Ken Griffin and Citadel PRINTED money last year
$28 billion in revenue and their flagship fund returned 38.1% in a year where most investors struggled.
How did they do it?
Let’s dig into their secrets 🧵
$28 billion in revenue and their flagship fund returned 38.1% in a year where most investors struggled.
How did they do it?
Let’s dig into their secrets 🧵
Citadel manages about $54 billion in assets
Its flagship fund, Wellington, returned 38.1% in 2022, better than just about any hedge fund.
In contrast, the S&P 500 lost about 19% during the same time.
Its flagship fund, Wellington, returned 38.1% in 2022, better than just about any hedge fund.
In contrast, the S&P 500 lost about 19% during the same time.
How good was 2022 for Citadel?
So good that the company flew 10,000 employees out to Disney World for 3 days of fun
So good that the company flew 10,000 employees out to Disney World for 3 days of fun
How does Citadel do it?
First, it’s important to know that Citadel has 2 different parts: The hedge fund, and the market maker.
Citadel LLC manages money, and Citadel Securities is a market maker.
First, it’s important to know that Citadel has 2 different parts: The hedge fund, and the market maker.
Citadel LLC manages money, and Citadel Securities is a market maker.
As a market maker, Citadel Securities executes trades.
Brokers send their trades to Citadel to be executed.
This applies to both stocks and options, as well as other types of securities.
Brokers send their trades to Citadel to be executed.
This applies to both stocks and options, as well as other types of securities.
Citadel Securities generated record profits of $7.5 BILLION in 2022
It’s a massively successful business
It’s a massively successful business
How does it generate such huge returns?
Citadel Securities has drawn a lot of criticism for its ‘payment for order flow’ methods
Essentially, Citadel pays brokers like Robinhood to send their customer’s trades to Citadel to execute.
Citadel Securities has drawn a lot of criticism for its ‘payment for order flow’ methods
Essentially, Citadel pays brokers like Robinhood to send their customer’s trades to Citadel to execute.
Ken Griffin has infamously taken the opposite side of many trades that customers of Robinhood and other brokers piled into over the last couple of years.
Did his fund use inside information from his market maker operation to profit?
Did his fund use inside information from his market maker operation to profit?
Citadel Securities handles a very large portion of all trading in the United States, thanks to the payment for order flow model it helped to popularize.
Many have speculated that Ken Griffin antagonized AMC and GameStop investors so that Citadel could continue to sell them call options at a huge premium.
What’s next?
Well, for Ken Griffin, he’s planning to put some of his profits towards a 51-story office tower in Manhattan
Well, for Ken Griffin, he’s planning to put some of his profits towards a 51-story office tower in Manhattan
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