Fancy yourself as a trading whiz? Proprietary trading houses offer an alternative entry point. It's not for everybody though. You have to be extremely good, extremely motivated and extremely resilient. The working culture is also normally more 'informal' (be prepared for lots of blokes) and flexible than in a bank.
What is it?
In a nutshell, it is trading with the company's own money, rather than with clients' money. Prop trading houses don't need FSA regulation because they are only risking their own cash.
Unlike investment banks, prop trading houses don't do the 'milk round' so jobs are available all year round. They don't always insist upon immaculate academic credentials, either - Essex-based Elocal Traders said it doesn't look at academic achievement at all.
And long term, the financial rewards are potentially huge - top traders make hundreds of thousands a year.
Don't expect a hefty starting salary. 1,000 a month was mentioned by both Met Traders and TCA Futures. Others offer no basic pay at all. Whatever the set-up, the bulk of pay comes from a share of the profits you make by trading. This could start at 50% and go up as you become more successful.
"We'd expect our traders to be making at least 10k a month," says Steven Davies, director at TCA, "but not straight away. It takes time to get there."
"Of our 42 traders, maybe 35% are elite traders, making six figures plus, 40% are the middle guys and 25% are in the nursery," says Danny Kessler, MD of Met Traders.
Training varies. There may be some classroom training, some time trading on simulators and some mentoring from an experienced trader. Mentoring is best. All the houses we spoke to said they start people trading for real very quickly - but in small lots. As trainees become more successful they are allowed to trade higher amounts.
There are two sides to being a successful prop trader - one is the mental and numerical agility to grasp trading, the other is the right kind of character and personality.
Met Traders and TCA both said they favour graduates, generally with a maths or science background and good A levels. In most places you can expect to have to take a numeracy test.
As for personality, "You've got to be able to deal with losses and wins without becoming fixated," says Joseph King, head of operations at Elocal. "You've got to have self-belief and relish a genuine meritocracy," says Kessler. "Someone who wants to work for a bank may think they want a meritocracy, but actually there's a comfort factor in working at a bank and sharing the benefits of a desk."
"We look for people who strive to do things, who've had a knock and bounced back," says Davies.
All three added that successful sportspeople often make good traders - because of the competitiveness.
What about the girls?
There are very few women prop traders. Elocal and Met Traders said they have no(!) women at present on their trading floors.
"In 20 years in this business the number of women I've come across is few and far between," says King. "It could be the environment which is quite aggressive and testosterone-fuelled."
"We actively try to recruit women but with limited success to date. Walking into a very male-dominated environment is not very attractive for many women," says Kessler.
TCA currently has "about five" women on its trading floor amid 30 men. "Women are either rubbish or brilliant at it," says Davies. But, he adds, "The women who apply to us have often thought carefully about what is involved and what their strengths are, whereas every chap dreams of being a trader and sitting at his desk reading GQ."
What will it lead to?
Very few stay on the trading floor beyond 40. The most successful prop traders end up setting up their own businesses.
Moving into the middle or back office of a bank is also not uncommon.
Competition is tough - Met Traders said it gets about 1,000 CVs a month - and takes on a couple of people. TCA said it gets about 600 applicants in each recruiting round, and takes on batches of eight on a quarterly basis. Elocal recently hired 12 people from a batch of 50 applicants.