indiviudal trading vs. institutional

From what i've seen, it seems as if the lack of people delving into trading out of their own brokerage might be confirmation that personal trading is inherently more difficult than with a firm. Given the education and wherewithal that a fund such as optiver or twosgima etc... can provide, I'm surprised to almost never encounter people who spend a few years with these funds and then feel comfortable to trade on their own terms, or even upper level directors that most definitely have the personal capital to deploy on their own. Perhaps this is more common than I realize, a dynamic of "gangstas move in silence" since their is little need to advertise that you trade out of your own book on Linkedin. So is this all down-stream of the possible fact that institutional trading is inherently at an advantage over individuals? Whether it be via the sheer amount of liquidity, or strong IP, or smarter quantitative strategies?

 

Just look at the "basis trade" - funds make a fuck ton but its because they're trading with size (thousands of contracts per trade / hundreds of millions of $) since the price difference is de minimis. Can't be replicated in a PA, you'd make nothing

Also institutions get a lot of flow, something you'd also wouldn't get as an independent

 

No that’s not what flow means. I’m pretty sure he’s referring to spreads being made, where offers are lifted, what sales people are hitting them up for in terms of direction, size etc

 
Most Helpful

The strategies you're employing as an institutional are significantly different than an individual portfolio, and it's why your individual trading experience if it's ever on a resume means absolutely fuck-all.

Options market making with the required delta hedging and capital is something that most retail traders will never be able to take part in. You actually do see some traders at strong HFT D1 shops running D1 crypto MM algos on the side and getting active there because it's less capital intensive.

 

Works at Akuna Capital LLC:

The strategies you're employing as an institutional are significantly different than an individual portfolio, and it's why your individual trading experience if it's ever on a resume means absolutely fuck-all.



Options market making with the required delta hedging and capital is something that most retail traders will never be able to take part in. You actually do see some traders at strong HFT D1 shops running D1 crypto MM algos on the side and getting active there because it's less capital intensive.


Helpful thanks

 

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