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The Rise of Hudson River Trading (HRT) Case Study

·5-min read

Dublin, July 14, 2021 (GLOBE NEWSWIRE) -- The "2021 Case Study: The Rise of Hudson River Trading (HRT)" company profile has been added to'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:

  1. Introduction

  2. Data Sample

  3. Glossary

  4. Table of Contents

  5. Table of Exhibits

  6. Storyboard

  7. History Lesson

  8. European Risk

  9. US Risk

  10. US Equity Strategy

  11. US Option Strategy

  12. Comparative Analysis

  13. Revenue Estimation Model

  14. Conclusion

  15. Next Steps

  16. Appendix I - Vignettes

  17. Cusips

  18. Dashboard

  19. Appendix II - Supplemental Exhibits

  20. European Trading Entities

  21. US Trading Entities

  22. Appendix III - Landscape

  23. Alpha Capacity Elasticity

  24. Historical Perspective

  25. Key Landscape Drivers

  26. About the Publisher

  27. 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

CONTACT: CONTACT: Laura Wood, Senior Press Manager 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

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