A presentation on the Hudson River Trading company by Matt Peretick.

1. Hudson River Trading
Matt Peretick
[mattjp]

2. History
･ Jason Carroll, Suhas Daftuar, Alex Morocs
[2000]
･ First algorithm deployed [2002]
･ International [2009]

3. Products
· Money
· 5% of all US stock trading
· High Frequency Trading [HFT]

4. Financial Info
• Private company [so secretive]
• Competitor of same size made ~$790M [2015]
• 135k base salary [NYC]

5. Business Model
· “Market-Makers”
· Sell slightly below ask, buy slightly above bid
· Capitalize on fluctuation [statistical arbitrage]
With HFTs
Without HFTs

6. Secret Sauce
· Don’t close flat - hold onto ~25% of capital
· Long holding time - 5 min
· Culture, culture, culture

7. Competition
· No one will share technical details so…
Company Proprietary
Trader
Founder Employs
Traders
Profit
Estimate
HRT Yes CS/math
majors
No ?
Virtu
Financial No
Owner of
Florida
Panthers
Yes $796M
Jump
Trading ? Trader ?
“Billions” -
Bloomberg
Citadel
No
Hedge fund
manager
Yes
? – $25B
AUM

8. Success or Failure
· $uccess!
· AI / Machine Learning
· Potentially disruptive competitor

9. 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