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.
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.
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!
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
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
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!
RSS Feed