Bigsky Investments®
  • Home
  • Equity Research
  • Blog
  • On Watch
  • Market Data
    • Portfolio
  • 🌲

Long Term Investment Idea: VIRT (Virtu Financial)

5/6/2015

0 Comments

 
Picture
Imagine trading in and out of the market millions of times a day and never losing!
HFT giant Virtu Financial does just that. Their track record suggests that they have somehow cracked the code and are in possession of a little something we in the industry like to call: The Holy Grail.
Picture
Virtu has only had 1 losing trading day in 6 years!
These guys just reported their first earnings as a publicly traded company and boy do they ever rake in the dough!
Earlier this morning, Virtu Financial (VIRT 21.79), one of the world's largest High Frequency Trading (HFT) firms, reported earnings results for the first quarter of FY 2015. Results from the quarter included a 40.2% year/year increase in Adjusted Net Trading Income, its main source of revenue. This increase was driven primarily by increased market volumes and volatility in the Global Commodities and Global Currencies instruments, as well as strong performances by cash equity markets in Asia, Europe and the US.
VIRT makes markets in more than 11,000 financial instruments on more than 225 exchanges in 34 countries around the world. It averages ~5.3 mln trades per day globally. While just 49% of its overall positions are profitable, the company has had only one overall losing trading day during a period of 1,485 trading days (Since Jan 1, 2008). Additionally, its risk management system is designed to "lockdown," or freeze, upon detection of any trading strategy generating revenues in excess of its preset market making limits; this includes the predictive momentum and signal trading strategies many other trading firms engage in.
VIRT generates revenue primarily by performing market making activities, or buying and selling securities and earning small amounts of money on the bid/ask spread of a large volume of trades. All of its transactions are considered "market neutral," meaning they are independent of market direction and are not speculative.
Wrapping up, the company saw tremendous growth during the quarter on both the top and bottom line. Revenue growth was impressive, as previously mentioned, and Adjusted EBITDA Margin increased to 70.5% from 65.4% in 1Q14. However, because it's such a young IPO, analyst's have yet to initiate coverage on it. That said, VIRT's quiet period expires on May 12, so this may be one to keep an eye on is the coming week as analyst's and investors digest today's earnings announcement. 
Copyright (C) 2015 Briefing.com
Picture
This is still a very fresh IPO. There is a lot of controversy surrounding HFT role in the marketplace and whether it is beneficial or detrimental to the average investor. Regardless, the facts speak for themselves. VIRT is doing something right and I want in on a piece of the action. Virtu Financial is a company to own!
0 Comments



Leave a Reply.

    Picture

    R. J. Sullivan IV

    Equity Research
    Portfolio Management
    ​Trading

    Picture
    Picture

    Archives

    September 2019
    March 2019
    December 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    April 2018
    March 2018
    January 2018
    October 2017
    July 2017
    May 2017
    April 2017
    March 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    November 2013
    October 2013

    Categories

    All

    RSS Feed

© BIGSKY INVESTMENTS®​

DISCLAIMER: This is a personal web site, reflecting the opinions of its author(s). It is not a production of my employer, and it is unaffiliated with any FINRA broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities. DATA INFORMATION IS PROVIDED TO THE USERS "AS IS." NEITHER BIGSKY INVESTMENTS®, NOR ITS AFFILIATES, NOR ANY THIRD PARTY DATA PROVIDER MAKE ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND REGARDING THE DATA INFORMATION, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.