Prop Shop vs. MFE

[cheesesoup]

I am currently an engineering undergrad graduating next year. I currently have a job offer for a top-tier prop shop (Optiver, DRW, SIG level), but have also been thinking about applying to MFE programs.

However, I'm unsure about the pros and cons of either choice.

On one hand, the base salary from the prop shop is great, and I feel that I would learn a lot about trading while earning a very good salary; however, I'm afraid that the skillset learned from a trading position would be too narrow to be applicable to any other job other than prop trading.

On the other hand, by applying to and going to a MFE program, I would be able to learn a much wider skillset and have more choices; however, I'm not sure if these choices, which include but are not limited to investment banks, risk management, quant roles, etc. are actually better than prop trading in terms of salary, working hours, career path, and salary upside? Meaning, if they are actually not better, would simply going straight into prop trading instead of MFE actually be better as it saves the time and money spent going to a MFE program?

There's also the added bonus of having a brand-name school to your credentials after attending an MFE program, but I am unsure as to how much weight that carries in the financial industry? If so, around where would be the cut-off in terms of rankings of schools, where there is no added-value from school reputation?

Any help, insight or discussion on this topic would be helpful!
Thanks!

 

[BeepImaJeep]

I think you are severely overestimating the opportunities opened up by a MFE degree. The median student's career prospect is worse than the career prospect of someone who started at one of these shops. In fact, there are 'above average' students from top MFE programs who go into these prop shops after graduation every year.

While it's true that careers transitions are tough after prop trading, it's actually similarly rough to transition for most functions in finance. For example if you were to do risk management, you and switch companies and you can switch industries, but it's very hard to switch to a trading function. You are building a very specific skill set for most roles.

School brand name matters for your first job, for international jobs that you might be considering, and way down the line, for any management positions. Functionally, it doesn't mean much after you've been working a couple of years.

 

[cheesesoup]

@BeepImaJeep
If not MFE, would other degrees be better? Also, would there be restrictions/difficulty in moving up to management level in trading without a masters of some sort, or is it truly all merit based?

 

[MRoss]

1. Take the job.
2. Apply to MFE programs.
3. Do MFE part-time.
4. $$$