The next time you question why your order flow slowed down over the last couple of months, remember this story.
Once it became obvious that the pandemic was an issue the nation couldn't ignore, Ken Griffin's Citadel sprung into action.
All within the course of a week, the company had moved thousands of servers, dug trenches for fiber optic lines and rented rooms at the Four Seasons in Palm Beach to set up a makeshift trading floor, according to Bloomberg. The company has "mostly" abandoned its Chicago and New York offices.
The company was able to handle a 90% jump in electronic treasuries volume in March and traded 3.3 billion U.S. shares per day. In March, U.S. stock volume was more than 15.5 billion shares per day and Citadel's monthly average was about 65% higher than its busiest day in 2019.
Griffin said he was able to keep markets working due to Citadel's "ample cash stockpile" that helped them move the operation to Florida. He also said that electronic trading made things possible and that the same continuity would not have happened in the open outcry powered markets of old.
He continued: “It’s infinitely easier for us to manage our affairs as a market-making community in a world of distributed computing, the internet and electronic exchanges. At 100,000 feet, our customers’ experience was as close to flawless as you can get across markets. Giving people a fair and transparent price every day is our mission, and we accomplished that.”
Citadel is known for having deployed more automation than many other traders and market makers, a fact makes their competitive advantage "extra worrisome" to Wall Street. Of course, nobody would have imagined that they would be running "multiple trading floors" from a luxury five star hotel that also "boasts yoga classes, poolside cabanas and private surf lessons".
For now, even Griffin's employees that didn't make the move to Florida are mostly working at home.
“We’ll be looking to Governors Cuomo and Pritzker, health officials and the president for leadership as we frame our decision on when and how to bring people back to work in our large urban environments. Currently, the vast majority of our workforce is working remotely,” he said.
And it may never be more important for Griffin's operation to be running smoothly: there are more than $50 trillion in global assets linked to the treasury market. Liquidity and ease of trading in the treasury market remain paramount, especially as the U.S. just sold a record $3 trillion in treasuries over the last quarter.