发信人: pxu (又呱噪又抠门还偷老婆钱), 信区: Quant
标 题: HRT might buy Sun Trading
发信站: BBS 未名空间站 (Fri Sep 22 15:54:30 2017, 美东)
Trading firm consolidation may ultimately favor New York businesses over
Chicago's pioneers, according to one longtime industry consultant.
In the latest possible merger, New York-based Hudson River Trading is
reportedly bidding for Chicago-based Sun Trading. Both firms are private;
neither returned calls seeking comment.
Firms in Chicago were some of the first to employ high-speed trading
strategies to capitalize on pricing discrepancies in the markets. But with
volatility in the markets drying up in recent years and spreads tightening,
the local players may start to be at a disadvantage, according to Larry Tabb
, founder of industry consultant Tabb Group. Future trading profits may
favor those firms that are closer—both geographically and in their
relationships—to the banks that place initial trades.
"The problem with Chicago is that while it was on the forefront of the
proprietary trading groups, most of those guys, like many of the Chicago
businesses, are trading out of their own capital," said Tabb, who works in
New York and Westborough, Mass. "It's not client money. It's their own money
, and if they want to expand into the client business, the client business
is New York-based, and that becomes harder to do in Chicago."
Chicago firms are often referred to as proprietary trading firms or "prop
shops" because they trade using only their own money, or with capital from
private-equity firms that bought stakes in the firms, not on behalf of
clients. Like other high-speed firms, they dart into and out of trades in
stocks, derivatives and options through buy and sell orders all day.
Chicago traders emerged from the city's options and futures trading pits in
the 1990s to fund their own electronic trading firms. The biggest, including
DRW Trading and Jump Trading, have grown to outfits with hundreds of
employees, but there are also a slew of other mid-sized and smaller firms.
Now that the industry has been on the ropes in recent years, with market
volatility disappearing just as technology and regulatory costs were rising,
it's been tougher for the smaller and mid-sized firms to keep up their
TRYING TO ADAPT
Many have tried to adapt by adding trading in more asset classes or by
making acquisitions, but it's been difficult, given competition from the
Sun Trading tried to expand beyond its expertise in the trading of stocks to
add trading in other financial markets. To that end, it made its own
acquisitions, buying Toro Trading in 2013 and Endeavor Trading a year
earlier, after trying to expand on its own into options trading and then
It's also tried working under a new management team in the past couple years
. Bernie Dan left as CEO in 2015, followed by some of his colleagues, such
as Chief Financial Officer Chris Malo, and there have been more departures
since then, including the exit of Sam Mehta as chief operating officer last
year. Kevin Cuttica followed Dan as CEO of Sun Trading.
The industry has been scouring for profits as industry revenue dropped from
$7.2 billion in 2009 to under $1 billion so far this year. As trades make
their way through exchanges, dark pools and other hands, profits are
extracted along the way, meaning market participants further down the chain
collect less money.
Still, Chicago players can't be counted out. They've been participating in
earlier rounds of the consolidation, with DRW purchasing Austin-based RGM
Advisors in August and Chicago-based Chopper Trading in 2015. Also, Chicago-
based DV Trading picked up parts of Chicago-based Eldorado Trading earlier
The successful bidder for a shrunken Sun Trading may point the way of future
gains in the industry.
The Wall Street Journal reported Hudson's interest in Sun Trading earlier.
※ 修改:·pxu 於 Oct 2 16:38:32 2017 修改本文·[FROM: 204.]
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