Is prop trading dead?

Traditional trading firms will not survive unless they evolve. Furthermore, the profession of trading could use a bit of de-romanticizing.

|
Brendan McDermid/Reuters
A trader watches his screens on the floor of the New York Stock Exchange, July 27, 2012. Brown argues that the concept of being a "trader" on the stock market is one that needs a but of de-romanticizing

Is Prop Trading Dead?

Or is it just the fact that most prop trading firms, as they are currently constituted (student pays to be taught, 1 in 20 kids graduates and becomes consistently profitable, traders are regulated by Finra as brokers, etc.), cannot survive without some evolutionary change?

Have the algos finally finished their work, leaving almost no room to breathe for the human daytrader?

I'm not an expert on this particular corner of the market, although I have many, many friends and acquaintances who are involved in some way, shape or form.  There are two stories you should read on the topic if you're interested:

Start with:

Letters to a Young Trader (Dynamic Hedge)

and then the response from Mike Bellafiore:

The Opportunity for a Prop Trader (SMB Capital)

The concept of being "a trader" is one that has long been in need of a bit of de-romanticizing.  It is not an adventure or a ride alongside charming, debonair riverboat gamblers.  The slings and arrows of outrageous fortune one hopes to encounter and best come in the disguise of a blinking cursor and a flickering column of quotations.

Trading is about as romantic as any other exacting profession that relies on repetition and discipline. Meaning not at all, most of the time.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Is prop trading dead?
Read this article in
https://www.csmonitor.com/Business/The-Reformed-Broker/2012/0730/Is-prop-trading-dead
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe