Market-Maker 13F Holdings: Why They Aren't Investment Conviction

Open any 13F holder list for a high-options-volume stock — Coinbase, GameStop, Tesla, NVIDIA, or any other meme/momentum/volatile name — and you'll find at least one of the following firms near the top: Susquehanna International Group, Jane Street Group, Citadel Advisors, Wolverine Trading, Optiver, IMC, CTC, PEAK6, GTS, Two Sigma Securities, Jump Trading, Virtu Financial, Flow Traders. The reported dollar values can run from hundreds of millions into the low tens of billions.

Those positions are real — the shares are actually owned and reported on the 13F as required. They are also not investment conviction. They are options-book hedges. Understanding the difference is one of the highest-leverage things a 13F reader can learn, because it changes the conclusion you draw from a top-15 holder list.

Why a market maker shows up on a 13F at all

A market maker's primary business is providing liquidity in options. When a customer buys a call option on a stock, the market maker is on the other side — they have a short call exposure. To eliminate directional risk, the market maker buys the underlying stock in the right amount to neutralize the option's price sensitivity (its delta). The net result: the market maker now owns shares.

Those shares get reported on the next 13F. From the SEC's perspective, the position is identical to a long-only fund's long position: ownership is ownership. From an economic perspective, the position is the opposite of conviction — it exists only to offset a derivatives book that the market maker did not choose to take a directional view on.

The same logic runs in reverse for short calls (where the market maker has bought calls to lay off short exposure and ends up short shares, which doesn't appear on the 13F because 13Fs only require long positions to be reported) and for put options (where market-maker share positioning depends on whether they're net long or net short puts).

The diagnostic: how to spot a market-maker 13F line

Three quick checks tell you whether a top-15 holder line is investment conviction or hedged inventory:

1. The firm name. The set of firms whose primary business is options market making is small and well-known: Susquehanna International Group, Jane Street Group, Citadel Securities and Citadel Advisors (the latter has both market-making and multi-strat hedge fund books), Optiver, IMC Trading, CTC LLC, Wolverine Trading, PEAK6 LLC, GTS, Two Sigma Securities, Jump Trading, Virtu Financial, Flow Traders. If the firm name on the 13F line is one of those, default to interpreting it as inventory until proven otherwise.
2. The stock's options-flow profile. Market-maker 13F lines concentrate on stocks with high listed-options volume and high implied volatility. If you see a market-maker line on a low-options-flow stock, it's more likely to be a smaller hedged book — still not conviction, but also smaller in dollar terms.
3. The position size relative to the firm's other holdings. Active conviction tends to be concentrated. A market maker's 13F will have hundreds or thousands of lines, with most positions roughly proportional to the listed options activity in each name. A long-only fund's 13F has dozens of large positions and a long tail of small ones.

What the platform does about this

13F Insight's classification system tags filers by type. The categories that map to non-conviction holdings are:

• passive_index — Vanguard, BlackRock fund advisors, State Street SSGA, Geode Capital, Northern Trust, Invesco Capital Management for ETFs, First Trust Advisors, ProShare Advisors, Schwab IM.
• market_maker — Susquehanna International Group, Jane Street Group, Citadel Securities, Optiver, IMC Trading, CTC, DRW, GTS, Two Sigma Securities, Jump Trading, Flow Traders, Virtu Financial.
• custodian — large bank trust departments where assets are held for client beneficiaries rather than discretionary management.
• quasi_passive — mostly fund-of-funds and aggregator structures that scale with inflows rather than active selection.

When you read a holder list on this site, these classifications are why certain top-10 names get visually de-emphasized or surfaced separately from "active managers" lists. The platform's Smart Money screens specifically filter out the four non-conviction categories so the signal isn't drowned in mechanical positions.

Worked example: Coinbase's top-15 reads differently after filtering

Look at Coinbase’s ownership profile's recent top-15 13F-reported holders unfiltered, then filtered:

The unfiltered list suggests a $33B+ institutional book. The conviction-filtered list shows roughly $3.3B in concentrated active positions, dominated by a single name (Paradigm) whose stake is structurally tied to the firm's sector mandate. The two reads support very different conclusions about how institutional support would behave during a regulatory event or volatility shock — and the second read is the relevant one.

The harder case: Citadel

Citadel is the most-confused name on the market-maker classification. Two distinct businesses:

• Citadel Securities — the global market-making firm. 13F filings here are pure options-book hedging.
• Citadel Advisors — the multi-strat hedge fund (Wellington, Tactical Trading, Equities, etc.). 13F filings here include both real directional positions and hedged exposures within the various sub-strategies.

The platform tags Citadel Advisors as market_maker because its 13F is dominated by options-driven and pair-traded book positions, but the classification is the most contestable in our taxonomy. When reading a specific Citadel 13F line on a non-volatile, non-options-heavy stock, it's worth checking whether the position appears in their fundamental-equity strategy disclosures rather than the volatility-hedging book.

What's lost by filtering market makers out

Two real signals that market-maker 13F lines actually do carry, and which are worth tracking even after you've decided not to treat them as conviction:

• Options-flow proxy. A meaningful quarter-over-quarter change in a market maker's reported position can be a proxy for changes in the options activity on the stock. If Susquehanna's Coinbase line jumps 40% QoQ, options open interest has probably moved similarly. This is a coarse signal but useful as a cross-check.
• Coverage initiation. The first time a market maker shows up in a stock's 13F holder list often coincides with the stock crossing into the listed-options market or with a meaningful expansion of its options venues. That's not investment conviction either, but it's worth noting as a sign of market-structure maturity for the name.

The takeaway

When a retail or sell-side writeup says "Susquehanna owns $4 billion of Coinbase" or "Citadel is the largest holder of GameStop," the statement is technically true and substantively misleading. The shares are owned. The position is reported. But the firm holding them is not making a directional bet on the company.

The correct read: Susquehanna's 13F line tells you Coinbase is an actively-traded options name with a heavy implied-volatility surface. It does not tell you a sophisticated institutional investor is bullish on Coinbase's fundamentals. Holding those two ideas separately is the difference between reading a 13F well and reading one badly. See our related guides on mechanical versus view-driven institutional holders and 13F reported-value traps for adjacent reading.