How much capital do you get?

sonyhdna

16y

for the millionth time of the forum. Traders at BB's trade client flow (buying and selling securities on a clients behalf).

a very, very small percentage of traders will trade the banks capital (prop trading. You can end up on a prop desk after proving yourself on a regular desk. occasionally they will hire an undergrad as a trading assistant, junior analyst, etc. the amount of capital varies greatly bank to bank, desk to desk.

m8875

16y

yes, i meant prop desk...

how about at regular desk, do the banks have a minimum for the client?

Jimbo

16y

what do you mean by a "minimum for the client"?

you'd be hard pressed to find a rate swap going through on less than $1mm notional. but that's got nothing to do with the amount of the credit exposure.

JJ1980

16y

on a prop desk the bank will allocate you certain amounts of dollars in VaR (Value at Risk). That totally depends on the product and the appetite risk of the bank/desk. They don't usually do it in terms of notional dollars.

Bank Reconciliation Template

UserAccountDeleted

16y

When you hear about traders making huge bonuses.. that's usually on the prop desk right? How much upside is there to client flow trading? How much room for profit is there between what sales quotes the client and what you can get done on the market?

Jimbo

16y

TooLeveraged:
When you hear about traders making huge bonuses.. that's usually on the prop desk right? How much upside is there to client flow trading? How much room for profit is there between what sales quotes the client and what you can get done on the market?

define "huge". bonuses on flow desks are plenty.

and it depends on the client, how competitive the trade is etc. there can be large margins, no doubt.

UserAccountDeleted

16y

By "huge" I mean the type you read about in the Journal or the guys on the front of Trader Mag.

ChimpTrader

16y

Yes, those guys are almost all prop.

Delta Defined

Jimbo

16y

so that'd usually be prop but if you can get on a flow desk and wind up making a few million a year, that should suffice for you or for anyone.

UserAccountDeleted

16y

Wouldn't mind that... What is the frequency of trades on a prop desk? Is it mostly technical/quantitative/fundamental?

Jimbo

16y

it varies and all of the above

JJ1980

16y

Best Response

"huge" bonuses are made by people who run their own hedge fund. Ownership allows them to trade their own capital in addition to collecting 40% of firm's P&L.

It's a lot more common to hear traders at hedge funds making 100 million vs. a prop desk at a bank. I'd say making 10 million on a prop desk at a bank prob means you're in the top .5% of all prop traders... Why would you stay at a prop desk at a bank if you're making such large numbers when you can trade or start your own hedge fund?

Prop desks usually allow traders to keep between 10%-20%+ of their own P&L. Huge bonuses completely depend on the product and risk they are allowed to take. I've heard that the percentage can be as low as 1% (lower on the rung traders) if you're moving HUGE volumes on a huge desk. Ie 1 billion dollar books (at hedge funds)

client flow trading P&L depends how vanilla the product is. I would assume you can't really scalp your client if they want straight S&P Index futures. This is very different if you're making markets on some illiquid products. I'm not too familiar with flow traders but I believe that's how they make money.

Can anyone give insight to how the flow traders differ from sales? I guess the sales guy goes to the flow traders?

m8875

16y

JJ1980:
"huge" bonuses are made by people who run their own hedge fund. Ownership allows them to trade their own capital in addition to collecting 40% of firm's P&L.
It's a lot more common to hear traders at hedge funds making 100 million vs. a prop desk at a bank. I'd say making 10 million on a prop desk at a bank prob means you're in the top .5% of all prop traders... Why would you stay at a prop desk at a bank if you're making such large numbers when you can trade or start your own hedge fund?

Prop desks usually allow traders to keep between 10%-20%+ of their own P&L. Huge bonuses completely depend on the product and risk they are allowed to take. I've heard that the percentage can be as low as 1% (lower on the rung traders) if you're moving HUGE volumes on a huge desk. Ie 1 billion dollar books (at hedge funds)

client flow trading P&L depends how vanilla the product is. I would assume you can't really scalp your client if they want straight S&P Index futures. This is very different if you're making markets on some illiquid products. I'm not too familiar with flow traders but I believe that's how they make money.

Can anyone give insight to how the flow traders differ from sales? I guess the sales guy goes to the flow traders?

I know this guy who made $5 million bonus. He's 29 and he said that he's not good and ppl with his position should make more. Which one is right? lol..

Jimbo

16y

Qui consectetur optio quis hic maxime. Ipsa provident quibusdam nobis incidunt qui nesciunt. Ex possimus iure voluptatem reiciendis autem. Dolorem ex molestias pariatur consectetur.

Ratione magni id rerum nam culpa distinctio maiores dolorum. Nihil ut dolor quis temporibus facilis sequi. Quas qui quia fugiat culpa sunt quis. Voluptas hic sit reprehenderit quis numquam est velit. At omnis eos ea aut molestiae atque ipsum.

Dolore placeat velit laboriosam ut sed. Eaque nesciunt dolore tempore impedit autem facere. Sed aut voluptatem laboriosam deserunt. Minima molestiae id et sint.