Market-making giant Citadel Securities is rebuilding the tech that powers its trades as it eyes growth

• Ken Griffin's marketplace maker, Citadel Securities, is revamping its halfway trading infrastructure.
• The patient has reassessed its tech stack arsenic it eyes growth.
• Josh Woods and Jeff Maurone, tech executives astatine Citadel, talk really nan patient is rebuilding.

In 2023, Citadel Securities' main operating serviceman of technology, Jeff Maurone, met pinch elder leaders to talk nan year's exertion priorities. But what started arsenic a modular strategy gathering resulted successful a yearslong reevaluation and rebuild crossed nan marketplace maker's full exertion stack.

Maurone said nan gathering was a rallying outcry for simplicity and walked distant pinch an duty he positioned for illustration this: "Imagine if you were an airline," he said, "could you, connected 1 PowerPoint slide, show 10 to 15 systems that fresh together simply and together correspond nan only systems needed to get each nan measurement from trading a summons to delivering nan passenger."

Now nan marketplace shaper Ken Griffin founded is revamping its halfway trading infrastructure, which is nan postulation of systems and technologies that executes 1 successful each 4 equity trades successful nan US.

Over nan past twelvemonth aliases two, Maurone and Josh Woods, Citadel Securities' main exertion officer, person been strategizing to consolidate redundancies, mitigate operational complexities, and trim nan costs of trading and entering caller businesses. They're looking crossed nan full lifecycle of a waste and acquisition arsenic a blueprint for nan rebuild.

Since its inception successful 2002, Citadel Securities has utilized predictive analytics, data, and exertion to let buyers and sellers to waste and acquisition assets by providing marketplace liquidity. It uses algorithms to seizure profit from mini differences successful prices. In nan past 2 decades, nan marketplace shaper has expanded nan types of clients it useful with, nan products it trades, and nan exchanges wherever it trades.

The extremity is to hole nan patient for what lies up while delivering much resiliency and capabilities to clients today, Woods said.

"This is simply a measurement to, complete time, support your agility. I almost look astatine it arsenic nan stretching of business," Woods told Business Insider. "If you don't do these things, your exertion stack yet gets much rigid than you'd like, and past erstwhile you request to stretch, you're incapable to."

Building Citadel Securities' trading infrastructure of nan future

In nan past fewer years, Citadel Securities pushed into in installments trading, expanded its rates franchise, and introduced an organization options offering. It has scaled up its operations successful nan Asia-Pacific region and launched rates trading successful Europe, nan Middle East, and Africa; it is now progressive successful much than 50 markets crossed 150 venues. As it grew, it developed a immense patchwork of exertion solutions to meet its needs.

But arsenic Citadel Securities looks to proceed growing, it needs to position its exertion to easy break into caller markets, plus classes, and geographies. The patient intends to do that by re-architecting cardinal systems successful a standard, world way, Maurone said.

"Part of this is conscionable evolving nan exertion and being capable to return a measurement backmost pinch caller eyes and say, 'Well, now that we've built retired a batch of these offerings crossed each these different markets pinch truthful galore different types of counterparties, we conscionable person a overmuch bigger group of requirements that we're looking at,'" Woods said. "And truthful really do we look astatine each those and effort to find nan patterns and nan champion measurement of operating?"

Take nan diverseness successful exchanges, which alteration dramatically successful position of interest structures, operating hours, and clearing requirements. Instead of relying connected individual systems that cater to individual exchanges, nan patient hopes to accommodate its back-end systems to beryllium elastic capable to accommodate galore exchanges and onboard caller ones efficiently.

Asset types are different area wherever there's a batch of underlying variance, particularly successful position of information structures. And differences successful trading practices — from systematic to precocious touch — will require Citadel Securities to rethink those underlying systems.

Through respective progressive changes to its tech stack, Maurone said he hoped that successful 2025, nan patient would beryllium wholly trading successful a strategy that reflects its extremity to trim operational complexity and redundancies.

"A batch of times, it requires reorienting really we look astatine nan problem," Woods said. "Before, you couldn't really spot nan shape because you're only looking astatine 1 small portion of nan problem, but now that you spot it crossed each these different domains, it becomes clear that there's much we tin do."

How merchandise managers are bridging business and technology

Wall Street firms person agelong turned to consulting agencies, specified arsenic McKinsey aliases Deloitte, to shepherd tech execs and different C-suite leaders done a transformative process specified arsenic this. Instead, Citadel Securities has turned to an soul group of merchandise managers and main operating officers — immoderate of whom spent years moving astatine consulting firms — to oversee nan imagination and execution of its technology.

Building retired this soul muscle, Maurone said, has filled a request that an outer advisor ne'er really could. "We request to unrecorded and respire and ain nan strategy," he said, adding that overmuch of nan package is created in-house. "You request nan conflict scars and nan issues to style nan group who are building nan solution," he said.

Each business aliases usability has a COO backed by a squad and partners intimately pinch their business head. The cognition is overseen by nan firmwide COO, Matt Culek, who useful intimately pinch CEO Peng Zhao and nan firm's president, Jim Esposito, connected nan firm's astir challenging issues.

Maurone's squad supports Citadel Securities' exertion organization, and he manages a squad of 15 people. They group metrics, guarantee engineers meet their transportation goals, and merge customer feedback.

Maurone, nan first personification pinch a product-management inheritance hired wrong nan exertion statement astatine Citadel Securities, five years ago, has been slow building retired this squad of merchandise managers.

"Quite often, group successful Jeff's org are reasoning astir nan basal business problem we have," Woods said.

"They person a batch of effect and person connected aggregate occasions reshaped what we extremity up building, which is very different than what you'd get if personification was conscionable looking astatine nan requirements" and pursuing orders, he added.