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The Chicago Trading Company with Appendix on European Trading

In this updated 75-page, 77-exhibit chart book, “The Chicago Trading Company with Appendix on European Trading,” Alphacution continues its focus on the explosion of activity in US option markets with a deep dive into another leading option trading firm, CTC, LLC.  In this report, Alphacution leverages evolving modeling capabilities to explore its first example of a proprietary trading firm with core concentration in index options along with the peripheral suite of cash, futures and other option products used to capture...
By Paul Rowady | April 27, 2022 | Premium
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The Chicago Trading Company

In this 71-page, 69-exhibit chart book, “The Chicago Trading Company,” Alphacution continues its focus on the explosion of activity in US option markets with a deep dive into another leading option trading firm, CTC, LLC.  In this report, Alphacution leverages evolving modeling capabilities to explore its first example of a proprietary trading firm with core concentration in index options along with the peripheral suite of cash, futures and other option products used to capture volatility arbitrage opportunities. Furthermore, this research...
By Paul Rowady | March 31, 2022 | Premium
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Simplex Trading, Unadjusted

In this 67-page, 64-exhibit chart book, “Simplex Trading, Unadjusted,” Alphacution borrows the spotlight from the record-setting volumes in the US options market for 2021 and focuses it in on one of the key - yet, relatively little known - players in the space, option market maker, Simplex Trading, LLC. Taking some of its recent modeling upgrades for an initial spin, Alphacution performs its unique brand of visual display on regulatory data to present what is likely to be an unprecedented...
By Paul Rowady | December 31, 2021 | Premium
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The Robinhood Effect

In this 198-page, 273-exhibit, 33,000-word case study, “The Robinhood Effect,” Alphacution brings together data and modeling from 25 entities - 11 retail brokers and 14 wholesale market makers - to explain a new phenomenon that now lives at the center of the US capital markets ecosystem. Alphacution's most ambitious research project to date, this report covers the governing liquidity economics framework that defines PFOF rates, the mechanics of Robinhood's aggressive retail brokerage model, the transformation of the retail brokerage industry,...
By Paul Rowady | July 29, 2021 | Premium
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Payment For Order Flow 2020, Part III: The Retail Flow Factor

In this 17-page, 21-exhibit presentation - Part III of Alphacution's case study on payment for order flow (PFOF) - we present our preliminary development of the "retail flow factor" for 2020 based largely on a reconciliation of 606 data (from 10 retail brokers / 11 entities) and 605 data (from 7 wholesale market makers). The results include estimated monthly penetration of retail order flow relative to the full U.S. cash equities market for 2020 - including estimated breakdowns of odd...
By Paul Rowady | June 3, 2021 | Premium
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Payment For Order Flow 2020, Part II: Broker Personas

In Part I of Alphacution’s case study on payment for order flow (PFOF), we focused mainly on the rates paid by wholesale market makers to retail brokers under a full range of securities categories and order type scenarios. In this 22-page, 20-exhibit deck, Alphacution presents PART II of its upcoming comprehensive case study, The Robinhood Effect, with a focus on a concept called broker personas. Alphacution’s working hypothesis on this topic is that each retail broker – in fact, all...
By Paul Rowady | May 14, 2021 | Premium
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Payment For Order Flow 2020, Part I: Rate Heatmaps

2020 will be remembered for many reasons. In the context of Alphacution’s ongoing research focus, we want to remember 2020 as the first full year of enhanced transparency into the mechanics and impacts of the long-held practice of payment for order flow (PFOF). It turns out, enhanced use of PFOF as the linchpin in a new zero-commission brokerage framework for retail investors (pioneered by Robinhood) sets a series of dominoes in motion that ultimately influence, to some degree, all stakeholders...
By Paul Rowady | April 27, 2021 | Premium
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Rise of Hudson River Trading

In this 91-page, 102-exhibit case study, “The Rise of Hudson River Trading,” Alphacution adds another leading proprietary trading firm - and recent entrant to the $1 billion+ trading revenue club (2020e) - to its library focused on the most secretive and consequential players in the global markets ecosystem. Notable highlights include the history of Sun Trading and the impacts of its acquisition by Hudson River Trading (HRT) in Q1 2018, and explorations into the firm's European trading operations, US equity...
By Paul Rowady | January 23, 2021 | Premium
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History of Jane Street

In this 125-page, 149-exhibit, 26,000-word case study, “History of Jane Street,” Alphacution sets a new bar for the scope of a case study focused one of the leading proprietary trading and market making firms in the world, with notable expansions relative to prior cases studies into regional, US option strategy, revenue estimation, and comparative analysis details (including Citadel Securities, Susquehanna International Group (SIG) and affiliates, and Two Sigma Investments and affiliates). The complete case study is available to premium subscribers...
By Paul Rowady | May 27, 2020 | Premium
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Two Sigma Investments, LP and Affiliates

In this 51-page, 61-exhibit case study on one of the most successful quantitative trading firms launched since the dawn of the 21st century – Two Sigma Investments, LP – Alphacution presents the next in its series of unprecedented reports based on its modeling of many of the most mythological players and impactful themes operating within the current global asset management ecosystem. Of particular note, this report includes a groundbreaking comparative analysis of key strategy parameters between Two Sigma and D....
By Paul Rowady | November 23, 2019 | Premium
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