market makers

Simplex Trading: Against the Odds

“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.”Henry Ford On occasion, we have framed the world's leading proprietary trading firms with the following graphic: And, as many of you know, this is the terrain upon which we have focused a notable component of our attention to date - and likely where we will place a disproportionate share of our attention going forward. This is partly due to the fact that this group bears out-sized responsibility for a quiet cascade of impacts throughout the global markets ecosystem, and partly because there are so few others that have managed to marry such scale with such creativity. This dynamic is made more notable by the idea that winner-take-all market dynamics that tend to reinforce an "incumbency of incumbents" make such an ascension less likely than the previous unlikeliness from all the yesterdays before... That said, based on our ongoing surveillance of the broader landscape, there are always exceptions. If you watch [...]

By |2020-10-16T23:50:57-04:00October 16th, 2020|For Subscribers|

Virtu Financial: Master Exploder, Part I

"As you think, so shall you become." - Bruce Lee   Like a one-legged man in an ass kicking contest, sometimes the scenario is grim. And yet sometimes, the tailwinds converge in your favor - like a three-legged man in an ass kicking contest - and the scenario presents itself very much to the contrary... Historically, Alphacution has not been shy about pointing out the former. Who can forget "Virtu Financial: The Frying Pan and the Fire" from August 2019; a favorite of @Dougielarge, for sure? But, to give credit where credit is due, this story is quintessentially about the latter scenario: Today (May 7), Virtu Financial reported Q1 2020 earnings and, given an extra appetizer of preview from the company on March 20, it was - to borrow a riff from Tenacious D - "The. Best. Quarter. Ever. Period!" Now, it's no secret to anybody on the planet why a strong Q1 was to be expected from Virtu because nearly everyone on the planet is directly impacted by the [...]

By |2020-10-14T21:40:04-04:00May 7th, 2020|For Subscribers|

Gearing up for Jane Street

“Two roads diverged in a wood, and I—I took the one less traveled by, And that has made all the difference.” - Robert Frost   Jane Street is one of the most exciting players among the roster of proprietary market making firms in the entire trading ecosystem. What began in 2000 as Henry Capital, with memberships on the American Stock Exchange and Midwest Stock Exchange, today sports a broad global footprint and continues to solidify its legendary status among those that trade for their own account. As such, Jane Street is the subject of our next comprehensive case study to be published in the coming weeks. This post is an appetizer for that... Until next time...

By |2020-08-17T07:14:02-04:00March 10th, 2020|For Subscribers|