Hudson River Trading

HudsonRiverTrading

MattPeretick[mattjp]

History

･ JasonCarroll,Suhas Daftuar,AlexMorocs[2000]･ Firstalgorithmdeployed[2002]･ International[2009]

Products

·Money· 5%ofallUSstocktrading· HighFrequencyTrading[HFT]

FinancialInfo

• Privatecompany[sosecretive]• Competitorofsamesizemade~$790M[2015]• 135kbasesalary[NYC]

BusinessModel

· “Market-Makers”· Sellslightlybelowask,buyslightlyabovebid

· Capitalizeonfluctuation[statisticalarbitrage]

WithHFTsWithoutHFTs

SecretSauce

· Don’tcloseflat - holdonto~25%ofcapital· Longholding time- 5min· Culture,culture,culture

Competition

· Noonewillsharetechnicaldetailsso…Company Proprietary

TraderFounder Employs

TradersProfitEstimate

HRT Yes CS/mathmajors No ?

VirtuFinancial No

OwnerofFloridaPanthers

Yes $796M

JumpTrading ? Trader ? “Billions”-

Bloomberg

CitadelNo Hedgefund

manager Yes ?– $25BAUM

SuccessorFailure

· $uccess!· AI/MachineLearning· Potentiallydisruptivecompetitor

References• http://blogs.wsj.com/moneybeat/2014/10/15/inside-hudson-

river-the-firm-that-does-5-of-all-stock-trading/• http://www.forbes.com/sites/billconerly/2014/04/14/high-

frequency-trading-explained-simply/#4d915f17ddad• https://en.wikipedia.org/wiki/High-frequency_trading• http://www.hudson-trading.com/about/• https://www.bloomberg.com/news/articles/2014-07-23/don-

t-tell-anybody-about-this-story-on-hft-power-jump-trading• http://www.investopedia.com/articles/active-

trading/092114/strategies-and-secrets-high-frequency-trading-hft-firms.asp