Man, I was getting text messages last week the very next day I left my position about me setting up shop at our competitor, Assent. The truth is, I have filed for some paperwork but I have not put a deposit down and funded my account just because I still wasn't sure how much trading I'll be doing and I couldn't quite go through with the decision to switch. I do have some guilt as if I'm betraying the team if I do switch. It feels as if I stabbed my brother in the back.
Andy had proposed a new structure to the guys on the older commission plan to increase their commission rate, an added infrastructure fee, and I think lower split? I don't remember that part. It didn't really involve me since I was on TAC plan so I didn't pay attention to the great details. At least within the discussion in my team the move didn't make too much sense. The purpose was so the company can have a higher margin but chances are we'll lose a few of the top traders that are getting the higher split, which would negate the savings/margin the company would get from the move.
Sure enough, that very same week two very major traders, one that's definitely in the top 3 P/L wise and the other is probably somewhere in the top 10 but has many HP traders under him, left the company. From my understanding, Andy made an announcement late last week to switch back to the old compensation plan.
I'm not going to doubt Andy. I believe that entrepreneurs and artists do see the world a little differently. He probably sees something with the whole China move. We knew we weren't going to be able to trade A shares but the plan is to have access to Japan and Hong Kong. I know at least for me I was getting tired of having more than half of my profits go to fund this project and the number of employees we have working in the back offices. It was one thing if we were seeing promising results but I can't even plot VWAP on my charts or overlay multiple stocks on one chart to compare price % movement. Sometimes if I have an order sitting out for a position I'm in but my stop gets triggered before that all of my special programmed keys would get fried, to which they have yet to be able to find a solution for and it'll cost me some serious money sometimes.
I know some of the employees in different departments and a good handful of them provide some real value. I love the pit guys and the quant team, but there's a ton of people, especially the new hires that I have no idea what they do and I know we're the ones funding their paycheck and 401(k). It just didn't sit very well with me the longer I think about it
There are many reasons why I left and the higher payout at Assent is only one of the factors (and it's not the main one despite what the rumor is saying). If I was going to be trading part-time, I knew I didn't want to take such a small slice of the pie.
skip to main |
skip to sidebar
My experience as a trader. There are no stock tips here... This is strictly a journal for my benefit and anybody else interested in trading for a living. Any opinion are strictly of my own. I'll throw in a few funny or more personal, non-work related posts in there
4 comments:
Good luck with everything. There is no other "job" like trading. Let us know how it all works out and if you go to Assent. Kershner has some positives but this is trading. Don't feel bad about leaving. There are no emotions in trading.
"There's no emotions in trading." I like that. I can't help but feel that I've stabbed my brother in the face. One of the guys on my team I've known him all through college. They were the ones that invested the time and backed the capital for me to learn how to trade so I feel pretty guilty about switching.
I just reread this, I guess it answers my questions.
When I interviewed the 45% split seemed generous since we take no risk. However I guess there is huge upside and limited downside for Kershner with new hires since they start us on such small share size. Zack O was apparently down $25k initially, before he learned to trade well. That seems like alot to me, but it actually isn't even a yearly salary for a trainee position. Which is what he was.
I guess my point is that, yes, Kershner sortof bones the successful traders over a bit; but Kershner made an investment in them, and they deserve the payout. Also many people do leave once theyre successful, which is an unknown risk variable for Kershner.
One thing this reminds me of is the classic tragedy of the commons, where everyone choosing to serve their own selfish interests will hurt the group as a whole. The profitable traders that leave Kershner drive up the costs for everyone else.
(That obviously doesnt apply to you since you only left since youre part time now, but I think the "fairness" involved here is a very tricky issue.)
Also, Chinese markets could turn out to be huge. Andy may be a true visionary. I for one would love to move to Shanghai in five years or so.
Thanks again for the great posts.
45% is probably the lowest split you will find in the prop trading industry. Once you start making money, you are trading with your own money (a percentage of your profit is held back to be released at a later time, if you go negative on the month, that money is not released until you become positive). Did you learn about that in the interview? I was told a few months in.
Kershner is a great place. You can learn how to trade there. You can learn from profitable traders. You don't have to put up capital.
That being said, I understand the move to Assent. Trading is a business. Once you learn how to trade, why pay 2k a month and get 45% when you can put up a little money and pay a few hundred a month and keep 70-100% of profit (depending on the firm).
PS. The 2 big traders that left were probably getting 90+% payouts when you factor in coaching checks, profit sharing, and their regular split. Its far more profitable for the company to have 1 good trader at TAC make half as much as either one of those two.
Post a Comment