Virtu Americas

Now You See Me: What The Bloomberg Opinion Guy Misses About Market Structure Mechanics

Leveraging numbers and narrative, Alphacution builds a higher-dimension analysis of market structure mechanics on top of Bloomberg Opinion's Matt Levine's recent manifesto on payment for order flow (PFOF). Disclaimer: No unsolicited elbows were thrown during the creation of this Feed post...

By |2021-03-04T19:37:16-05:00February 22nd, 2021|For Subscribers|

Pennies and Locomotives: Hypothesis for Virtu’s Next Acquisition

"Words ought to be a little wild, for they are the assault of thoughts on the unthinking."John Maynard Keynes Back in the day, we called it picking up pennies in front of locomotives. Today, that locomotive is one nasty beast... Virtu is having a banner year in 2020, with 9-month net trading income (NTI) at an all-time high of nearly $2 billion. Virtu also appears to be well-positioned to benefit from periods of heightened volatility and volume in its core US cash equity strategy going forward. In other words, there is no specific need for Virtu to do anything dramatic. So, our hypothesis here is this: If there was a dramatic move to be made by Virtu that would cause a material uptick in growth potential, what could it be? Note: If you haven't already done so, our recent Feed post, "Trading Strategy Secrets: Hiding in Plain Sight" is worth reading as a detailed setup for this post... Right out of the gate it needs to be said that we [...]

By |2021-02-03T12:09:07-05:00November 13th, 2020|For Subscribers|

Trading Strategy Secrets: Hiding in Plain Sight

"Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom."Viktor Frankl Alphacution's exploration to tease insight from the available data - to make the data dance - continues to expand. Sometimes this is due to weaving a new and unfamiliar data source. And, sometimes it's due to seeing something entirely new in a familiar dataset. A challenge in the process is the growing sense that we can never quite tell all the fascinating nuggets of the stories we discover. Be that as it may, the fact that data can be electrified to dance about the most consequential and mythological players in the capital markets ecosystem after they have expended so much energy to remain secretive makes this journey that much more thrilling. What follows here is a concentrated example of our expanding capabilities... Today's story takes advantage of Virtu Financial's latest Q3 2020 earnings-related data dump. Virtu is a regular topic on the [...]

By |2020-11-17T18:09:30-05:00November 11th, 2020|For Subscribers|

Robinhood: Q3 Order Routing Revenue Continues to Break Records

"Do not go where the path may lead, go instead where there is no path and leave a trail."Ralph Waldo Emerson The juggernaut that is the Robinhood commission-free trading app has accumulated some dents and bruises over the year, along with a number of truly breathtaking successes. One of the more overexposed stories in a year engorged with superlatives, system outages, a customer suicide and, most recently, the hacking of thousands of accounts has challenged Robinhood's meteoric rise along the way. Together, these headwinds have delayed Alphacution's prediction of the timing of an oncoming IPO. All that said, one aspect of the Robinhood juggernaut - certainly among the more important aspects to its key stakeholders - is persistent growth in order routing revenue; the largest component of total revenue. After two quarters of blockbuster, pandemic-fueled numbers showcasing the inner workings of Robinhood's order flow firehose, the Q3 2020 order routing figures have recently been made public. The headline is that after the second quarter's monstrous $180.3 million in payments for [...]

By |2020-11-02T22:38:42-05:00November 2nd, 2020|For Subscribers|