06.20.2016

Citadel Kicks Off New Role on NYSE Floor With Promptness Push

06.20.2016

(This article originally appeared on Bloomberg)

Citadel Securities only recently set up shop on the floor of the New York Stock Exchange, but it’s already pushing for changes.

Unlike its two main rivals in stock trading, Nasdaq Inc. and Bats Global Markets Inc., getting shares open for the day at the NYSE is a partly manual process. The perils of that approach were underscored on Aug. 24, when hundreds of NYSE-listed securities didn’t immediately open at 9:30 a.m. amid a surge in volume, causing confusion and spurringwild price swings.

Citadel Securities, one of a handful of firms that manages trading at the floor, told brokers in a town hall-style meeting Thursday afternoon that it wants to get more shares going right at 9:30 a.m. To do that, it will significantly reduce its use of an NYSE floor convention that lets brokers request a delay in a stock’s opening. Although U.S. stocks trade on 12 exchanges and dozens of private platforms, the opening auction at NYSE remains a key moment of the day where a huge chunk of shares change hands.

“Opening all stocks on time is a big priority for us because it ensures price discovery for NYSE-listed issues happens on the exchange, and results in the entire market working more efficiently,” Jamil Nazarali, head of execution services at Citadel Securities, said in a phone interview. Citadel Securities is part of billionaire Ken Griffin’s hedge-fund operator, Citadel LLC.

Citadel Securities is responsible for about 1,500 stocks at the floor, a role it took on in May by purchasing a KCG Holdings Inc. division. In its new crusade, Citadel Securities will limit its use of “broker holds,” which let brokers delay the opening of a NYSE stock if they’re trying to place a large order for a customer — in theory to stabilize prices.

Stacey Cunningham, chief operating officer of NYSE Group Inc., said the exchange is working with all of its floor trading businesses, known as designated market makers, to balance timely opens with ensuring stocks are correctly priced. NYSE Group is a division of Intercontinental Exchange Inc.

“Our model is strictly focused on automating where appropriate and leveraging the experience and expertise of our designated market-makers where appropriate,” Cunningham said.

Broker holds accounted for about 25 percent of the times Citadel Securities couldn’t get a stock trading immediately at 9:30 a.m., according to data it analyzed from May. The firm also, 89 percent of the time, got stocks going within 3 seconds of 9:30 a.m. in May, an improvement from KCG’s 80 percent rate in April, NYSE data showed.

Citadel Securities’ change may set a model for peers. It’s one of four automated trading firms that dominate the business of overseeing shares at the NYSE floor, a group that includes Virtu Financial Inc., Global Trading Systems LLC and IMC Financial Markets.

Technology costs in asset management have grown disproportionately, but McKinsey research finds the increased spending hasn’t consistently translated into higher productivity.
#AI #Fiance

We're in the FINAL WEEK for the European Women in Finance Awards nominations – don't miss your chance to spotlight the incredible women driving change in finance!
#WomenInFinance #FinanceAwards #FinanceCommunity #EuropeanFinance @WomeninFinanceM

ICYMI: @marketsmedia sat down with EDXM CEO Tony Acuña-Rohter to discuss the launch of EDXM International’s perpetual futures platform in Singapore and what it means for institutional crypto trading.
Read the full interview: https://bit.ly/45xRUWh

Load More

Related articles

  1. iShares lists its inaugural European listed product on Bitcoin.

  2. Trading Europe From ‘Across the Pond’

    Since the beginning of the year, Euronext has continued to deploy capital to expand across Europe.

  3. Eurex is the only derivatives exchange outside Korea to offer access to a Korean equity index.

  4. Clock Synchronization: A Matter of Timing

    The first phase of 24X National Exchange is due to launch in September this year.

  5. Companies trading on the new market are required to meet specific disclosure benchmarks.

We're Enhancing Your Experience with Smart Technology

We've updated our Terms & Conditions and Privacy Policy to introduce AI tools that will personalize your content, improve our market analysis, and deliver more relevant insights.These changes take effect on Aug 25, 2025.
Your data remains protected—we're simply using smart technology to serve you better. [Review Full Terms] | [Review Privacy Policy] By continuing to use our services after Aug 25, 2025, you agree to these updates.

Close the CTA