If you live in Asia and want to trade U.S. stocks during your day, Citadel Securities wants your business. The Miami-based market maker switched on all-hours U.S. equities trading in November and is now leaning into Asia to grow it. Joseph Mecane, the firm's head of execution services, said in Hong Kong on Wednesday that Citadel Securities is approaching a wide mix of institutions in the region, including retail brokerages, sovereign wealth funds and asset managers, and will also pursue insurers and mega-banks.
Extended trading has been a retail-heavy lane so far. Mecane said about 11% of U.S. market volume happens in the pre and post sessions, and in the U.S. overnight session, Citadel Securities is responsible for at least half of retail execution. He noted that over 20% of the U.S. orders Citadel Securities handles for mainstream retail platforms come from investors outside America, and that during non-U.S. market hours those overseas flows make up roughly 60%.
The push is landing just as U.S. venues move toward near 24/5 access. From December, the New York Stock Exchange expects to offer 23-hour-a-day access, five days a week, for select transactions. Nasdaq Inc., for its part, is aiming to operate its stock markets 23 hours per day during the workweek.
"Once you have the exchanges live 23/5, and you have the infrastructure that enables more participants to come into the marketplace" that will fuel growth, Mecane said. He noted Citadel Securities will connect to those venues while still serving as a single counterparty.
There's also a blockchain angle forming. In January, NYSE said it intends to build a venue using distributed-ledger tech to support around-the-clock trading in tokenized stocks and exchange traded funds. The NYSE, a subsidiary of Intercontinental Exchange Inc., plans to combine its existing matching systems with private blockchain networks to allow real-time trading of tokenized securities, aiming for a launch later this year if regulators approve.
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Citadel Securities is watching closely. "It's important to make sure that similar products that do similar things have the same level of regulation," Mecane said. "Once we have a better sense of what the SEC is going to allow, we will clearly look to be a leader in the space."
To prep for wider all-hours adoption, the firm has been adding staff. Mecane said the team in Hong Kong now numbers about 10, concentrating on sales and client service, and roughly 50 in the U.S. dedicated to the effort.
For years, Asia-based traders had to stay up late to reach U.S. markets. Now they can transact during their daytime with platforms such as Citadel Securities and competitors stepping in as counterparties. Retail participation from Hong Kong and South Korea is especially strong in the overnight sessions, Mecane said, and interest from Asian institutions is picking up too.
Citadel Securities rode second-quarter volatility to record trading revenue of $7.3 billion, more than triple the level a year earlier, according to a person familiar with the results. According to the person, net income jumped by over 250% and reached $3.3 billion. The firm, founded by billionaire Ken Griffin, became a dominant player during the meme-stock era and, as of the end of June, it handled about 35% of all U.S.-listed retail volume. It sits among non-bank firms that built their own tech and quantitative models to match buyers and sellers, with Jane Street Group, Hudson River Trading and Susquehanna International Group as major U.S. rivals.
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