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Next up in our introduction to the distinguished nominees for Leaders in Trading 2023 Editors’ Choice Awards, we bring you the shortlist for Outstanding Non-Bank Electronic Liquidity Provider, showcasing excellence in liquidity provision outside of the traditional sphere.
Over the last year, the liquidity landscape has continued to develop, with players continually innovating their offerings and growing their teams to better meet client needs.
Among the key players in this competitive landscape, The TRADE has selected Citadel Securities, Optiver, Virtu Financial, and XTX Markets for the 2023 shortlist, following various individual achievements by these businesses over the past year.
Citadel Securities
Needing little introduction, Citadel Securities, is one of the largest market makers in US Treasuries and USD interest rate swaps globally, and serves an extensive list of financial institutions, including: banks, asset managers, pension funds, hedge funds, central banks, and sovereign wealth fund. Its focus is to provide investors with the liquidity needed to trade equity and fixed-income products in any market condition.
Over the summer, Citadel Securities entered into the credit sphere amidst technological advancements, offering US investment-grade bond trading to clients as of June. Speaking at the time, head of fixed income ETF trading, Bob Cariste, highlighted that the initial focus for the business was on investment-grade (credit) due to the fact that that is where the greatest overlap exists with Citadel’s existing fixed income business.
The firm is active across more than 55 markets, with $440 billion in trades executed per day. Last August, the business opened its Tokyo office, continuing its global expansion in the region – offering US fixed income products to Japanese institutional investors. The firm’s growing global footprint now includes 15 offices across North America, Europe, and Asia Pacific.
Optiver
Optiver has gone from strength to strength in recent years, developing a unique European cash-equity franchise thanks to its expertise in options and ETF market making. Over the last 12 months, the business has grown its client roster, establishing cash-equity trading relationships with various entities including: asset managers, sovereign wealth funds and private banks. Optiver’s approach is to give institutional asset managers access to liquidity from its central risk book.
Optiver’s net trading income in 2022 saw a 42% year-on-year increase, with a total equity of €3.6 billion compared to € 2.8 billion the previous year. Optiver’s market structure team actively monitors developments among exchanges, custodians, industry groups, and policy makers in order to formulate the business’ stances. The firm also regularly publishes whitepapers and shares insights on market structure and regulation, recently sharing insights around: T+1, IFR/D, key options considerations, EU and US policy, and venue functions.
In March, Optiver was the lead investor in the equity funding round for the launch of the MEMX Options exchange. As part of its commitment, the business confirmed it would assume a MEMX board seat, as well as chairmanship of a newly-created Options Market Structure Committee. In September, the electronic market maker selected Philippe Rizzo to join its institutional sales team, with his role focused on cash equity sales in France, Belgium, Luxembourg and Switzerland. Rizzo joined from Instinet, where he previously served as a global equity sales trader. The same month, Optiver took a further step in its US expansion plans with the opening of a new Chicago office, an increase of over one-third from the firm’s previous footprint in the city.
Virtu Financial
Global market maker Virtu Financial has had a stellar performance over the last 12 months with a high number of business updates across various areas as it enhanced its offering aimed at creating more efficient global markets. Virtu’s product suite includes offerings in execution, liquidity sourcing, analytics and broker- neutral, multi-dealer platforms in workflow technology. It operates across Asia Pacific, Canada, EMEA, and the US.
In August, Virtu entered into a strategic alliance with InvestorLink to integrate order management and AI-based matching platform with Virtu’s infrastructure to offer retail investors better access to the primary markets. In June, Virtu upgraded its POSIT Alert block trading capabilities to include automated dark liquidity seeking in a bid to tackle fragmentation in the non-displayed markets. Named Alert+, the solution aims to give traders an increased opportunity to execute any residual and reduce execution risk by sourcing incremental dark liquidity and completing orders more quickly. The upgraded workflow solution allows users to immediately elect to route residual share quantities not filled on POSIT Alert to be executed in the dark via Virtu’s Covert algorithm.
Back in April, the business’ Triton execution management system (EMS), Triton Valor, was integrated with the bookbuilding platform offered by equity markets technology solution, Appital. Named Appital Turquoise BookBuilder, the solution is an algorithmic bookbuilding platform which brings a typically manual and opaque process into an automated, electronic offering. More recently, in September, Triton Valor was integrated by Sumitomo Mitsui Trust AM. Triton Valor supports trading across: Munis, MBSs, global corporate and sovereign bonds, fixed income ETFs, EM debt, futures and CMOs, aiming to allow users to utilise a single dashboard across asset classes. Last March, Virtu added Liquidnet alumnus Leon Mouzourakis to its execution services team in an electronic trading role.
XTX Markets
London-based algorithmic market maker XTX Markets continues to impress as its operations develop. The business partners with counterparties, exchanges and e-trading venues globally and provides liquidity in the equity, foreign exchange, fixed income and commodity markets. XTX Markets’ clients range from regional banks to institutional investors – including macro, systematic funds and real money. The business hit record profits of £1.095 billion from its UK entities in 2022, up 64% from the previous year.
Following solid results, the business continues to be at the forefront of making financial markets more efficient for all participants. Its focus is on reducing the cost of trading for clients through its analytical tools and data-driven insights. The quantitative trading firm opened its new office in New York earlier this year, and also has bases in London, Mumbai, Paris, Singapore, and Yerevan.
The team is made up of more than 200 people across the globe, speaking 26 languages. Last October, XTX Markets appointed Zar Amrolia as chair, replacing Niki Beattie who held the position for five years. Amrolia’s appointment came as part of XTX Markets’ leadership transition. The business is focused on growing its equities franchise in the US going forward. In March, XTX Markets appointed Credit Suisse alumnus Charlie Whitlock as head of Americas distribution, leveraging his 25 years of experience in financial markets. Based in XTX’s New York office, Whitlock is responsible for growing XTX’s single dealer platform business in the US.
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