Hudson River Trading (HRT) Case Study 2021: Explorations into the Firm's European Trading Operations, US Equity & Equity Option Strategies, Comparative Analysis

News provided by

Jul 15, 2021, 12:45 ET

DUBLIN, July 15, 2021 /PRNewswire/ -- The "2021 Case Study: The Rise of Hudson River Trading (HRT)" company profile has been added to ResearchAndMarkets.com's offering.

"The Rise of Hudson River Trading",the publisher adds another leading proprietary trading firm - and recent entrant to the $1 billion+ trading revenue club (2020e) - to its library focused on the most secretive and consequential players in the global markets ecosystem.

Notable highlights include:

The history of Sun Trading and the impacts of its acquisition by Hudson River Trading (HRT) in Q1 2018, and explorations into the firm's European trading operations;
US equity and equity option strategies;
Comparative analysis with select competitors, and;
Revenue estimation, among many other details.

As if on cue, and apropos of the times, a tweet by Joe Gawronski, President of Rosenblatt Securities states that December 24, 2020 marked the first time ever that off-exchange trading represented the majority of US equity volume (50.38%).

Rewinding from there to a Reuters article dated January 16, 2018 entitled "Hudson River Trading to buy rival HFT firm Sun Trading", HRT's co-founder and director, Jason Carroll, said in a statement, "This acquisition combines HRT's expertise in on-exchange trading with Sun's expertise in off-exchange trading creating a stronger, more diverse firm."

What happens between these two points in time is no accident. More than describing a theme that contributes to the disruption of the entire trading and asset management ecosystem, they are two milestones in the story that launches Hudson River Trading, LLC (HRT) into what the analyst estimates is a rarefied league of proprietary trading firms that exceeded $1 billion in revenue for 2020.

Until now, the analyst has been intensely focused on shedding light on the broadest, most consequential trading firms in the global markets ecosystem. This led to the the analyst's first-ever case studies on some of the most attention-grabbing names in the business. Legendary firms like Citadel Securities, Susquehanna International Group (SIG), Two Sigma and Jane Street are among the analyst's published works; a research library that is without peer.

These works were developed in parallel with a steady cadence of much shorter research excerpts published on the analyst's feed, thereby exposing a much more diverse roster of notable players in total; each of which - short or long, deep or cursory - serving like pieces in the evolving solution to a much larger and more complex puzzle.

It turns out that the legendary players to which the analyst has dedicated their initial focus and deeper analysis have been valuable for more than their ability to fascinate. They are the cornerstones of the latest market structure phenomena, and therefore, have an extraordinary influence on the topology of the landscape, not only for the spaces they occupy but for the spaces they leave behind. This is all perhaps an overly poetic way of introducing the nuts and bolts of the matter: There is a war being waged between what happens in the light and what happens in the dark.

With few exceptions, bulge-bracket broker-dealers have struggled to compete with the world's leading proprietary trading firms (all of which are registered broker dealers and often market makers, and whose ongoing financial success perpetuates a positive feedback loop that allows them to stay at the forefront of technical innovation and human capital attraction). Many hedge fund managers have struggled to adapt - much less, realize - that material component of the so-called alpha they once enjoyed as outsized performance is now being captured by those who stand much closer to the sources of liquidity.

Traditional asset managers, particularly those without a vibrant exchange-traded fund (ETF) franchise, also suffer from a lack of automation, speed, creativity, and adaptability. Solution vendors are plagued by a declining spicket of new prospects in a world that favors an incumbency of incumbents. And, last but certainly not least, the retail segment, particularly the subset of day traders, risk junkies and other thrill seekers, is largely entertained in the new, frictionless, and increasingly gamified environment. In short, the configuration at the center of listed markets - which, thanks to an historically-accommodative yield curve, is one of the only games in town - continues to cause tectonic shifts and existential risks throughout the entire global markets landscape.

At the base of all this, current market structure promotes a finite list of mainly speed-related arbitrage strategies, all of which reside within the analyst's structural alpha zone; the home of all hyperactive trading strategies. With the Robinhood-triggered move - en masse - in November 2019 by the entire retail brokerage industry to a zero-commission framework (and fueled, in part, by new, more transparent SEC Rule 606 disclosures), 2020 is the year when the value of captive order flow elevated the war between dark trading and lit trading to an unprecedented level of obviousness that is now observable by the naked eye.

Key Topics Covered:

Introduction
Data Sample
Glossary
Table of Contents
Table of Exhibits
Storyboard
History Lesson
European Risk
US Risk
US Equity Strategy
US Option Strategy
Comparative Analysis
Revenue Estimation Model
Conclusion
Next Steps
Appendix I - Vignettes
Cusips
Dashboard
Appendix II - Supplemental Exhibits
European Trading Entities
US Trading Entities
Appendix III - Landscape
Alpha Capacity Elasticity
Historical Perspective
Key Landscape Drivers
About the Publisher
The Analyst

Companies Mentioned

Citadel Securities
EOS Trading Ltd.
Global Electronic Trading Group (GETCO)
GTS Securities
HRT Execution Services, LLC
HRT Financial, LP (formerly, HRT Financial, LLC)
HRTEU Ltd. (Dublin)
Hudson River Trading Europe Ltd.
Hudson River Trading, LLC
IMC Financial Markets
Jane Street Group
Jump Trading
Knight Capital Group
Latour Trading
Old Mission Capital
Robinhood Markets, LLC
Sun Holdings, LLC
Sun Trading International Ltd.
Sun Trading, LLC
Susquehanna International Group (SIG)
Tower Research Capital
Two Sigma Investments
Two Sigma Securities
Virtu Financial

For more information about this company profile visit https://www.researchandmarkets.com/r/uisuya

Media Contact:

Research and Markets
Laura Wood, Senior Manager
[email protected]

For E.S.T Office Hours Call +1-917-300-0470
For U.S./CAN Toll Free Call +1-800-526-8630
For GMT Office Hours Call +353-1-416-8900

U.S. Fax: 646-607-1904
Fax (outside U.S.): +353-1-481-1716

SOURCE Research and Markets