Citadel Securities' secret sauce and the $2m pay premium

If you're leaving the Goldman Sachs trading floor now, there's a well-trodden path to take. It doesn't lead to a hedge fund, but to Citadel Securities, the electronic trading firm. Traders and salespeople from Goldman Sachs and other leading banks are congregating there. This is why.

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Citadel Securities declined to comment for this article, but publicly available information helps explain its appeal. Citadel Securities is growing fast and it's highly profitable. Sales and trading businesses in banks are being squeezed by the cost of technology investments and by margin compression. Multistrategy hedge funds are also now struggling in the wake of recent losses in their macro businesses. Citadel Securities' rival electronic trading firms have a broader focus.

Figures released this week showed Citadel Securities making $6.5bn in EBITDA on revenues of $12.2bn last year. This kind of profitability enabled the firm to pay its 1,800 people a total of $3.5bn for 11 months, implying an average of $2.1m each a year. Top traders can make this at Goldman Sachs; average traders, maybe not.

Speaking to Risk Magazine in December, Citadel Securities' ex-Goldman Sachs president Jim Esposito and chief operating officer Matt Culek, explained what differentiates the firm from banks. 

Banks' trading systems typically evolved for financing activities, said Esposito. These financing activities tend to involve long dated trades and to be capital intensive, he added. As a result, banks' trading platforms are less able to quickly redeploy capital as needed. Combine this with the fact that banks' trading operations are often siloed and managing their risk independently, and it can be hard for banks to understand risk positions and to offer liquidity during times of high volatility.

Citadel Securities is different, said Esposito. The firm uses its own in-house technology and is able to calculate exposure across multiple businesses and products to capture netting effects. Combined with a buffer that's retained at the "top of house" for times of spiking volumes or volatility, this means capital at the firm can be very swiftly reallocated to maintain liquidity for clients.

It's not clear how Citadel Securities has fared since the US and Israel launched strikes in the Middle East on 28 February, but during the volatility created by Trump's tariffs in April 2025, the firm said it recorded daily average Treasury volumes worth $70m in per-basis-point sensitivity, with hit ratios of 45%. "They provide an incredible amount of liquidity. Basically, the banks don’t want to enter into that kind of business,” one client informed Risk.

Citadel Securities has competitors beyond banks, though. Jane Street, IMC, Hudson River Trading (HRT) and others, are also in the liquidity-provision space. Jane Street might even pay more on average than Citadel Securities. 

However, market insiders say that comparing the electronic trading firms is not comparing like with like. While Citadel Securities has focused on being a pure market maker (“We like to think we are the Amazon of finance. We trade more equity flow than anyone on the planet,” says Esposito), rivals are more heavily focused on investing their own money. Jane Street, for example, is thought to have made about $830m, or 12% of its third quarter revenues, last year from investing in Anthropic. HRT has units like Prism, which focus on the kinds of mid-frequency longer duration trades that more commonly found in hedge funds.

This helps explain why, as Citadel Securities boosts its institutional business, market makers from banks keep climbing aboard. Nikhil Choraria, one of Goldman's profitable traders and the former head of the European rates desk, is due to join in about six months' time as head of fixed income alongside ex-BofA trader Shyam Rajan. Citadel Securities can make markets even in the most volatile situations, and can pay accordingly. In these times, Choraria is unlikely to be the last top trader to succumb to its appeal. 

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