Market-making giant Citadel Securities is rebuilding the tech that powers its trades as it eyes growth

• Ken Griffin's market maker, Citadel Securities, is revamping its core trading infrastructure.
• The firm has reassessed its tech stack as it eyes growth.
• CTO Josh Woods and COO of technology Jeff Maurone discuss how the firm is rebuilding for its future.

In 2023, Citadel Securities COO of technology, Jeff Maurone, was meeting with senior leaders to discuss technology priorities for the year. But what started as a standard strategy meeting resulted in a yearslong re-evaluation and rebuild across the market maker's entire technology stack.

Maurone said the meeting was a rallying cry for simplicity and walked away with an assignment he positioned like this: "Imagine if you were an airline, could you, on one PowerPoint slide, show 10 to 15 systems that fit together simply and together represent the only systems needed to get all the way from selling a ticket to delivering the passenger."

Now, founder Ken Griffin's market maker is revamping its core trading infrastructure, which is the collection of systems and technologies that executes one in every four equity trades in the US.

Over the past year or two, Maurone and Josh Woods, Citadel Securities' chief technology officer, have been strategizing to consolidate redundancies, mitigate operational complexities, and reduce the cost of trading and entering new businesses. They're looking across the entire lifecycle of a trade as a blueprint for the rebuild.

Since its inception in 2002, Citadel Securities has used predictive analytics, data, and technology to allow buyers and sellers to trade assets by providing market liquidity. It uses algorithms to capture profit from small differences in prices. In the past two decades, the market maker has expanded in the types of clients it works with, the products it trades, and the exchanges where it trades.

The goal is to prepare the firm for what lies ahead while delivering more resiliency and capabilities to clients today, Woods said.

"This is a way to, over time, keep your agility. I almost look at it as the stretching of business," Woods told Business Insider. "If you don't do these things, your technology stack eventually gets more rigid than you'd like, and then when you need to stretch, you're unable to."

Building Citadel Securities' trading infrastructure of the future

In the last few years, Citadel Securities pushed into credit trading, expanded its rates franchise, and introduced an institutional options offering. It has scaled up its operations in Asia Pacific and launched rates trading in EMEA; it is now active in more than 50 markets across 150 venues. As it grew, it developed a vast patchwork of different technology solutions to meet its needs.

But as Citadel Securities looks to continue to grow, it needs to position its technology to easily break into new markets, asset classes, and geographies. The firm is aiming to do that by re-architecting key systems in a standard, global way, Maurone said.

"Part of this is just evolving the technology and being able to take a step back with fresh eyes and say, 'Well, now that we've built out a lot of these offerings across all these different markets with so many different types of counterparties, we just have a much bigger set of requirements that we're looking at,'" Woods said. "And so how do we look at all those and try to find the patterns and the best way of operating?"

Take the diversity in exchanges, which vary dramatically in terms of fee structures, operating hours, and clearing requirements. Instead of relying on individual systems that cater to individual exchanges, the firm is aiming to adapt its back-end systems to be flexible enough to accommodate many exchanges and onboard new ones efficiently.

Asset types are another area where there's lots of underlying variance, especially in terms of data structures. And differences in trading practices — from systematic to high-touch — will require Citadel Securities to rethink those underlying systems.

Through several progressive changes to its tech stack, Maurone said he hopes that in 2025, the firm will be entirely trading in a system that reflects its goal to reduce operational complexity and redundancies.

"A lot of times, it requires reorienting how we look at the problem. Before, you couldn't really see the pattern because you're only looking at one little slice of the problem, but now that you see it across all these different domains, it becomes clear that there's more we can do," Woods said.

How product managers are bridging business and technology

Wall Street firms have long turned to consulting agencies, like McKinsey or Deloitte, to shepherd tech execs and other C-suites through a transformative process such as this. Instead, Citadel Securities has turned to an internal group of product managers and COOs — some of whom spent years working at consulting firms — to oversee the vision and execution of its technology.

Building out this internal muscle, Maurone said, has filled a need that an external consultant never really could. "We need to live and breathe and own the strategy," Maurone said, adding that much of the software is created in-house. "You need the battle scars and the issues to shape the people who are building the solution," he said.

Each business or function has a COO backed by a team of product managers who partner closely with their business head. The operation is overseen by firmwide COO Matt Culek, who works closely with CEO Peng Zhao and President Jim Esposito on the firm's most challenging issues.

Maurone's team supports Citadel Securities' technology organization, and he manages a team of 15 people. They set metrics, ensure engineers meet their delivery goals, and integrate customer feedback.

Maurone, the first person with a product-management hired within the technology organization at Citadel Securities five years ago, has been slowly building out this team of product managers.

"Quite often, people in Jeff's org are thinking about the fundamental business problem we have," said Woods.

"They have a lot of impact and have on multiple occasions reshaped what we end up building, which is very different than what you'd get if somebody was just looking at the requirements," and following orders, Woods said.