The Poker Aces Playing A Primal Paw Inward The $5 Trillion Etf Market

We've mentioned Susquehanna a few times over the years, unremarkably inwards connection with their options as well as other derivatives business. They convey access to the information as well as information flows that most houses dream of having, as well as transform the information menses into cash flow.

From Bloomberg, Nov 20:

Harnessing poker prowess as well as game theory, Susquehanna International has acquire a telephone commutation ETF player.

On City Avenue in the Philadelphia suburb of Bala Cynwyd, Pa., across the street from a TGI Fridays as well as California Pizza Kitchen, sits a bland edifice that looks similar whatsoever other corporate office. The exclusively notable characteristic is inwards the parking lot: a large oak labeled a “significant tree” because it survived the American Revolution.

And withal inside that ho-hum gray-brown edifice, away from the trading hubs of New York as well as Chicago, sits a crucial engine of the $5 trillion global exchange-traded fund market, i increasingly relied upon past times investors ranging from hedge funds to individuals. What’s more, the little-known billionaires behind the functioning convey groomed a generation of canny marketplace experts.

Like its headquarters, Susquehanna International Group LLP is hidden inwards apparently sight. It keeps a depression profile fifty-fifty though its fingerprints are everywhere inwards fiscal markets. In improver to ranking with the largest U.S. traders of ETFs, it’s a giant inwards options trading as well as has plowed into sports betting, private equity, as well as fifty-fifty Bitcoin.

Susquehanna, every bit good every bit other under-the-radar, closely held competitors created past times its alumni, such every bit Jane Street Group LLC, grease the wheels of the ETF market, keeping the instruments cheap as well as slowly to trade. As better-known Wall Street companies such every bit Goldman Sachs Group Inc. convey stepped back from performing this component division inwards recent years, regulators convey started cry for to a greater extent than questions nigh the stability of the market, which has acquire theme on Susquehanna as well as its brethren.

Susquehanna built its empire on poker. All half dozen co-founders met inwards the belatedly 1970s at the State University of New York at Binghamton, where they gathered to play cards earlier advancing to Las Vegas casinos. One of the six, Jeff Yass, had the insight that carte skills could transfer to Wall Street. That bloomed into Susquehanna’s philosophy that poker provides the best grooming for the type of probability-­based decisions inwards uncertain circumstances that are needed inwards markets.

Yass proved to live a preternatural trading talent. He was inwards his 20s when Izzy Englander, instantly original executive officeholder as well as founder of Millennium Management, i of the world’s largest hedge funds, sponsored him for a topographic point on the flooring of the Philadelphia Stock Exchange.

Yass persuaded his v college buddies to bring together him inwards Philadelphia. With Steve Bloom, Eric Brooks, Arthur Dantchik, Andrew Frost, as well as Joel Greenberg, he founded a theater inwards May 1987 to deploy their poker skills inwards the options markets. They named it after the 444-mile river that runs from close their alma mater inwards upstate New York through Pennsylvania, the habitation of their novel venture.

“My friends as well as I took poker real seriously,” Yass said inwards an interview inwards the mass The New Market Wizards: Conversations With America’s Top Traders past times Jack Schwager, published inwards 1992. “We knew that over the long run it wasn’t a game of luck, but rather a game of enormous science as well as complexity. We took a mathematical approach.”

Neither Yass nor his co-founders would comment for this story, according to Dave Pollard, Susquehanna’s caput of strategic planning as well as special counsel. The next delineate of piece of job concern human relationship is based on interviews with electrical current as well as old employees as well as people familiar with the firm.

Regulators convey started taking a greater involvement inwards the exercise that firms such every bit Susquehanna play inwards the market

Five months after Susquehanna was founded, the U.S. stock marketplace crashed, with the Dow Jones Industrial Average suffering its largest always one-day per centum decline. Susquehanna non exclusively survived, but thrived. By Oct 1988 the theater had 100 employees, as well as it had brought inwards nigh $30 1000000 inwards its starting fourth dimension year, compared with $43 1000000 earned past times PaineWebber & Co., which had nigh 12,900 employees, according to a Washington Post story at the time.

Today, including those who move at its Pennsylvania headquarters, Susquehanna has nigh 2,000 employees inwards half dozen other offices inwards the U.S., v inwards the Asia-Pacific region, as well as 2 inwards Europe. Options as well as ETF trading are the pillars of its business. It trades nigh vii percent of U.S. ETF mass as well as to a greater extent than than $1.5 trillion inwards ETFs globally on an annual basis, according to a individual familiar with the firm’s trading activity. In U.S.-listed options, Susquehanna handles nigh a quarter of full trades, the individual said.

By all accounts, Yass is a workaholic. Legend has it that he’s been seen inwards a robe as well as slippers heading into the business office to topographic point on a trade. In contrast to hedge fund stars such every bit Citadel’s Ken Griffin or Bridgewater Associates’ Ray Dalio, the balding, bespectacled Yass isn’t widely recognized. He tin shipping away live seen only about the business office inwards sneakers as well as jeans. He stays out of the headlines, other than occasional appearances with tiptop donors to political candidates, peculiarly those with a libertarian bent.

Susquehanna’s recruits, the bulk of them conduct from undergraduate programs, undergo rigorous grooming at poker tables, where they have feedback on their strategy. Employees larn a specific approach to risk-taking. Traders who brand losing bets for the correct reasons are favored over those who acquire lucky betting against the odds.

The firm’s website touts its “entrepreneurial mindset,” gamer blog, as well as day-in-the-life portraits of a software developer as well as a quantitative researcher—more similar a tech startup than a fiscal giant. Its Facebook page chronicles outings to baseball game games as well as its no-limit Texas Hold ’em annual poker tournament.

“The basic concept that applies to both poker as well as selection trading is that the primary object is non winning the most hands, but rather maximizing your gains,” Yass told Schwager inwards The New Market Wizards....

...MUCH MORE

Way dorsum inwards 2009 Paul Kedrosky wrote at the instantly 404'd Infectious Greed:

Stop whatever it is you're pretending to create as well as read this corking novel article on Susquehanna International. 

So nosotros did:
Options: "Beating the Odds - Susquehanna International - Jeff Yass"

And from a November 22, 2010 post on First Solar with the stock at $122:

Following upward on yesterday's "First Solar Gets Some Love from Susquehanna, Price Target $180 (FSLR)"
The stock was showing a chip of forcefulness inwards after-hours trade, finishing upward some other 50 cents to $127.25, on tiptop of Friday's $3.11 gain.
As nosotros said inwards Friday's post:

I don't convey much information on the analyst's skill, this is an initiation after all but the comments convey a squeamish new-age experience to them.
Maybe nosotros tin shipping away all acquire together on the colina to lookout adult man the Sun come upward up Mon morning.

On a to a greater extent than serious notation Susquehanna's rear company, Susquehanna International Group is in all likelihood the largest privately held options trading theater inwards the globe as well as the timing rather than the verbiage may live what's of import here.*

Influenza A virus subtype H5N1 brace months later, on Feb 7, 2011 FSLR top-ticked at $166, a cost it has non gotten closed to inwards the next 93 months.
Proceed at your ain risk, your milage may vary, closed encompass earlier nail etc.