The TRADE is delighted to announce the shortlisted nominees for the 2022 Editors’ Choice Outstanding Alternative Liquidity Provider Award. Shortlisted this year are Citadel Securities, Flow Traders, Hudson River Trading, Jane Street and XTX Markets. Learn more about what they’ve been up to below.
Market-making giant Citadel Securities needs no introduction. It provides liquidity to the market across equities, options, and fixed income, currencies and commodities (FICC). A behemoth of a firm, its automated equities platform trades over 20% of US equities volume. It also executes around 35% of all US-listed retail volume. It claims to be the top liquidity provider on major US options exchanges, representing 99% of traded volume. Citadel Securities has a global presence across 15 offices, with its most recent one opened in Tokyo in august. As part of the launch the firm will offer US fixed income services in Japan for the first time.
It has demonstrated ongoing commitment to alternative sources of liquidity through its Immediate-or-Cancel order (IOC) platform, Citadel Connect, a service which it claims is key as managing risk via off-exchange trading becomes more and more important. As one of the fastest growing sources of off-exchange liquidity in the US equities market the platform provides Citadel Securities’ principal liquidity across 8,000 exchange-listed securities. It has also made several strategic investments in the last year including contributing to a $50 million funding round in institutional credit network, Hidden Road Partners in July.
Launched in 2004, Flow Traders has been providing liquidity in Exchange Traded Products (ETPs) in Europe for nearly two decades. The firm leverages a global presence with eight offices worldwide. It expanded into foreign exchange (FX) and crypto in 2017 and spot precious metals trading in 2021.
The last year has seen significant development by the market maker, proving itself dedicated to investment both internally and externally to support the development of the market. In 2022, this progress has not stopped, boasting the title of the leading liquidity provider for ETFs on and off exchange in EMEA in its second quarter results.
The firm launched single bond market making in corporate credit and emerging markets sovereigns and its single dealer platform at the end of 2021. Within the same period, it became the first market maker to act as a name disclosed liquidity provider for US high yield corporate, Euro-denominated investment grade and high yield, and emerging market sovereign bonds, as well as contribute streaming prices for US high yield corporate bonds, on MarketAxess’ platform. It also joined forces with Neptune Networks to distribute axes on investment grade and high yield corporate credit, and emerging markets sovereign bonds. Earlier this year, it connected its platform with anonymous credit trading pool, Bloomberg Bridge.
Since its expansion into digital assets, Flow Traders has made several strategic moves and investments to support the development of the crypto and DeFi space, not least with its agreeing to contribute data to the Decentralised Finance (DeFi) data network, Pyth, and its joining TP ICAP’s digital assets platform as a market maker. It also made investments in institutional digital asset platform, Elwood Technologies, crypto start up Sei Labs and institutional DeFi platform, Ondo Finance.
Hudson River Trading
Armed with maths and computer science degrees, the founders of Hudson River Trading launched algorithmically focused equities trading firm, Hudson River Trading, in 2002. It has since growing into a multi-asset business spanning across the globe. The firm operates a single dealer platform that provides access to its principal liquidity in equities and exchange traded funds and US Treasuries.
It has made several strategic investments and development partnerships within the crypto and Decentralised Finance space in a bid to help its development. These include crypto liquidity protocol, Algofi, Bitcoin and crypto SMA platform, Eaglebrook Advisors, crypto exchange FTX, the Pyth Network, crypto information services provider, The Tie, and DeFi platform, Vertex Protocol. It also supports challenger venue to the incumbent US stock exchanges, MIAX.
Hudson River Trading also agreed to become a market maker on TP ICAP’s Digital Assets Spot platform in March ahead of its launch that is expected later this year. “As an active participant in the crypto markets since 2017, we have witnessed a number of major milestones that have helped pave the way for greater institutional adoption of crypto,” said Brad Vopni, head of Digital Assets at Hudson River Trading. “Together, we will provide a new set of investors with the ability to gain access to this rapidly evolving asset class on a familiar institutional-grade platform.”
Quantitative trading firm Jane Street began with domestic and international ETFs. It now prices and trades more than 5,000 ETFs globally and offers liquidity across equities, bonds, and options.
In 2014, Jane Street moved into equites with the launch of JX, its US single dealer platform. The market maker extended into digital assets in 2017, now offering crypto trading around the clock globally. Also in 2017, the market maker launched its EU and UK single dealer platform, JX-EU, which streams liquidity to trading firms in Europe for equities. Its offering was expanded further with the launch of a digital assets single dealer platform launched in 2018, JCX, and its wholesale market making service for US equities launched in 2019 which trades directly with the largest retail brokerages.
It claims to have traded more than $300 billion with clients in the fixed income markets throughout the course of last year, pricing more than 16,000 bonds on all the major electronic platforms and over the counter (OTC).
Looking outwards, Jane Street has played an instrumental role in several market initiatives in recent years in a bid to address issues with market structure including the launch of member-owned challenger US equites exchange, Members Exchange (MEMX), which it joined the board of investors of in 2020. More recently, the firm joined the Pyth network as a data contributor and became a market maker on TP ICAP’s Digital Asset Spot platform at the end of last year.
London-based algorithmic trading firm XTX markets was founded in 2015 and offers liquidity across equities, FX, fixed income and the commodities markets.
Despite being a fairly new player in the market, the firm has clawed its way to the top of the league tables, achieving a top three liquidity provider ranking for electronic spot and forwards for seven years in a row and according to a survey by Euromoney, this year it became the largest emerging market FX provider. With offices across New York, Mumbai, Paris and Singapore, it handles $295 billion in daily trading volumes across asset classes.
XTX had its strongest year yet in 2021, taking home £667 million in net profits for the year up from £470 million, according to figures published by the Financial Times.
In April, Hans Buehler was appointed as deputy chief executive officer of the firm, effective from July after spending the last 14 years at JP Morgan across various roles including as global head of equities data analytics, automation and optimisation, as well as global head of equities and securities services quantitative research at the investment bank.