Is Prop Trading Dead?

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.