High-frequency trading company: Virtu Financial (VIRT) (2008)

Virtu Financial (NASDAQ:VIRT) was founded in 2008 and is headquartered in New York, USA. It has 560 full-time employees. The founder is Vincent Viola. The company also has offices in Texas, Dublin and Singapore. Virtu Financial is currently one of the largest high-frequency traders and market makers (High-Frequency Trading (HFT)), providing stocks, commodities, foreign exchange, options, fixed income and other securities trading that is dark pool quotes.

Virtu Financial

Virtu Financial (VIRT):

Virtu Financial is one of the largest high frequency trading (HFT) and market makers, providing double-sided quotes for stocks, commodities, currencies, options, fixed income products and other securities in more than 230 exchanges, markets and dark pools And transactions. Virtu uses a proprietary high-frequency trading strategy based on big data to trade a large number of securities. On March 10, 2014, Virtu Financial applied for an initial public offering, but repeatedly delayed the IPO. Finally, it successfully landed on Nasdaq on April 16, 2015, and on July 20, 2017, Virtu completed the acquisition of KCG Holdings Inc..

Wall Street has reported that in the 1,238 trading days from 2009 to 2013, Virtu Financial suffered losses for only one day. What is even more eye-catching is that according to Bloomberg data, in the 252 trading days in 2014, Virtu Financial once again set the record of “zero loss day”.

Virtu Financial said that such an impressive record is based on the company’s risk control strategy and technology. The American financial blog Zerohedge once pointed out that high-frequency trading actually uses the advantages of speed and system to conduct advanced transactions earlier than the market. Although each transaction makes little profit, when the daily transaction reaches several million times, the number will appear. Profits in the hundreds of millions, and this is basically risk-free.

Greg Laughlin, professor of astrophysics at the University of California, Santa Cruz (UC Santa Cruz), conducted academic research based on data provided by Virtu Financial and the Nasdaq, and concluded that Virtu Financial can continue to maintain such trading profitability, although the market has been Virtu Financial’s long-term profitability is skeptical.

Professor Laughlin believes that as long as the winning rate of each trade is more than 51%, it is almost impossible to lose money in the long run. If you trade 10,000 times a day, the profit probability of that day will reach 97.8%; if you trade 100,000 times a day, the profit probability will be close to 100%. Professor Laughlin pointed out that “Virtu Financial’s losses in one trading day should be caused by system errors or human errors.”

Virtu Financial is headquartered in New York, and its founder Vincent Viola was the chairman of the New York Mercantile Exchange. According to the British ” Financial Times ” report, Vincent Viola graduated from West Point Military Academy and was an Army Sergeant before joining the business world. He founded Virtu Financial in 2002. John Abizaid, a member of its board of directors, is also of military background and is a former commander of the US Central Command.

Virtu Financial (VIRT) investment:

Virtu Financial was listed on the US Nasdaq Stock Exchange (code: VIRT) on April 16, 2015. It issued 16.5 million shares, US stocks were US$19, and raised US$313.5 million. Goldman Sachs , Xiaomi , Sandler O’Neil, BMO Capital Markets, Citi , Credit Suisse , Evercore Partners and UBS are the joint underwriters of this listing. On the first day of listing, it rose 16.74% to $22.18. If calculated based on the closing price, the market value of Virtu Financia was $3.08 billion. As of the financial report on December 31, 2014, Virtu Financial’s book value of sales was $723 million.

In fact, in March 2014, Virtu Financial had submitted IPO documents to the SEC. However, due to the publication of the book “Flash Boys: A Wall Street Revolt” by Michael Lewis on introducing high-frequency trading, the company had to postpone the original timetable for listing.

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