Average Prop Trader Salary

[Directional]

A good trader in his first year with us who isnt worth a 50% bonus (of base) probably wont be retained...100% is common and much higher occurs regularly as we have a lot of talented people

but what would a good trader actually generate in terms of traded revenue (profits) for the firm?

In regards to takehome, you mention 50% of base, presumably a $50k bonus ontop of the $100k salary, but I would assume that this total is in fact a much smaller percentage of realized profits than would be taken from a typical prop trader relationship which would pay anything from 50>70%+ of profits, without the salary aspect.

While your model is certainly interesting, would not the very profitable traders be better off going prop, since they would ultimately be supporting a big overhead of trainee's at Tibra?

ie; a trader who realizes $500k in trading profits would takehome anything around $250-350k in your average prop firm, more on a better split.

This would suggest that the Tibra model would be obviously a great deal for a newbie requiring training, who would love a fat salary at the same time, but a bad deal for the traders who stand out from the crowd since they end up supporting the collective salary burden massively more than they would if they went prop.

 

[42* S]

Exary my friend

Seems to be aimed at the grad end of the market , or someone wantiong that salary to fall back on .

Good for a start up trader or graduate why you need a degree to be a trader I dont know ?:smart: ,

But for your already established trader with a half decent track record I can assure you prop is by far in a way the best path to follow.

 

[au959]

In Brief

- 50% of base is the bare minimum bonus for a 1st year trader, it is not common - and is, pretty much, failure territory
- none of our staff, including our graduates, consider 100k a 'fat salary'
- see if you can locate any trader (junior or senior) who has left our company voluntarily - there are only a couple, and pay level was not a factor...
- a typical prop trader doesnt have access to a multi-billion dollar trading facility, ultra low-latency automated trading systems, a huge R&D budget, world class strategy design and collaboration, cutting edge pricing and trading tools and access to almost any electronic market in the world
- we have about 125 people employed who are NOT traders...the overhead created by trading grads in training is minimal compared to this...
- the senior traders wont hang around if they can get a better deal elsewhere...whilst senior traders do support huge infrastructure overheads, salary overheads and technology spending, this allows them access to unparalleled technology, the capital and credit required to trade enormous volumes and therefore the ability to implement strategies out of reach to all but a very select group of firms/funds...so they are able to make much, much higher PLs than if they were on their own, and of course, they care about their net earnings, not the profit split, or who they are subsidising...
- trading solo at a prop shop may well be a good living, i dont doubt some people can do very well, but i think it would be a mistake to assume that our structure is only good for graduates...it would be a disaster for us to pour so much time and money into our grads and then have them leave to go to a prop shop when they get better (this has never happened)...
- if you think our company is good for graduates (who get in), it is even better for those who develop well (irrespective of how much experience they have)
- i havent stated the PLs that various traders make (and cant, really), nor the amount that gets paid out, but it is sufficient to say, that our average payout is the highest in our industry and means that (on average) the payout ratio competes well with any prop shop / arcade, but the amount a trader can make (for themselves and the firm) is much higher (because of our capital backing, credit lines, position and presence, access to deal flow and trading systems and technology)
- finally, you exploit the knowledge of 200 smart people, not just your own skills...the value of this collaboration is impossible to value, but a very significant advantage of our firm...it is the opposite of every man for himself

anyway, my main aim was to distinguish us from a prop shop / arcade style business, not to argue people are better off one way or the other...

although, of course i couldnt help making my case!

if you can prove to me you are the brightest and most hard working kind of person, i will happily demonstrate why you are better off with us, both initially and later on...

if you cant or wont, then i'll happily leave you to your own view

Cheers

AU959

 

[Directional]

thanks for the detailed response.

access to significant capital is obviously a huge plus for any pro trader. Your model sounds like a good one, quite different to the pure prop model - halfway between prop and investment bank, with some of the benefits of both.

 

[42* S]

You present a good argument , & I am sure that you do attract a large no of candidates .

All I was trying to elaborate on was that your model may , or may not suit a trader who is solely on a prop deal or who prefers that .

Speaking from experience size ( in respect to futures prop trading has never been an issue for me or others I know ) .

If you are half reasonable it will follow . The point I am trying to make is that for a new grad with no $$$ it is probably easier to go your way than Prop. I know many self backed traders who have been successfull and then migrated through to prop & onwards .

I don't know if youwill find that many if they are half decent go from prop to salary based . Unless of course the retainer is a fair degree larger than yours , and profit sharing to boost .

 

[42* S]

Ps if you are paying a 50K a month retainer & good split on profits send me a private msg ,

 

[Pirate12345]

Thanks Au959, very informative posts.

 

[naked shorts]

How senior are your "Senior traders"? Tibra is only new....I would rather go with Propex.

 

[Tobi99]

As Au959 mentioned before, the traders working in a trading firm(e.g. Tibra) will have plenty of supports and IT advantage. And the senior traders tend to stay and progress within the same company.
Then I have some questions about this. The reason they don't leave is that because of their trading method is mainly relying on the IT system and the company owned software/infrastructure? If they leave the firm, will they be able to trade like other people who trades in prop shop using a commercial available software and normal IT equipment?
I am sure they have excellent knowledge in trading and very clever kind of people. But, if they decided to semi-retire at 35 and live at an island, are they able to trade a retail account (e.g. CFD, Futures) with consistent profitable results?

 

[John_Galt]

Tobi99,

Au959 was saying in one of his post describing Tibra, that it is indeed their infrastructure and capital backing which allows their traders to take advantage of market opportunities out of reach to most.

Its a different type of trading. It wouldn't pay for them to have traders making short-term directional bets and speculating on futures, which is the avenue of prop shops. While you can always learn another style you won't just be able to jump over and change in an instant.

Anyway, if the type of trading Tibra does suits you, I'm sure you won't have to worry about semi-retiring or trading CFDs for that matter. The compensation, while not equal in net percentage terms to prop shops is probably higher in terms of net income earned (on average) - so you wouldn't be moving, unless it was to one of Tibra's competitors (but its been the other way I believe). But this is exactly what Au959 said.

all the best.