Anatomy of a Zero-Sum Game
At the end of the day, how much risk is actually in US equity options? Alphacution distills and presents some never-seen-before numbers from an unprecedented era of this zero-sum game...
Susquehanna Securities and the Hidden Arbitrage Strategy – Part III
In this Part III, Alphacution concludes its multi-part analysis of Susquehanna Securities' so-called "arbitrage strategy" by sharing some revealing - if not, conclusive - comparisons...
The Transformation of GTS – Part II
On the 1-year anniversary of what would turn out to be Part I of this thread, Alphacution adds new details to the story of New York-based prop trading firm GTS Securities and its emerging adventures in option market making...
Cutler Group Options: Where Small (Share) Is Big (Revenue)
Alphacution leverages rarely disclosed data - in this case, from option market maker, Cutler Group, LP - to estimate the revenue potential of an option market share point...
Cutler Group’s Book: Hiding in Plain Sight
“For last year’s words belong to last year’s language, and next year’s words await another voice.”T. S. Eliot As we were riffing along with our recent Feed post on HAP Trading, I would've sworn than I had already shared a few words on another unique player from the option market making corner of the world, San Francisco-based Cutler Group, LP. Turns out, I had not... With the upcoming publication of a deep-dive case study on Hudson River Trading imminent, Alphacution is going to spend much of the first part of 2021 in option land, cranking out its first multi-player comparative case study on option market makers. So, I don't want to burn too much dry powder here. However, I do want have a standalone post on Cutler in the archives as reference for those who don't yet have access to the case study content... Anyway, in the charts that follow, Alphacution presents a few of its most basic analytics from its modeling of 13F data related to Cutler, with comparison [...]
Walleye Trading’s Book: Hiding in Plain Sight
“There is an old saying: If you want to hide the treasure, put it in plain sight. Then no one will see it.”Larry Dossey By now, avid readers of Alphacution know the joke: We have taken that which had previously been hiding in plain sight about the most secretive and mysterious players in the world of trading, and shed some light on them. Hence, today's title image metaphor is a well lit and colorful chameleon set against a black background. While much more in this zone of the ecosystem is no longer hiding from us, there are many fascinating discoveries yet to be made... Related to this idea, there's a super-cycle of research and development going on in the background at Alphacution, much of it currently about option markets. At the risk of redundancy, the options markets - in particular, those with skills for trading in option and other derivatives markets - hold a special key to the evolution of listed markets, and those who are most likely to remain [...]
