve for N, it's not "350/0.3 and solve for N", it's 1.3 ^ N = (350 / 100) and solve for N. Exponential takes precedence before brackets or multiplication in the order of operation, and the answer is 4.774xxxxxx years. Assuming some variance in the return %, the no. of years might be longer yes but the probability of it being 10 years is a bit small.

    Good talking to you @sle , always :) I still learn so much from you.
    Last edited: Dec 23, 2018
    #54     Dec 23, 2018
    schweiz likes this.
  5. sle


    Yes. Chess is very well respected.

    I am still confused why you think 350 in income is the same as 350 in assets. Trust me, it's much better to be getting a thousand dollars a day for 5 years vs just having 350k in the bank :D. Let's break it down:

    (a) A junior monkey at DRW takes home 350 which he can spend on hookers and blow.
    (b) A private trader wants to have the same life style as a junior monkey at DRW
    (c) Given a desired yearly income of 350 and an ROC of 30%, he needs over a million in assets since

    income = roc * capital

    (d) so as I have explained above, you need more assets and that's how you get to 10 years:

    income = roc * desired capital
    desired capital = current capital * (1 + roc)^years

    (e) solving for years gives us
    years = log [income / ( roc * current capital) ]/log[1 + roc]
    years = something like 9.5

    Now, variance compounding actually will be sub-additive, I think. Off the top of my head, Sharpe of 1 would more or less agree with deterministic answer while it would be something like 15 years if his Sharpe is 0.5 and 8 years if his Sharpe is 2.0 but I am not sure.

    You are very welcome :)

    People leave for a variety of reasons, but usually not because they have made so much money that they can trade for themselves and produce the same income. Most are asked to leave because their alpha has decayed. Then there are guys who find better gigs elsewhere. Finally, there are some people that burn out.
    Last edited: Dec 23, 2018
    #55     Dec 23, 2018
  6. sle


    Sorry, you were saying?
    #56     Dec 23, 2018
  7. Sounds like blood money. At this point in life I’d be happier driving Uber at 3.5 hours a day for 35k a year. Minimalism is the way to go :)
    #57     Dec 23, 2018
    comagnum likes this.
  8. JSOP


    That's because you said earlier

    And that's just how many years that the private trader would have to earn with complete reinvestment to reach the first $350K equivalent of the annual pay of the junior trader. For income, once he's reached the $350K, after that as long as the private trader continues to earn 30% return, he's all set his whole life to have $100K annually in perpetuity forever to spend on the hooker and blow. LOL

    X/0.3 = 350000, X = 350000 * 0.3 = $105,000 Not too bad for just a little over 4 years of work.

    Yes it's not as much as the junior trader but since he works for himself, his job is guaranteed as long as he's not mentally capacitated in any way(even if he's physically capacitated he would still be able to trade like Stephen Hawking just no hookers). Whereas the junior trader, since he works for others, his job is never guaranteed. If he ever loses his job because in prop trading firm,
    then he's screwed. He gets 0 income. No more hookers and blow :(. And since the junior trader has been spending all his $350K income on hookers each year, he has no savings. So once he's lost his job, he's instantly homeless and he won't even have a roof over his head let alone the capital to trade for himself to become a private trader even if he wants to.

    Sooner or later, everybody becomes a private trader. :)
    Last edited: Dec 23, 2018
    #58     Dec 23, 2018
  9. I’m sorry, but that’s not how the ups and downs of trading work. You don’t just place bets into a random number generator, and plan a fixed 30% annual ROI.
    #59     Dec 23, 2018
  10. JSOP


    That's the ROI that @sle gave me in his example. His example, his ROI, not mine.

    Last edited: Dec 23, 2018
    #60     Dec 23, 2018