| Topic Name: |
Best Prop trading desks |
| Message Name: |
Re: Trading |
| Date Posted: |
02/28/2000 |
| In Reply To: |
I don't know what world did this "trader" punk came from.
There is a basic difference b/w mkt making and prop trading. You want to be flat on the former at the end of the day. As a mkt maker, you should have no major views of the market. Of course you will be a seller or buyer depending on your position but your purpose is to make money of the bid ask spread. A prop trader makes money by taking positions whihc vary in length and size. I think anybody you ask will tell you that a good prop trader is found in 10 market makers. In the REAL world, traders have position and risk limits. You can blow these limits, once or maybe twice, but then they'll be on your back for a long time. A 24 year old trading futures (likely spooze) with out limits is really rare.
Now regarding your question, it varies by firm structure. However, a market maker and a prop trader will likely seat close to each other. Typically they would report to different MDs (one for mkt making and one for risk taking) but generally all within the same group. Revenues from trading are volatile but they are also hughe. Obviouslt banks have learned to manage risk better unfortunately after russia blew up and asia got sick. But they are not going anywhere!
A good trader is not paid by a company- he pays himself. That is, a good trader makes good dough for himself cause he makes even more dough for the firm. If trading is what you like, then go ahead. However, finding a prop traidng position out of college is unheard of (were are not talking day trading equity bullshit). You may need to start as a mkt maker or a junior trader with little resposabilities. Once you learn the ropes, hopefully you'll get a book. Most, but not all exceptional traders are found in hedge funds where the $$$ is nicer and there is more flexibility on positions. |
| Message: |
JJJ,
Thanks for the info. on proprietary trading.
Could you tell me how the whole sales and trading process works. I know inst. salesman sell and traders trade, but what is the actual process. For example, let's assume an inst. salesman talks up some stock to one of his clients. Later in the day, the client decides he wants to buy a block of the stock. Does the buy side trader then call the sales trader or does the fund manager/analyst call the inst. salesman who then calls the sales trader? What's the actual sequence of events in an equity sale and trade?
I assume also because buy side firms spread their trades around that an inst. salesman may give one of his clients a good stock idea but that the client will then buy from another firm.
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