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“Learn To Code” Pays Off: HFT/Quant Fund Earned Over $1 Billion In Chaotic Quarter

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Remember when “learn to code” was racist, mysogynist, sexist, and/or homophobic and got some deplatformed from social media for hurting hard-working journalists feelings? No seriously, twitter did

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Well some of those that chose to “learn to code” just got a huge pay-day as Bloomberg reports that Hudson River Trading, a 400-person proprietary trading firm that specializes in equities and stock options, reaped about $1.2 billion from trading in the first quarter.

Founded by alumni of the Massachusetts Institute of Technology and Harvard with math and computer science backgrounds, the firm describes itself as one that’s “built by coders, led by coders.”

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In 2014, the Wall Street Journal reported the firm was responsible for about 5% of U.S. equity volumes. It spent most of its time fine-tuning its algorithmic-trading strategies, according to the publication.

“All of our models lose predictive power all of the time,” founder, Jason Carroll said.

“You’re always on this treadmill of models running out of steam and having to make improvements to them.”

Earnings before interest, taxes, depreciation and amortization surged 184% to $719 million.

“Retail trading volumes increased in 2020 and peaked in January 2021,” Bloomberg Intelligence analyst Larry Tabb said.

“When spreads widen and volatility increases and everyone runs away, the profitability for liquidity providers increases.”

HRT’s trading capital ballooned 45% to $4.5 billion in the first quarter from year-end, the people said.

Other trading firms that have seen their profits soar during the pandemic-induced volatility include Jane Street Group, Citadel Securities, DRW Holdings, and Virtu Financial.

The phenomenon may prove short lived, at least for some of the firms.

“Even if the market continues in its crazy ways, you’ll see other people come in to compete these spreads away,” Tabb said.

Still, maybe Biden was right when he told coal miners to “learn to code” (or he is racist “abuser” too)?