S&T at IB or Prop Shop?

[TheChainsaw]

Hi,

I am a current student who wishes to gain trading experience upon graduation. I have been researching positions at IB firms and prop shops. How do the roles at an IB firm and a prop shop such as Jane Street, Optiver, or DRW which does volatility trading compare?

Are the roles completely different? If you start in one can you swap across? Is one more highly desired?

I'd be happy to get advice from anyone who considered these career options or has experience in either field.

Many thanks,
TheChainsaw

 

[ProfessorK]

Generally Speaking Investment Banks are preferred over Prop Shops.

With that being said IB's are much harder to get into. You need to graduate near the top of your class with a degree in Finance, Economics, or Accounting. In addition IB's will not let you get started in your career straight away. Most likely you will end up being someone's assistant for a solid year before you begin to learn the actual strategies the company emplyors, and begin to touch the companies money. These companies however have very specific strategies and will teach you the right info to be profitable.

Prop Shops can be broken down into 2 types. which we will call true prop and retail prop.
True prop firms in many cases have somewhat high requirements to enter, and will pay a Salary, train you for an extended period of time, then let you have at it with the firm's own money. Firms Such as FNYS is a good example of this type of Prop Shop.

I would advise to stay far away from the second type retail prop shops. These shops pay no salary, and will actually require a capital contribution to get over the PDT rule. Essentially what these companies do is give you 10:1 margin, so your not actually trading the firms money, AND they will even charge you a monthly platform and desk fee. Geesh talk about a bad deal.

To answer your other question, yes you can move from prop to IB or IB to prop later on.
A successfull track record with a true prop firm can get you into an IB.

Hope this helps.