https://www.chicagobusiness.com/fin...securities-reaps-record-67-billion-volatility ====== The surge came after some of its traders decamped from Chicago and New York to set up shop in a Palm Beach hotel in late March as the pandemic upended lives and markets across the globe. Bloomberg Ken Griffin (Bloomberg)—set up shop in a Palm Beach hotel in late March as the pandemic upended lives and markets across the globe. The figures for the closely held firm are being disclosed to investors as part of a $2.5 billion loan Citadel Securities is seeking, with proceeds going to refinance debt and bolster trading capital. A representative of Chicago-based Citadel Securities declined to comment. The company’s success comes in a year that was defined by economic pain and despair for many, but will go down as one of the most lucrative environments in Wall Street history. Traders across investment banks profited from volatility sparked by the pandemic and an explosion in stock-market speculation by people cooped up at home on apps such as Robinhood Markets. Citadel Securities’ results also highlight how buttressed it is as a pure trading firm from the health catastrophe, which forced the biggest investment banks to set aside billions to cover future soured loans. Citadel Securities brought in $1 billion of earnings before interest, taxes, depreciation and amortization last quarter and $4.1 billion for the year, also a record. The firm, which is 85% owned by Griffin according to the Bloomberg Billionaires Index, also paid out $1.9 billion in equity distributions last year. Griffin has a net worth of $21.4 billion, according to the ranking, making him the 28th-richest person in the U.S. “2020 was certainly a record year in terms of equity volumes,” said Bloomberg Intelligence analyst Larry Tabb, noting that U.S. equity volume was up 44% in December compared with January, with options volumes up 53% in the same period. “We haven’t seen anywhere near this going back to probably 2009.” Citadel Securities estimates that it commands 27% of equity volume market share in the U.S., according to the presentation, up from 21% in 2017. It’s particularly dominant in retail order flow, with 46% of the market. The firm’s balance sheet has swelled along with its profits. At the end of the third quarter it had assets of $84.2 billion, a 61% increase from the end of 2019, while its equity capital was up 37% in the same period. Trading operations across Wall Street benefited from last year’s rally as stocks rebounded from their first-quarter plunge. Goldman Sachs Group Inc. reported this week that its equity traders increased revenue 40% in the fourth quarter, helping the firm double its annual profit, while JPMorgan Chase & Co.’s fourth quarter was its most profitable ever as its traders hauled in $5.9 billion. Rival market-making firm Virtu Financial Inc. has yet to report fourth-quarter results but was on track to beat its previous revenue highs. Griffin’s separate hedge fund business also had a strong year, returning 24% in its flagship Wellington fund. ======
Wow, just wow... Where is the competition in retail order flow buying? They make tons of money with virtually no risk...
Once again...volatility is the key to record profits. In fact, more record profits when its a black swan event for everyone else doesn't understand volatility nor prepare to take advantage of a black swan event. wrbtrader
Citadel probably bought the competition, hired best people from those that couldn’t be bought, then destroyed others. Just like many tech (and maybe non-tech) companies do.
%% Looks like VIRT had a great year also. Ken most likely , like the idea of lower FLA taxes also. Miami Herald noted that hotel was closed to the public, but that was a APR,2020 dated newspaper. Its a wonder Ken did not move down there sooner, being a FLA native.................................
Actually i think its probably because it was easier to entice an entire company of people to move away from their homes and families to an area that was warm and where there was a resort attached to entertain themselves within their social bubble which would solely consist of their work colleagues. In the middle of a scary pandemic no less.
not necessarily volatility but volume. they are toll collectors. which is why nyse specialists, dpms, top step pit traders did well... buy the bid/sell the offer. eurodollar pit was huge and they never moved
%% I guessed that move was not temporary. Its not temporary; MSFT + Ken+ VIRT are expanding in FLA. People vote with thier feet from high taxes in NY,CA. Most likely, Ken keeps his NY realty/but that's not a prediction. WARMer climate + a much warmer business climate may help FLA\hurt NY\CA.
the Robinhood crowd is fighting with master Ken in his Citadel (I read Robinhood routes their orders to Citadel to receive a few pennies in return).