So I'm planning to leave my current role, working at a bank's trading desk. My bread and butter is in energies futures/swaps. I trade commodities relative value and its' forward curve, I'm going to be joining a prop shop in the city, shit shop. You all can probably already guess who it is. They loved to have me and frankly, I don't care where I work as long the split is generous and I have my own autonomy, which I will. I'm going to be in the range of 50K-200K a month, PnL wise. Yeah, if I really do make that, that's my PnL, minus the fees and the shop's cut of the profit. Obviously, I'm going to be slightly risk adverse, as my own money is on line, so that's why the PnL isn't that staggering.
So I know a lot of hedge funds have a tight risk limit..
How much do these portfolio managers at Millennium, BlueCrest, etc, make? Does any body have experience working under one? I mean, if the PM is strictly futures, I assume it' going to be very short term and I doubt he or she will be putting 1000 lots on an outright.
Well, unless it's super liquid and you're trading something like Eurodollar, which I have a trader who came from BlueCrest sitting next to me at the bank putting on 400 clip trading directionally all day while making markets.
hmm i work as an analyst under a pm (not at the ones you listed), but i'm not exactly sure how much he is bringing in. However, I know that one of the more senior analysts is bringing in around 500k +/- 100k . So i would imagine he hits the high six to 7 figure range.
Millenium pays 15% of P&L (lose 5% and capital / risk is cut in half...lose 10% and you are fired) Exodus pays 16% of P&L with similar risk metrics (they are a little more generous with relative value strategies) Citadel is similar BlueCrest, Schoenfeld and Balyasny are typically a little tighter on risk (lose 5% and you are fired)
All of these firms give ~100mm of capital (pre-leverage) to each PM as a starting point..and that typically gets levered 5-10x. So, the risk metrics are based on the 100mm...so lose 10mm at Millenium and you are fired. Top performers are given more capital.
Quant shops like Cubist and others have similar metrics. All of these shops don;t want to keep you at 100mm...they want you to grow quickly to 300mm-500mm (pre-leverage) because they have a lot of capital to deploy and with 200 pods at millenium, every additional pod becomes a management headache..
I'm guessing FirstNY pays a higher % of P&L, but they a much smaller capital base, so absolute risk $$ size will be smaller.
~200k/month...so about 2mm/year of P&L is going to be too small for most of these large multi-manager firms...not worth the management headache. If you can grow that to 10x (if the market supports that), then ok....but if you tell them that your strategy caps out at 200k/month...you would be shooting yourself in the foot.
If going to DV, if you put up your own $$ as a first stop loss i think you can get ~ 60-70% of your P&L...but you are essentially just trading your own money with more leverage and lower transaction fees
If you are trading futures and putting up your own money as first loss...why not just open a futures account at a retail broker, work from home in a low tax state and keep 100%?
Also, why don't you ask the guy who came from BlueCrest what the deal is...he must have the rundown from when he auditioned for the various pod firms. My numbers are from a few years ago (tho i suspect have not changed much)
i'm curious what kind of questions they asked you
i'm assuming "whats your strategy/edge" and "what's your strategies P&L history" and how you responded?
Calling your future employer a "shit shop" before the first paycheck even hits your bank account is a bold play sir.
this sounds like he is being forced to put up 1st loss capital...which is both good and bad
good - i expect that his cut of P&L will be high (60-80%) bad - if you lose money...its 100% YOUR MONEY that you lose + you probably have to pay technology fees, compliance fees (probably around $1,000 per month) and health insurance
i would strongly suggest doing a cost/benefit analysis of going this route vs just opening a futures account with a decent futures broker. The TT spreader is decent.
A MUCH better option would be going to Millennium (if they will hire you...in the interview got to say that you made 20mm last year, got robbed because your senior trader took all the credit of your work, and market supports even more if you had the ability to put on more risk....and also say in your back test that goes back thru 2008 you never had a drawdown bigger than 5%...they can't verify....but you got to say that to get hired)
Ooooh, good one and yes, everything you said previously is correct. Hope you're well man.
50-200K/month is not serious for MM shops. Per day? Sounds better.
Eh, I guess. Unless my strategy is driven by algos so I can trade multiple products at once because it is systematic in nature but there are too many logic to implement and I'm not code savvy enough to build this out and I don't want to hire a developer and tell him how and have him possibly steal my strategy. So it's really up to me to build this out on the side while I prop trade. But hey, the prop firm is offering me a 80% cut, I'll take it... At the end of the day, this strategy is my livelihood and being in this business, you have to protect it at all cost because for me, trading is all I know and it's all I've done in my 8 years in finance, well some trading assistant and risk but trading is the majority (throughout my 20s). I can't move to banking, coding or etc. As you know, trading isn't a transferable skill, that is... if you want to leave to a different industry. So I can't take the chance of sharing anything. I've spent too much time, getting headaches, stressing and countless hours defining my own strategy and staying up til 4am
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