> Rentec gets a lot of leverage and gets ridiculous pricing on option trades from the banking desks because of the flow they bring.
So do about 200 other funds world wide. Their leverage and sell side pricing isn't what makes them successful, as most other large funds trade as much as them and get atleast the same pricing as they do.
RenTec’s volume is much higher. They are the sheikhs of the street.
Leverage makes a huge difference. If a strategy nets on average 0.1% a day and if RenTec can trade at 2x more leverage than their counterparts, they will post 60% pa vs 30% pa.
RenTech trades far less than many of the market makers in the US, and they get the same funding rates as the rest of the big players. I don't know their specific situation, but the fact that all the big players get the same rates indicates RenTech isn't special in this way.
They have no size or leverage advantage that 200 other funds in the US don't have.
So do about 200 other funds world wide. Their leverage and sell side pricing isn't what makes them successful, as most other large funds trade as much as them and get atleast the same pricing as they do.