"Trading can be great because there is no BS of politics and you can measure what you've contributed every single day. You're out playing games for money, sometimes you're grinding, sometimes going on a raid..."
Proprietary trading is a pain, especially if you have no investors. You take on all kinds of unimaginable liabilities if you set up a self-clearing BD. Life is very stressful, because even problems with external agencies can cause problems. For example, suppose you were spread trading (buying one thing and selling the other, expecting the prices to converge) and one trade was broken. You could wake up the next morning with millions or billions of dollars in liabilities (this happened to many people in 2010).
The real problem is that, for most people, finance is interesting because they don't share in the downside. If you have a job as a trader for a bank or hedge fund, and you blow up (assuming, of course, you were not doing anything illegal) you merely lose your job. You aren't in the hole for the liability.
Most of finance operates in that mode, dealing with OPM (other people's money).
A broker-dealer (B-D) is a person authorised to trade securities on its own account (dealer capacity) or on behalf of fiduciaries (broker capacity).
Clearing refers to everything that takes a trade from transaction, e.g. a voice confirmation over the phone, to settlement, i.e. securities and cash having changed hands. Clearing involves such processes as making sure you (and your customers) remain within margin constraints, mailing tax documents, dealing with counter-parties messing up and sending you wrong securities/amounts of cash or forgetting to send you anything at all (a failed trade), etc.
A self-clearing B-D, instead of outsourcing this function to a bank's "prime brokerage" function or a dedicated clearing outsourcing firm, has its own operations department that takes care of these functions.
Proprietary trading is a pain, especially if you have no investors. You take on all kinds of unimaginable liabilities if you set up a self-clearing BD. Life is very stressful, because even problems with external agencies can cause problems. For example, suppose you were spread trading (buying one thing and selling the other, expecting the prices to converge) and one trade was broken. You could wake up the next morning with millions or billions of dollars in liabilities (this happened to many people in 2010).
The real problem is that, for most people, finance is interesting because they don't share in the downside. If you have a job as a trader for a bank or hedge fund, and you blow up (assuming, of course, you were not doing anything illegal) you merely lose your job. You aren't in the hole for the liability.
Most of finance operates in that mode, dealing with OPM (other people's money).