How Susquehanna Uses Poker to Train Elite Traders: A Deep Dive into Decision-Making Parallels
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Susquehanna International Group, one of the world’s largest market-makers, embeds poker into its culture not for recreation, but as a deliberate training tool for high-stakes trading. Quantitative researcher and former professional poker player Jared Angenman breaks down the three-phase structure that links every poker hand to every trade.
Phase 1 – The Ante: Why You Must Play
- Poker: The ante (or blinds) is the compulsory stake that forces action; without it, optimal play is to fold every hand.
- Trading: Fixed costs—co-located servers, market-data feeds, salaries—create an identical “ante” that obliges Susquehanna to seek trades just to cover the overhead.
- Key insight: Both arenas require a minimum level of activity; passivity is punished by the structure itself.
Phase 2 – Decision-Making Under Uncertainty
- Information hierarchy:
- Private information (hole cards vs. internal models & trader intuition).
- Public information (community cards vs. news, filings, macro releases).
- Opponent actions (betting patterns vs. tape prints and order-flow clues).
- Time pressure: Both poker and trading demand rapid, heuristic-based choices that approximate the “infinite-time” optimal decision.
- Objective: Maximise expected value (EV) while managing the risk of adverse selection, not mere price volatility.
- Training method: Post-hand or post-trade peer review—traders dissect decisions exactly like poker players analysing hands.
Phase 3 – Outcomes & Noise
- Signal vs. noise: A +EV poker hand can lose 49 % of the time; a well-priced option trade can still lose on random market drift.
- Law of large numbers: Susquehanna runs thousands of independent trades daily to reach the “long run” quickly and dilute noise.
- Psychological discipline: Poker trains traders to separate process from outcome, preventing tilt after inevitable losses.
Practical Take-aways for Australian Investors
- View your platform fees, data subscriptions and advisory costs as an “ante” that must be overcome before any strategy is profitable.
- Build a repeatable decision checklist—private insight, public data, market action—then review every trade with the rigour of a poker debrief.
- Track process metrics (edge size, risk controls) rather than short-term P&L to avoid being fooled by noise.