At a time when many capital markets firms blur the lines between their institutional businesses, Citadel Securities keeps things simple.
“We’re not a bank. We don’t have a financing business. We don’t do M&A advisory,” Citadel Securities President Jim Esposito told the Inside the ICE House Podcast, which is produced by Intercontinental Exchange.
“We’re maniacally focused on being the best market maker.” Esposito said, adding that the focus is backed up by numbers. “We account for about a third of the volume on the New York Stock Exchange, nearly a quarter of all U.S. equities trading, and over a third of U.S. retail trading.”
The firm’s edge comes not just from its scale, but from the systems built to support it, according to Esposito.
“We’ve got over 300 PhDs at the firm,” Esposito said. “And they’re not just brilliant quants and researchers. They’re also designing and optimizing systems that can handle peak market stress and then some.”
Esposito said the firm builds and maintains capacity to handle five to ten times previous highs in market volume.
Citadel Securities also keeps people on the floor of the NYSE. “It’s not a question of whether the floor should be all-electronic or all-human. It’s both,” Esposito said. “Humans provide judgment that matters, especially in volatile or unusual situations.”
That ability to remain steady under pressure is part of how the firm sees its responsibility in the market. “Our market share goes up during periods of stress,” Esposito noted. “That’s when clients rely on us most. We’re providing liquidity, we’re providing two-way markets, and we’re doing it when others pull back.”
He added that consistency is central to Citadel Securities’ role in the market. “We don’t get to pick our spots,” Esposito said. “Our job is to be there in all environments, when things are quiet, and especially when they’re not. That’s when clients count on us most.”
Looking ahead, the firm may expand into more asset classes, such as high yield bonds, emerging market debt, and mortgage-backed securities, as well as across geographies. “It’s a natural extension of what we already do in rates, swaps, and Treasuries,” Esposito said. Europe is a particular area of focus, where Citadel Securities believes it can compete on execution quality.
Esposito also highlighted the firm’s engagement with regulators and policymakers. From crypto market structure to event contracts to extended trading hours, Citadel Securities wants a seat at the table. “We want to be part of that dialogue. Regulation doesn’t scare us — bad regulation does,” he said.
Internally, the firm is focused on staying ahead. “We have to constantly disrupt ourselves,” Esposito said. “We don’t want to be the ones caught off guard by a better way of doing things.”
