Oct 5, 2025 · 31m · founders
The Billionaire Who Automates Everything: Thomas Peterffy
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This episode chronicles the extraordinary life of Thomas Peterffy, exploring his journey from an impoverished immigrant in Soviet-occupied Hungary to the founder of Interactive Brokers. It highlights Peterffy's pioneering role in automating financial trading, his relentless engineering mindset, and his creation of a multi-billion-dollar enterprise defined by extreme operational efficiency.
Statements from this episode (24)
Thomas Peterffy is the 23rd richest person in the world
“Peterfi is the 23rd richest person in the world.”
Interactive Brokers is valued at over $100 billion
“His second act interactive brokers is worth over a hundred billion dollars.”
Seventy percent of Budapest was damaged during World War II
“70% of Budapest had been hit during the war, and Hungary desperately needed steel.”
Peterffy cut highway engineering calculation times from 20 minutes to 30 seconds
“What had taken 20 minutes by hand Now took 30 seconds.”
Peterffy says the most important people at his company are programmers
“I'm a computer programmer, and so are all the most important people in my company.”
Peterffy predicted in 1971 that automated systems would replace floor traders
“As soon as this electronic brain is hooked up to its voice box so it can answer the phone, staff will be able to go on a permanent vacation.”
Thomas Peterffy led a team of 80 financial programmers by 1976
“By 1976, he commanded a team of 80 programmers, one of the largest financial coding operations in the world.”
Peterffy built a partial differential equation to price options using computers
“Peterfi had used his computer to invent a partial differential equation that priced options based on variables, such as the underlying assets price, volatility, and the options time to expiration.”
Peterffy bought an American Stock Exchange seat for $36,000 in 1977
“So Petrfi is going to leave Jarecki and start on his own in 1977 with 200,000 dollars in savings. Peterfi left and bought a seat on the American stock exchange for 36,000 dollars.”
Peterffy lost half his capital in minutes on a suspected insider trade
“And so he actually loses half of his capital. He's trading his own money in a few minutes on a single bad trade that he is convinced was actually, or the result of insider trading.”
Peterffy hacked a Quotron wire with an oscilloscope for real-time market data
“He essentially hacked the system, cutting the wire and attaching the oscilloscope.”
Peterffy hired female floor traders to bypass exchange specialists who ignored him
“He hired six tall, beautiful women to trade for him. The specialists who had ignored his bids suddenly fought to fill his new employees' trades.”
Thomas Peterffy invented the first handheld trading computer in 1983
“In 1983, 27 years before Steve Jobs unveiled the iPad. Peterfi invented the first handheld trading computer.”
The CBOE banned analytical devices on trading floors in response to Peterffy
“They actually passed a rule that analytical devices may not be used on the trading floors, Peterfi said.”
Peterffy coded colored light displays to bypass NYSE floor screen rules
“On Monday morning, he rewrote the code, creating a psychedelic light show that his traders could read from across the room and put on that giant screen that's 30 feet from the action.”
Peterffy built Wall Street's first fully automated trading system in 1987
“In 1987, Peterfi achieved what he had first dreamed of in 1971, so that's 16 years of trial and error. The first fully automated trading system in Wall Street history. His machines could now place trades without human intervention.”
Timber Hill generated $25 million in 1987 and $50 million in 1988
“Timber Hill made twenty-five million dollars that year, and fifty million dollars the following year.”
Peterffy rejected a $900 million Goldman Sachs offer, demanding $3 billion
“Goldman Sachs made repeated acquisition offers that climbed to as high as nine hundred million dollars. Peterfee turned them all down. When pressed for his price, he said three billion dollars, a quiet way of ending the conversation.”
Mid-2000s market makers spent hundreds of millions to shave microseconds
“By the mid-two thousand, market makers like Citadel were spending hundreds of millions of dollars on microwave towers and fiber optic cables in a bid to shave microseconds off execution times.”
Peterffy owned nearly 100% of Interactive Brokers prior to IPO
“The IPO wasn't about raising capital. He owned close to a hundred percent of the business having built it with Timber Hills cashflow.”
Peterffy saved $80 million in banking fees through a Dutch auction IPO
“Rather than pay the substantial fees demanded by investment banks, he chose a Dutch auction and hired an obscure firm to list 10% of his business. This saved him eighty million dollars.”
Interactive Brokers generated $3.7B profit on $5.2B revenue in 2024
“A pure play brokerage with four million customers, over seven hundred billion in client assets, and just 3000 employees, most of them engineers. In 2024, it generated 3.7 billion in profits on 5.2 billion in revenue. The company he took public at a twelve bill…”