3 ms·

Nearly impossible. No financial firm is going to pay a 24-year-old that kind of salary, so it's only possible if he got it through bonus. Traders get bonuses ba

Nearly impossible. No financial firm is going to pay a 24-year-old that kind of salary, so it's only possible if he got it through bonus. Traders get bonuses based on P&L, usually around 10% if they're senior. Let's say 10%. Then he made 9 figures for his firm... but no firm is going to let a 24-year-old take enough risk to generate a 9-figure P&L. I'm calling bullshit. [Update: Well-executed, and he's clearly smart, but his story is incredible. No one hires a 24-year-old to start a desk. This is probably one of XO's finest.]

nostrademons 17y ago
He said AGI, not salary. AGI includes bonus and all other forms of non-capital-gains compensation. FWIW, one of my classmates graduated in 2003, worked for one of the big-5 financial companies for 3 years, then left with 4 friends to start a hedge fund. They had a $3B book when they started. If I assume normal 2-and-20 fees, that translates into an 8-figure income at the age of 25. There's a lot of money chasing skilled people in finance. If you've got the credentials, some of it will find you.
- pwnstigator 17y ago
  Of course, but bonus is based on P&L, and no one's going to give a 24-year-old enough trading freedom to run up the kind of profit that would justify an 8-figure bonus. Starting a hedge fund is different-- if you start a hedge fund, you can make that kind of money-- but <0.001% of people under 30 have the kind of connections needed to get investors.
  - deleted 17y ago
    [deleted]
  - iamamonkey 17y ago
    > Of course, but bonus is based on P&L, and no one's going to give a 24-year-old enough trading freedom to run up the kind of profit that would justify an 8-figure bonus. My risk limits and capital have been increasing that allow this. Previous years were much lower. > Starting a hedge fund is different-- if you start a hedge fund, you can make that kind of money-- but <0.001% of people under 30 have the kind of connections needed to get investors. Actually, it's not that different. The labor market is reasonably efficient. If your employer thinks you can run off somewhere else with a low barrier-to-entry (another fund or start your own) and can make 10 times as much, they'll up their pay to prevent you from leaving. Of course, non-compete agreements throw a wrench into the "efficicent labor market" theory, but it's correct to a first approximation.
iamamonkey 17y ago
Reddit OP here. > Nearly impossible. No financial firm is going to pay a 24-year-old that kind of salary, so it's only possible if he got it through bonus. Traders get bonuses based on P&L, usually around 10% if they're senior. Let's say 10%. Then he made 9 figures for his firm... but no firm is going to let a 24-year-old take enough risk to generate a 9-figure P&L. I agree it's nearly impossible, which is why I make the post. I would like to point out I've been working here longer than my age implies. > I'm calling bullshit. A skeptical and reasonable position to have. If I weren't me, I'd also call fake. > [Update: Well-executed, and he's clearly smart, but his story is incredible. No one hires a 24-year-old to start a desk. This is probably one of XO's finest.] "Start a desk" really meant I was given a little capital to build out a quant-trading platform and maybe a bit to mess around with. It took a while to get lines and machines set up, set up data collection, etc. After that, the capital and risk limits I was given was on par with other junior traders. Why didn't they hire an experienced quant trader right off the bat? My firm didn't have the right infrastructure to support quant trading, so any senior person would have asked for a big up-front bonus to be setting this stuff up. Management here was too cheap and risk-averse to pay this. They took the gamble on someone junior and technical.

nostrademons 17y ago

He said AGI, not salary. AGI includes bonus and all other forms of non-capital-gains compensation. FWIW, one of my classmates graduated in 2003, worked for one of the big-5 financial companies for 3 years, then left with 4 friends to start a hedge fund. They had a $3B book when they started. If I assume normal 2-and-20 fees, that translates into an 8-figure income at the age of 25. There's a lot of money chasing skilled people in finance. If you've got the credentials, some of it will find you.

pwnstigator 17y ago
Of course, but bonus is based on P&L, and no one's going to give a 24-year-old enough trading freedom to run up the kind of profit that would justify an 8-figure bonus. Starting a hedge fund is different-- if you start a hedge fund, you can make that kind of money-- but <0.001% of people under 30 have the kind of connections needed to get investors.
- deleted 17y ago
  [deleted]
- iamamonkey 17y ago
  > Of course, but bonus is based on P&L, and no one's going to give a 24-year-old enough trading freedom to run up the kind of profit that would justify an 8-figure bonus. My risk limits and capital have been increasing that allow this. Previous years were much lower. > Starting a hedge fund is different-- if you start a hedge fund, you can make that kind of money-- but <0.001% of people under 30 have the kind of connections needed to get investors. Actually, it's not that different. The labor market is reasonably efficient. If your employer thinks you can run off somewhere else with a low barrier-to-entry (another fund or start your own) and can make 10 times as much, they'll up their pay to prevent you from leaving. Of course, non-compete agreements throw a wrench into the "efficicent labor market" theory, but it's correct to a first approximation.

iamamonkey 17y ago

Reddit OP here. > Nearly impossible. No financial firm is going to pay a 24-year-old that kind of salary, so it's only possible if he got it through bonus. Traders get bonuses based on P&L, usually around 10% if they're senior. Let's say 10%. Then he made 9 figures for his firm... but no firm is going to let a 24-year-old take enough risk to generate a 9-figure P&L. I agree it's nearly impossible, which is why I make the post. I would like to point out I've been working here longer than my age implies. > I'm calling bullshit. A skeptical and reasonable position to have. If I weren't me, I'd also call fake. > [Update: Well-executed, and he's clearly smart, but his story is incredible. No one hires a 24-year-old to start a desk. This is probably one of XO's finest.] "Start a desk" really meant I was given a little capital to build out a quant-trading platform and maybe a bit to mess around with. It took a while to get lines and machines set up, set up data collection, etc. After that, the capital and risk limits I was given was on par with other junior traders. Why didn't they hire an experienced quant trader right off the bat? My firm didn't have the right infrastructure to support quant trading, so any senior person would have asked for a big up-front bonus to be setting this stuff up. Management here was too cheap and risk-averse to pay this. They took the gamble on someone junior and technical.