4 ms·

Of course it's not political, in the sense that RH routes their order flow through Citadel's MM arm, who are probably getting squeezed by Gamma on their (previo

by u10 6y ago

Of course it's not political, in the sense that RH routes their order flow through Citadel's MM arm, who are probably getting squeezed by Gamma on their (previously) OTM naked calls, and if Citadel is the prime broker for all of these shorts _significant_ exposure on that end, as well as the exposure that Citadel hedge fund has on the short position through Melvin.

FireBeyond 6y ago
> if Citadel is the prime broker for all of these shorts _significant_ exposure on that end, as well as the exposure that Citadel hedge fund has on the short position through Melvin. Isn't this meant to be the reason for the "Chinese Wall"? In theory, Citadel as a brokerage is meant to have no insight into the operations or needs or desires of Citadel Hedge Fund. The technically correct answer here seems to be "not my problem", however... not so much.
- u10 6y ago
  In theory... in practice? So much illegal shit goes down in finance all of the time. rarely if ever it gets caught. And when they have literal billions on the line a slap on the wrist fine is preferable.
dillondoyle 6y ago
This was a better worded answer to the question I posted in a sub comment: If I'm understanding (i might not be) this is why it feels like fraud/not following fiduciary responsibility to their clearing partners. -- Does citadel clear their own trades? I could be off here, but what I'm asking is getting at like if they are on all the sides of the transaction as market maker, participating or allow others to participate in 'betting', and clearing the trades themselves? Does a trade even need to clear if it's just moving internally changing col A owner ID from 1234 to 9999?
- u10 6y ago
  Citadel has two sides to their business; Citadel Securities and Citadel. Citadel is the investment side and Citadel Securities is the MM side. I'm assuming that Citadel Securities does not clear the trades for Citadel, but don't quote me on that.
threedots 6y ago
This reads like GPT-3 output, like what on earth are you talking about. I don't think you understand how options market making works and for the record citadel is not a prime broker. I'm no citadel fan but the descent of this sub into lunacy conspiracy is something to behold.
- u10 6y ago
  Citadel has two main arms; Citadel Securities which is a market maker, and Citadel, which is their investment arm. I don't think you understand how the options market work. Several of the large spikes on Friday and the past week is the result of MM (like Citadel Securities) having to purchase shares to cover the naked calls they sold.
  - threedots 6y ago
    I'm well aware of how citadel is structured thanks, I used to work there. If you think options dealers go around taking massive unhedged directional bets then you are very misinformed. I don't have any inside knowledge but i'd bet a pound to a penny the options desks have been making out like bandits this week.

by u10 6y ago

FireBeyond 6y ago

> if Citadel is the prime broker for all of these shorts _significant_ exposure on that end, as well as the exposure that Citadel hedge fund has on the short position through Melvin. Isn't this meant to be the reason for the "Chinese Wall"? In theory, Citadel as a brokerage is meant to have no insight into the operations or needs or desires of Citadel Hedge Fund. The technically correct answer here seems to be "not my problem", however... not so much.

u10 6y ago
In theory... in practice? So much illegal shit goes down in finance all of the time. rarely if ever it gets caught. And when they have literal billions on the line a slap on the wrist fine is preferable.

dillondoyle 6y ago

This was a better worded answer to the question I posted in a sub comment: If I'm understanding (i might not be) this is why it feels like fraud/not following fiduciary responsibility to their clearing partners. -- Does citadel clear their own trades? I could be off here, but what I'm asking is getting at like if they are on all the sides of the transaction as market maker, participating or allow others to participate in 'betting', and clearing the trades themselves? Does a trade even need to clear if it's just moving internally changing col A owner ID from 1234 to 9999?

u10 6y ago
Citadel has two sides to their business; Citadel Securities and Citadel. Citadel is the investment side and Citadel Securities is the MM side. I'm assuming that Citadel Securities does not clear the trades for Citadel, but don't quote me on that.

threedots 6y ago

This reads like GPT-3 output, like what on earth are you talking about. I don't think you understand how options market making works and for the record citadel is not a prime broker. I'm no citadel fan but the descent of this sub into lunacy conspiracy is something to behold.

u10 6y ago
Citadel has two main arms; Citadel Securities which is a market maker, and Citadel, which is their investment arm. I don't think you understand how the options market work. Several of the large spikes on Friday and the past week is the result of MM (like Citadel Securities) having to purchase shares to cover the naked calls they sold.
- threedots 6y ago
  I'm well aware of how citadel is structured thanks, I used to work there. If you think options dealers go around taking massive unhedged directional bets then you are very misinformed. I don't have any inside knowledge but i'd bet a pound to a penny the options desks have been making out like bandits this week.