Quant Opinion Career advice: Prop Trader vs. Sales Trader/Broker vs. Quant Algorithmic Trader

(Last Updated On: May 18, 2011)


Quant Opinion Career advice: Prop Trader vs. Sales Trader/Broker vs. Quant Algorithmic Trader

Hello everyone. I am currently in a position where I can begin a career either as a proprietary execution trader, a sales trader or a quantitative algorithmic trader.

I have outstanding mathematical skills and solid quant theory, however I can’t seem to find any entry into this career path. This is opposed to a number of doors I can open to become a prop trader or sales trader.

What career would you advise as the easiest to make a small fortune? Or perhaps surest?

I have read the dry facts regarding these roles but would like to know about them from people with experience. Would prop trading have any elements of creativity to it as I progress? Is Sales trading mainly a people skills / networking role? Is quant algorithmic trading beyond me, no matter how numerate I believe I am, if I haven’t gone to MIT or Oxford?

Many thanks for your time in advance guys



I’m not a trader, but have worked with various desks, so take this with a truckload of salt 😉

If you’re in this for the money, prop trading is the way to go. Playing with House money, limits are well defined and risk metrics are well defined. Money you get to play with and asset classes you get to play with will be defined by the desk and the manager. You’ll never work with the FCs, you may work with the floor traders. Heck, that’s where the real money is anyway. Floor trading. In for a few years, make serious money, get the heck out, buy a condo in Acapulco and trade for your own account.

Sales trader probably means working a retail desk, which means you’re working primarily with the FCs, or possibly with high net worth clients. Choose this if you’re thinking of working hedge funds, as you’ll spend alot of time with clients, albeit sophisticated ones. Though I’d assume that you’ll have to work your way up to the Big Money and that’s when you can build a stable and maybe go out on your own. It’ll take a while, but if you’re good enough you can eventually hang your own shingle. So, you start supporting the FCs and doing boring block trades, then work your way up.

I’m most ignorant about quant trading, but from what I know, you spend your time writing models that plug into the HFT engine, primarily working multi market arbitrage. Sounds like fun if you’re really a math geek, and alot of money to be made as this is a hot field right now.

It all depends on what you want to do. Prop desk gives you the most latitude as you can structure trading strategies without worrying too much about the client. As long as your manager signs off. As you get better, your funding increases, and they loosen the reigns. But you’ll never work with the end client.

If you’re more of a people person, then retail desk sounds like a good place to be, as you’ll do alot of that. And as you get good, you can eventually strike out on your own, or become a star trader at an established fund.

If you like running models and checking large data sets, maybe algo trading is for you.

Hope this helps.


As far as I am concerned,there is no easy way to make profit in market…A very less number of traders made PnL less than 1 year in my company,trading manager will not give you big lots initially…no doubt that trading is highly creative,but also with pressure…remember that the instinct of trader is to make profit,therefore,a lot of PhD quant traders were fired by improvement of their inability to make money…thats my opinion…


There is no sure path to making money throughout 2003-2007 plenty of quant types were making money by designing complex mtge securities that would slice and dice mtges and repackage them and sell them as low risk securities to pension funds in dusseldorf and hong kong. While that strategy of musical chairs worked well for a few years in 2008 the music stopped and the institutions that created them were left holding the bag. It turned out that no one really understood them in the first place.

Right now the new hot hand is high frequency trading and strategies that in many cases are dependant on co-location and picking off retail clients by front running customers. So who knows how long HFT will remain the hothand.

I would opt for prop trading but dont wed yourself to one strategy as things come into and go out of favor. Sometimes very simple strategies can make a lot of money for example over the past few years with the exceptionally low fed funding you can make a lot of money by buying treasuries. There will always be a fad de jour and it will work for a few years till it blows up or is disallowed by regulators


what is the difference between prop trading and floor trading? i thought they were the same thing.

Actually, this is probably the best advice you can get. It’s all about the P&L baby… 😉



NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!

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