Beginning his trading career as a Chicago Mercantile Exchange’s clerk, Mike Komaransky traded for 16y ears. Mike got involved in all forms of trading; from European fixed income derivatives to U.S treasuries. He spent most of his years at DRW Holdings where he became a partner in ranked among the firms that operates one of the biggest frequency trading businesses in Wall Street. However, Komaransky towed a new investment path since 2010, trading in Bitcoin and other cryptocurrencies. His results were outstanding. However, having reached the peak of his career, Komaransky finally tendered his retirement notice this summer at the age of 38.
On the 30th day of June, Komaransky posted on his tweeter handle his decision to resign after 16 years of active trading.
Over the years, the proprietary trading firms have made remarkable progress, inspired by top frequency trading.
The large number of participants in Wall Street trading became a matter of discuss, (in 2009, it got a spot on Forbes cover as The New Masters of Wall Street) and featured “Flash Boy” Michael Lewis bestseller.
But with the current unpredictability of the market, high frequency trading seems to be losing its steam as most firms are struggling to get their heads above the waters. These trading firms are seeking a new platform to invest their capital and the bigger firms are acquiring smaller competitors. Recently, DRW made public its intension to acquire a smaller rival, RGM Advisors.
With the outstanding performance of Bitcoin and some other cryptocurrency this year, high frequency traders are considering a swap in investment. These proprietary trading firms seem to be better positioned for cryptocurrency trading as they are involved in investing their firm’s capital for anticipated high returns. Wall’s Street’s hedge funds’ Fiduciary obligations to their external investors usually disqualify them from trading cryptocurrencies like Bitcoin. Goldman Sachs and similar top investment banks in Wall streets have their individual organizational restrictions.
IN an interview with Komaransky, conducted by Forbes, the frequency trader explains that starting an intuitional-sized trading of Bitcoin as at 2014 would only have been possible with top trading firms like DRW.
During his working days in London, back in 2010, Komaransky read Tyler Cowen’s blog on Bitcoin and thereafter, he became interested. Cowen, George Mason University’s economist, published a blog post which became the foundation of Komarnasky’s trading success.
Komaransky admits that he had no interest in Bitcoin trading until in November 2013, when Bitcoin greatly appreciated in value. This period saw the Bitcoin price moving remarkably fast, but on the other hand, Mt. Gox gradually began to decline. With the boost in trading activities in 2014, Don Wilson, DRW’s CEO and founder inspired Komaransky to establish a trading table for crypto currencies. The business was named Cumberland Mining; derived from the song “Cumberland Blues” which talks about a poor industrious miner.
During a period when the Bitcoin market witnessed high instability, DRW’s Cumberland division linked up with top exchanges to take advantage and established a network of counterparties interested in trading Bitcoins. A trading counterparty was provided by Komaransky group, with the aim of taking up some high risk, making significant trades like securing a large number of coins which were auctioned by U.S Marshal Service. These coins were confiscated from Ross Ulbricht and Silk Road, his online black market.
Komanrasky explained that the market was tender and tied with several infamous headlines from Mt. Gox and Silk Road. He further explains that they were not deterred by the headlines, but sought for a true trading opportunity. He added that the primary strength of DRW is the ability to take calculated risk.
Currently, Cumberland Mining has rising to become one of the biggest crypto-market makers with 12 staff specialized in Bitcoin and Ethereum trading, basically for top investors seeking to invest $1 million and above.
Cho, current CEO of Cumber Mining, stated that he has had more discussions with conventional financial firms in the past one month, than he had in the past year.
For instance, Chase Lochmiller, a Massachusetts Institute of Technology degree holder and a Stanford University Master’s holder, has contributed his skills to the top players in frequency trading on Wall Street like Jumping trading and Getco.
Lochmiller, however, left his Jump Trading job in July. Legal documents reveals that he made several millions of dollars every year, silencing his career of employing viable techniques to trade stocks in split second, to investing in cryptocurrency. Lochmiller at the age of 31, joined the hedge fund, Polychain Capital, which is managed by Olaf Carlson-wee, seeing its investment increase from $4 to a whopping $250 million within a year of trading Ethereum, tezos and other cryptocurrencies.
