Hull Trading Company
| Limited Partnership | |
| Industry | Financial Services |
| Fate | Acquired by Goldman Sachs in 1999 |
| Founded | 1985 |
| Headquarters | Chicago, IL |
Hull Trading Company was founded by American businessman and investor, Blair Hull in 1985. Hull Trading was an independent algorithmic trading firm and electronic market maker known for its quantitative and technology-based trading strategy.
In the late 1970s, Blair Hull developed an empirical options pricing model independent of Black–Scholes. Realizing that computers would lead to automated exchanges and mathematical securities pricing, he founded Hull Trading Company. The company became a global leader in the application of computer technology to listed derivatives trading. Hull developed a proprietary and large scale reliable distributed system architecture, providing automatic real-time pricing, risk management, market making and interconnection with automated options, futures and stock exchanges as they became available. Hull Trading Company's massively scalable software technology was deployed to cover both domestic and international markets as electronic, on-line exchanges became available, while innovative hand-held computer technology was employed at exchanges still requiring execution by floor traders.
The firm grew to over 250 employees including financial engineers, physicists, almost 100 software engineers and computer support staff. At its peak, Hull Trading Company moved nearly a quarter of the entire daily market volume on some markets, executed over 7% of the index options traded in the United States, 3% of the equity options, and 1% of all shares traded daily on the .
In 1999, Blair Hull sold the Hull Trading Company to Goldman Sachs for $531 million.
Hull Trading was primarily an equity options market maker. The firm employed complex mathematical models to analyze short-term options and equity pricing discrepancies while hedging against overall risk exposure. It employed mathematicians and physicists to design algorithms and a large number of software engineers to implement systems based on these algorithms.
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