were hiring recent university and business school graduates. There is no exact data on the number of currently functioning private trading firms, but according to experts, there are no less than a hundred and no more than three hundred. In any case, there are many times more of them than there were when I first got acquainted with this industry.

Unlike most Wall Street firms, private trading companies do not have clients. We do not provide services or help others sell them. We do not take other people's money and do not speculate on it. A prop trader's workday evening isn't filled with dinners at trendy New York restaurants, hangouts at trendy spots like the Buddakan, and visits to Rangers games. We don't need to gossip.

We eat the meat of the game we can shoot. Our profit depends solely on the actions of our traders. When we make a mistake, we lose our money. When we're right - a lot nicer, I must say - we get a percentage of the profits.

Welcome to the world of private trading
Private trading companies are created and exist solely in the interests of the partners of the company and its employees, we are not talking about clients here. The client of the traders is the firm itself. Traders working in private companies actively speculate in stocks, bonds, options, commodity contracts, derivative financial instruments, using the capital of the company or their own. They have nothing to do with client money.

Private trading companies cannot boast of the fabulous profits they receive from insider tips. I can't imagine where one could meet an insider; my chances of meeting him are slim, unless he suddenly materializes in my office and says, “Hi, I'm an insider. Buy BNI stock urgently because Buffett is going to buy a stake in this company. We read our news on public resources such as briefing.com and Bloomberg.com. Some private trading firms are interested in receiving research reports from institutional banks like Goldman Sachs and they can pay for them. We have access to this kind of information, but it does not play a key role in decision making. In my company SMB Capital, only the manager of the trading room has a phone (his mother often calls him). We depend primarily on our trading prowess. There are months during which a prop trader does not manage to earn anything, despite the fact that he had to work 50 hours a week. It happens that the guys have to give all the best even more and at the same time lose money. In 2002, I did not earn a penny. On the other hand, there are days when, by 9:35 in the morning, a trader has ten thousand, if not more, in his pocket. He hits a few keys, the stock behaves exactly as he expected, and a huge profit settles into the account so quickly that a cup of coffee does not have time to cool. Sometimes absolutely fantastic things happen: on Black Friday 1999, I walked slowly to my desktop, turned on the computer, and when the screen lit up, I saw that my trading account had grown by 50 thousand dollars. This is how you should welcome the morning! This is not at all like working under a guaranteed contract, which brings another check every two weeks with always the same numbers put down on it.

Many capable people have left our cause, resigned to the impossibility of mastering the rules of the game. It will not be difficult for a smart person to use the trading education received from us when looking for a stable job in the field of finance. However... imagine a prop trader in jeans and a T-shirt with a seven-figure annual salary, imagine such a guy in a subway car next to dressed up bank manager. I know this is not entirely fair, but in private trading, our clients are ourselves. Do you ever think of dressing up to impress yourself?

However, there is a very real chance that the most brilliant and super talented person will not be able to earn a single cent by trading - in this case, we will send him to pack his things. It is pointless to deceive yourself and pretend to be a trader, in such a situation everyone loses. In vain, claiming to be a trader loses already because he is not doing his job, and his company is losing time and money (however, other market participants would like such clumsiness to remain in business, after all - this is their stable income). The market requires traders to strictly follow all the rules. Many are unable to survive in such harsh conditions.

All decisions in private trading firms are made by traders. Unlike other companies, there are no managers or partners with whom all steps taken must be verified. For better or worse, success depends entirely on the trader himself. You determine the degree of probability of the rise or fall of the share price, as well as the amount of capital involved. If your calculations are correct, then you and the company win money. No matter how the trade ends, its results appear not only on your screen, but also on special monitors that display the results of the entire desk - something similar to the standings of a sports competition. Prop traders do not execute client orders, they do not calculate VWAP (Volume-Weighted Average Price - volume-weighted average intraday share price). It is as difficult for a prop trader to outbid the value of the volume-weighted average price as it is for LeBron (an American basketball player who plays for the Miami Heat) to score over 30 points in a game. We do not place orders under the dictation of a portfolio manager or hedge fund manager. This is a type of trading "keep your finger on the pulse" - you decide which market and what securities to work with, what will be the volume of the trade, entry and exit points. Your future depends solely on your ability to speculatively operate in the market.

If you are new to a private trading company, be prepared for the fact that very soon you will be provided trading account. Perhaps you will be asked first to complete the training program adopted by the company and set up hotkeys for quickly executing commands from a working computer, after which you will be sent into battle. You will not be an errand boy, as interns and interns are, and you will not have to follow orders at the Asian session at 2 am. A good training program will give you an idea of ​​your potential as a trader, and it is your judgment, coupled with your trading talent, that will determine your future in this business.

In hedge funds and large banks, the most promising traders sit on the bench for several years, waiting for the opportunity to show their ability to work with real capital. In general, it is difficult to get into a hedge fund without first working in a serious bank. In SMB Capital, traders already on the 26th day of their stay in the company receive real trading capital at their disposal.

In contrast to past years, when youngsters were preferred to be led through the “trial by fire”, today the best private trading firms have developed their own, intensive training programs. Company partners invest a huge amount of capital, time and energy in the people they train. If the NA trader lives up to expectations, all the money and effort will go down the drain. Therefore, the future of private trading companies depends to a large extent on the quality and effectiveness of the training program.

The attractive aspects of working in a private trading firm are: almost unlimited earning opportunities, no rigid office politics and subjective assessments of annual work, on the basis of which the size of the bonus is determined and the prospect of promotion, no phrases like - "You should take on more responsibility." Every single day, traders choose stocks to trade, count profits down to cents, and take home their share of the booty. Increasing the percentage of profits is the only thing that the most successful traders can bargain about. In many companies, partners invite the most talented young traders to join them, just as they did in the good old days at Wall Street investment banks. Transparency firm policies, objective accounting of all results, and instant communication with managers...where else in the corporate world can you find this?

Okay, now let's look at the matter from the other side. Every day brings newness - you never know what might happen tomorrow.

Shifting papers from place to place, trying to diversify the work routine is not for prop traders. As an example, the story of how I spent Black Friday 2009 after Thanksgiving, on which I was supposed to relax, watch some action movie on TV and enjoy a hearty lunch.

I woke up at 5:15 am in Albany, New York, and drove my rental car to the train station. There I had to take a train that would take me to the New York suburbs, from where I could take the subway to my office. I had to get ready for the day, talk to partner and co-founder Steve Spencer, go over the charts, and figure out how the behavior of foreign markets might affect the health of US stocks.

Despite the day off that we arranged at SMB Capital, at night Steve and I had to urgently contact our traders due to news from the United Arab