What are the Trader exit opportunities?

Being a trader is a very non-transferable skill set, so it’s often compared to being a professional athlete. You have a chance to make big money for a few years, but once it’s over, it’s over, and you often have to look for an entirely different career that can be a big downgrade. I worked in Chicago prop trading for 15 years so I have a lot of data on where my trader colleagues have exited. Many of the non-technical traders have been left behind since they didn’t have the coding background to transition into “quant trading” roles, however, traders are type A people, so they mostly land on their feet.

—

1) They switch industries - many have joined startups in misc business roles (in the 2010s, there was a continuous brain drain from Chicago prop trading to SF/NYC/Chi startups as the former was contracting and the latter expanding. This has since reversed as the two industries move in cycles. We now have a lot of ex FAANG people flooding over to prop trading). They usually land these gigs through their Ivy League network of well-connected friends. However, others have started real estate businesses, beer breweries, some went into insurance, or play poker professionally, and unfortunately, many of the older guys with less formal education are driving for Uber (I used to meet many former pit traders when I’d take uber rides to work).

2) They go back to school to pivot - Mostly business school to pivot to private equity, investment management, consulting, etc. Others with technical skills have done a masters in Financial Engineering or Computational Finance. This gives them a chance to go back into algo trading or to become financial engineers or quants. Though rare, some have gone on to medical/law/education as well.

3) They attempt to trade their own capital - I know about 7 different traders that went this route with varying results. If you've saved up some big bonuses and you're a risk taker, you can fully trade your own capital, but Chicago has many shops that arrange deals with you as well: Ronin (RIP), DV, WSP, or Prime are examples. A common arrangement is putting down $100k to get access to about $1 million in capital and splitting the profits 50/50. If you lose over $100k, they can cut you loose and keep your $100k, but usually they give you a chance to make it back because they understand that bad luck happens.

4) They move to middle office work at Banks - While trading is deemed as ‘front office’ it’s not uncommon for traders to end up settling on a more middle office type of job within finance. The knowledge base required for these jobs usually have a good amount of overlap with trading as they both might require passing some Series 56/57/58 type of exam to deal with clearing trades and brokerage regulations and so on.

—

There's a reason why ambitious parents push their kids to go into Med, Law, MBA, or Engineering, but never mention ‘trading’ even though many traders have made 7 figure bonuses. It's because the industry is inherently risky, and if things don't work out, you usually don't have transferable skills to get back on your feet easily. Trading is a high-risk/high-reward career path, and parents usually want a stable but lucrative career path for their kids.