can someone smarter than me explain how the big pod shop model (Millennium, Citadel etc.) generally works pretty well? The whole idea of yanking the portfolio after some non-outlier drawdown in a relatively short period of time shouldn't really add any value imo
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MLP also has really good set ups to trade a broad array of products cheaply and has internal crossing so potential offset for t costs. Pod models like citadel are far less appealing bc you’re an input into citadel securities and are executed “low urgency” by default
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Citadel has internal crossing too they just don’t pass that saving onto the PMs
End of conversation
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Don’t forget leverage. Low net/beta neutralish platforms are levered 4-5x+ on capital? If a pod makes 4-5% on levered capital they’re crushing it for the firm. 2-3% per yr is great. 0-1% is even acceptable for a couple yrs. Only thing u can’t have on that model is a pod losing $$
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