MichaelJ - Could it be because the smaller prop trader spends most of the time 2nd guessing what the IB's are going to do, and the IB's KNOW what they are going to do?
Not sure about that. The market-makers at IBs know the future "sort of" due to order flow, and they may position around that to make money. But that is not pure prop trading - but likely could be more profitable over all since market makers are the casino. But the pure prop traders at IBs don't have crystal balls and need to have a view and position accordingly just as small props do, I think.
Our desk here.. we mostly do facilitations (i.e. taking the other side of the trade with our inventory) or customer crosses.... i'll explain more Monday if i have some time... if anyone in the thread is nyc, you're more than welcome to stop by our place up here in midtown... i'm itching to get off this damned floor, it's 5:24pm on a FRIDAY and the chicks in nyc are half nekkid on Madison!! Good posts in here by FredB.... have a good weekend all, c u Monday.
I am in midtown also and would like to stop by your office please. Does your desk mainly handle order flow?
The reason that nobody can put an exact finger on what proprietary groups within IBs do is because they are, well... proprietary. An example would be statistical arbitrage that was developed in-house at Morgan Stanley, which they used for many years and which eventually leaked out in due time (after they, I assume, made lots of money off of it). If you are looking for a precise answer as to the exact difference between a daytrader/prop trader at a firm like Schonfeld and an in-house Prop trader at a bulge bracket IB, you're not going to get one. It really comes down to scale - any idiot can scalp a stock with 100-200 shares, but how does one scale a short-term trading strategy up to the extent that it produces the types of profits to make it worthwhile to a huge bank like Goldman (after paying the trader a generous wage)? Anyone who knows how to use such scale (capital) to thier advantage is probably doing it themselves at those places. If you are asking this question to decide, which one you want to do... that's an easier question: Unless you know someone in prop trading at an IB, or if you are asian from an IVY with a math degree, you have no shot of getting one of those jobs. You'd be better served just buying your way in at a firm like Schonfeld and figuring out how you can make a living for yourself by pulling money out of the markets consistently. The third category is, of course, the sales trader at an IB, which is no more than a bookie and who often loses his ass when he tries his hand at prop trading because he lacks both internal discipline/emotional control and an understanding of directional price movements (yes, even though he is filling orders at, ideally, competitive prices).
first part sure, second - what are you talking about? Percentage wise how many top Asian traders/structurers do you have? would be almost non-existent if it wasnt for few Indian Super Star traders, but I dont think thats what you meant by "Asian"
FICC year after year, mostly former J. Aron group. No wonder Lloyd Blankfein is about to take the top post.