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Virtu trades 3 million shares a day, they are way out on the bell curve in terms of statistical significance. There are of course many risks to their business
by hidenotslide 9y ago
Virtu trades 3 million shares a day, they are way out on the bell curve in terms of statistical significance.
There are of course many risks to their business model, e.g. high fixed costs, competition, regulatory risk, technical malfunctions, etc.
They are "lucky" to be in a position to capitalize on the opportunity, but investment luck does not play a role on a day to day basis.
- mrchicity 9y agoVirtu trades far more than 3 million shares a day. They may even make 3 million trades a day. If you've seen a system like this in action, it's a beautiful thing to behold and cannot be mere luck. Transactions stream in constantly. It's not just one big, lucky bet, but thousands of tiny bets with a slight edge. A plot of profit & loss with respect to time looks like an almost perfectly smooth upward line. And if you're good, you can do this every single day for years and years. Still, I wouldn't say guys like that have beaten the market in a real way. I've certainly never felt like I did. This style of trading doesn't need outside capital and can't scale. If I gave you $100 and armed you with a scalping bot, I bet you could easily turn it into $200 buying hot tickets on Ticketmaster and reselling them. But would anyone call you a genius trader? Could you do it with a million? A billion? As a business net of all costs like employee compensation and technology, returns to owners are pretty lousy. Compare owning Virtu stock to an index fund since their IPO. Ouch.
- hidenotslide 9y agoYou are right, I miscopied from their website. 3 million trades, billions of shares daily. Whether market making is beating the market is mostly semantics, I was just responding to the guy who said they flipped heads 10 times and got lucky.