Sorry, I don't get what this is all about... They're a mkt-maker, so why is there an expectation that there should be more losing days? Ah, of course, it's HeroZedge, so I am not too surprised at the breathless tone and the absence of logic...
Virtu is NOT a market maker, and HFT is not market making. It's legalized thievery. The SEC is either too stupid to figure out wtf is going on or paid to look the other way. It's all fine when the market goes up every month for 5 years, but when the music stops watch all the "liquidity providing" HFT algo's pull every bid from the market.
Hum, if you actually read their prospectus: "Virtu is a leading technology-enabled market maker and liquidity provider to the global financial markets. â So you are telling me that you know better than them what they are doing? Are you saying that their prospectus is misstating their business?
I'm saying HFT doesn't "provide liquidity" at all. Anyone who actively trades knows that. When 99.9% of all orders are flashed and canceled without being filled (and without ever having any intention of them getting filled) there is a major structural problem with the system.
Ah, HFT. I always love to read this post: Article from Zerohedge written by Dennis Dick of Bright Trading, LLC: My firm, Bright Trading LLC, recently provided comments to the SEC concerning a predatory trading practice that is compromising the NBBO. It is the practice of using undisplayed trading centers to step in front of displayed orders by an infinitesimally small amount. Today I was trading a very thin, illiquid stock where these predatory trading practices run rampant. I decided to document the sequence of events. Time & Sales Time Last Share (100 lots) Exchange 10:19:35 14.04 1 FINRA TRF 10:19:48 14.04 1 FINRA TRF 10:20:00 14.0399 1 FINRA TRF 10:20:14 14.0399 1 FINRA TRF 10:20:28 14.0399 1 FINRA TRF 10:20:43 14.0299 1 FINRA TRF 10:20:58 14.05 1 FINRA TRF 10:21:15 14.0399 1 FINRA TRF 10:21:31 14.0399 1 FINRA TRF 10:21:49 14.0299 1 FINRA TRF 10:22:06 14.0199 1 FINRA TRF 10:22:22 14.05 1 FINRA TRF 10:22:41 14.05 1 FINRA TRF 10:23:00 14.0499 1 FINRA TRF 10:23:18 14.05 1 FINRA TRF 10:23:37 14.05 1 FINRA TRF 10:23:57 14.05 1 FINRA TRF 10:24:15 14.05 1 FINRA TRF 10:24:36 14.05 1 FINRA TRF 10:24:56 14.0299 1 FINRA TRF 10:25:16 14.0299 1 FINRA TRF 10:25:34 14.03 1 NYSE 10:25:34 14.04 1 NYSE 10:25:37 14.0399 1 FINRA TRF 10:25:58 14.0299 1 FINRA TRF 10:26:20 14.0299 1 FINRA TRF 10:26:40 14.0199 1 FINRA TRF 10:27:02 14.0199 1 FINRA TRF 10:27:24 14.0299 1 FINRA TRF 10:27:44 14.0299 1 FINRA TRF 10:29:58 13.99 10 FINRA TRF Sequence of Events Time Event 10:19:34 I place an order to sell my 300 shares of RBS.PRE at $14.05 10:19:35 An algorithmic trader steps in front of my order at 14.04 (offering on NYSE exchange). 10:19:35 The stock trades at 14.04. The displayed 14.04 offer is not filled as the quote remains the same, despite the stock trading at that price. The trade was reported on FINRA TRF (FINRA Trade Reporting Facility). This means it was traded off the exchange. 10:19:48 Stock trades again at 14.04, reported on FINRA TRF, displayed offer is again not filled. 10:20:00 Stock trades at 14.0399, in front of displayed offer of 14.04. 10:20:14 Stock trades again at 14.0399, in front of displayed offer of 14.04. 10:20:18 Stock trades for a third time at 14.0399. Displayed seller is again not filled. 10:20:38 Frustrated, I move my ask price from 14.05 to 14.03. I am now the best offer. 10:20:43 Stock trades at 14.0299 in front of my 14.03 offer. 10:20:50 Frustrated, I cancel my order. The best displayed offer is now 14.05. 10:20:58 Stock trades at 14.05, but the displayed offer is again not filled. Trade is reported on FINRA TRF (off exchange). The displayed offer moves down to 14.04. 10:21:15 Stock trades at 14.0399 in front of displayed 14.04 offer. 10:21:31 Stock trades again at 14.0399 in front of displayed 14.04 offer. 10:21:41 I decide to try and offer my 300 shares again at 14.03. 10:21:49 Stock trades at 14.0299 in front of my displayed 14.03 offer. 10:21:55 Frustrated I move my offer down to 14.02. 10:22:06 Trade goes off in front of me again at 14.0199. 10:22:15 I move my offer back to 14.06. Another trader offers in front of me at 14.05. 10:22:22 - 14.05 trades 7 times, and 14.0499 trades once, but displayed offer is not 10:24:36 filled on any of these orders. 10:24:44 I move my offer down to 14.04. Other trader immediately steps in front of me and offers stock at 14.03. 10:24:56 and 10:25:16 14.0299 prints twice, displayed offer not filled again. 10:25:34 Displayed offer 14.03 gets filled, and I get filled on 100 shares at 14.04. Hallelujah!! 10:25:37 14.0399 trades in front of my remaining 200 shares offered at 14.04. Another trader places sell order at 14.03. 10:25:58 14.0299 trades in front of displayed 14.03 offer. 10:26:20 14.0299 trades in front of displayed 14.03 offer again. 10:26:39 I move my offer from 14.04 to 14.02. 10:26:40 14.0199 trades in front of my displayed 14.02 offer. 10:27:02 14.0199 trades in front of my displayed 14.02 offer again. 10:27:10 I move my offer back to 14.03. 10:27:24 14.0299 trades in front of my displayed 14.03 offer. 10:27:44 14.0299 trades in front of my displayed 14.03 offer again. 10:27:50 I give up and move onto another trade. Later I am filled at 14.03, and the stock proceeds to go higher (only reason I am filled). Who is this market participant stepping in front of my displayed offer? Who is this market participant intercepting the buy orders that are trying to take my displayed offer? Who is this market participant forcing me to pay the spread and hit the bid below? According to the implied exemption given under SEC rule 612, the only market participants capable of trading in sub-pennies are broker-dealers, to offer price improvement. Is this $0.0001 price improvement justification for compromising the displayed quote? This isnât an isolated event, these events happen continuously every day in this two-tiered market structure. This is a crime of epic proportions, and our regulators need to deal with this immediately.
Providing liquidity means buying below the market and selling above the market. Taking liquidity means buying the ask and selling the bid. Afiak, HFT don't trade passively with limit orders.
How do you know that this is specifically true of this particular firm? I mean I get the whole "HFT is evil" theme, but isn't this a case of guilty until proven innocent. Just because they have done well, while their competitors haven't, doesn't mean that they're the devil. I also don't get the point about the mkt going up every month... To me (and I ain't a great expert at this) two points suggest that they are, in fact, a mkt maker, as they claim to be. Firstly, their PNL pattern. Secondly, the simple fact that they're doing an IPO.
Didn't you trade May 6th 2010? That's the "market making" we can expect from these guys. Shutdown the machines if things get too hairy lol.
How many companies have one losing day in >1300 trading days? Before flash trading was legalized, I never heard of one single company that enjoyed that kind of wild streak. Now, it's a regular thing for all the big brokers - goldman, jpm, citi etc. Why do you suppose that is?