Hudson River Trading LLC, one of the biggest high-frequency trading firms, is planning to enter the business of executing stock trades for individual investors.
The firm—which handles around 8% of daily U.S. stock-trading volume—has been building out a so-called retail wholesaler business. It aims to launch later this year or in early 2022, an executive at the firm told The Wall Street Journal.
Wholesalers execute orders to buy and sell stocks submitted by people using online brokerages such as Robinhood Markets Inc. and TD Ameritrade.
By entering the business, New York-based Hudson River is setting its sights on two huge rivals: Citadel Securities and Virtu Financial Inc. Together, the two firms handle more than 70% of individual investors’ stock orders, according to Bloomberg Intelligence data.
“We have a lot of respect for Citadel Securities and Virtu and their ability to provide great execution for retail investors,” said Adam Nunes, Hudson River’s head of business development, in an interview. “We do see demand from retail brokers for an additional wholesaler. We are confident that we can compete with Citadel Securities and Virtu in providing liquidity to retail investors, the same way we do on exchanges.”
