This page has been archived and commenting is disabled.

The Holy Grail Of Trading Has Been Found: HFT Firm Reveals 1 Losing Trading Day In 1238 Days Of Trading

Tyler Durden's picture




 

Think JPM's zero trading day losses in 2013 was impressive? Prepare to have your mind blown. The chart below shows the chart of daily net trading income by High Frequency Trading titan Virtu, taken from its just filed IPO prospectus. The punchline: in 4 years of trading Virtu has had one, one, day in which it lost money.

From the S-1: "The chart below illustrates our daily Adjusted Net Trading Income from January 1, 2009 through December 31, 2013. As a result of our real-time risk management strategy and technology, we had only one losing trading day during the period depicted, a total of 1,238 trading days. "

Let that sink in: one trading loss day and 1237 days of profits. And that, ladies and gentlemen, is the Holy Grail of the New Normal broken, manipulated markets.

How is this statistical anomaly possible? For those who have been following our narrative on the market-manipulating, endless crime that is HFT will know all too well. When you have a "strategy" whose only mission is to frontrun order flow, and scalp pennies from every market order - that would be billions of market orders in a period of four years - there is no risk, as confirmed by the chart above. Furthermore, since all HFT really does is accentuate momentum but making the bid chase NBBO ever higher, in a market that is manipulated top down by the Fed itself, all HFTs really do is simply enable the Fed's policy at the micro level, and thus such crimes are not only ignored, but welcomed by the New Normal overlords.

It also explains why fundamentals haven't mattered in years - the only thing that does matter is to quickly open one's own HFT stop, frontrun as much order flow as possible, and scalp pennies ahead of the bid and ask... billions and billions of times, leading to the statistically improbable chart pictured above.

This, ladies and gentlemen, is why retail has given up - when companies want to go public and no longer even hide the "secret sauce" which confirms beyond a reasonable doubt that there is a two-tier market: one in which the HFTs just never lose, and one for everyone else, well: who would want to play in a casino so explicitly rigged?

And while there are countless losers, there are also few winners: such as the billionaire founder of Virtu Vincent Viola, who was recently selling his NYC mansion for $114 million, who just made $270 million in 2013 adjusted EBITDA courtesy of the Virtu "can't lose" money machine.

* * *

There is one last thing to note - in 2013 Virtu made the least amount of trading days in its most successful bucket over the past 4 years, the $1.3-$1.5 million daily net income range, when "only" 57 days made that amount of money, compared to 85 in 2012 and 168 in 2009-2011. What stands out is that Virtu is increasingly making more money in the higher net income buckets. HFT by definition makes the most money on the low end of the distribution - the fact that it made increasingly more profits in the higher bucket indicates that the traditional strategy is no longer working, and instead Virtu has been making greater profits not thanks to its organic business model but because it has been taking market share away from other, less profitable firms. This works in the short-term but always fails over the longer run, especially if market volumes continue to collapse as they have for the past five years.

This also explains why the gigaHFT firm has finally stepped out of the shadows and its founder and equity owners are finally willing to cash out - the music is slowly ending. Even for those who have discovered the Holy Grail of the New Normal market.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 03/10/2014 - 18:07 | 4532292 Charles Nelson ...
Charles Nelson Reilly's picture

Gartman could keep up with it

/:s

Mon, 03/10/2014 - 18:11 | 4532308 BaBaBouy
BaBaBouy's picture

AND It's FUCKING LEGAL !!!!!!!!!!!!!!!!!!!!!!!!!!!! ?

Mon, 03/10/2014 - 18:27 | 4532384 DaddyO
DaddyO's picture

Ding, Ding Ding, we have a winner!!!

DaddyO

Mon, 03/10/2014 - 18:29 | 4532389 fonestar
fonestar's picture

Money for nothin' and your bits for free...

Mon, 03/10/2014 - 18:42 | 4532443 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Are sure you did not mean bitscoin?

Mon, 03/10/2014 - 18:48 | 4532455 johngaltfla
johngaltfla's picture

The real identity of the HFT firm has been revealed with the following symbol:

FED

Mon, 03/10/2014 - 19:03 | 4532463 Soul Glow
Soul Glow's picture

FED played by HAL

Open the pod bay door, HAL!

- Obama

Mon, 03/10/2014 - 19:06 | 4532516 negative rates
negative rates's picture

And I was responsible for that one, losing, day!

Mon, 03/10/2014 - 19:21 | 4532555 SafelyGraze
SafelyGraze's picture

I think I speak for all market participants when I say that I want all my trading to be conducted in a market where a proven winner like Virtu is operating

a market filled with hft's like that can only be a good thing for the human participants

 

Mon, 03/10/2014 - 19:32 | 4532584 johnQpublic
johnQpublic's picture

this is an ipo i will buy....like their business model

 

do i really need the tag?

Mon, 03/10/2014 - 19:47 | 4532628 National Blessing
National Blessing's picture

What we really need is negative interest rates.  Then the DOW would surpass 30,000.  Yipeee.  Bitches.

Mon, 03/10/2014 - 19:57 | 4532669 gmrpeabody
gmrpeabody's picture

Fuck the bastards, and anybody else who says they earned it...

(plz excuse my language..., they're starting to piss me off)

Mon, 03/10/2014 - 20:06 | 4532716 The Big Ching-aso
The Big Ching-aso's picture

I don't think even crime pays this well.

Mon, 03/10/2014 - 20:15 | 4532742 The Alarmist
The Alarmist's picture

One losing trading day ... Oh Boy! You mean I actually have a chance to win against these guys?  Sandbaggers!

Mon, 03/10/2014 - 23:42 | 4533460 James_Cole
James_Cole's picture

Vinnies house is a bit over the top, but you gotta admit the man works hard for his money. 

And talk about essential services, where would the world be without HFT? 

Tue, 03/11/2014 - 06:48 | 4533770 Harlequin001
Harlequin001's picture

Surely this can't be true. Didn't they have all the trades reversed on their 'one loss' trading day?

I reckon that when the investigation is over the SEC will fine Vincent at least $10,000 for this, and then he'll NEVER do it again will he?

Mon, 03/10/2014 - 19:35 | 4532595 rfaze
rfaze's picture

It's like someone taking $1 out of the pot on every hand in a poker game. If you play all night by morning they will have all the money.......

Mon, 03/10/2014 - 19:45 | 4532616 philipat
philipat's picture

When the crash comes, let's see how the immediate drying up of liquidity gets explained away?

Mon, 03/10/2014 - 20:25 | 4532772 The Alarmist
The Alarmist's picture

It's why the house makes you check your guns at the door.

Tue, 03/11/2014 - 08:31 | 4533894 J S Bach
J S Bach's picture

"It's like someone taking $1 out of the pot on every hand in a poker game. If you play all night by morning they will have all the money......."

 

Yeah, but you'd also end up with two broken thumbs by the end of the night.  When will these bastards get theirs broken - or better yet - their asses fried in the chair?

Mon, 03/10/2014 - 18:36 | 4532419 seek
seek's picture

For them. It's legal for them.

Trust me, if some day trader with a PC figured out a similar scheme, he'd be in jail. After a thorough debriefing, of course, one that was built into the plea bargain after the prosecution moved his sentence from multiple lifes down to 10 years -- no trial needed.

Mon, 03/10/2014 - 18:55 | 4532477 max2205
max2205's picture

Here's the model....

Call Benyellen at 6:30am....buy...then sell at 4:00pm

Mon, 03/10/2014 - 19:59 | 4532683 gmrpeabody
gmrpeabody's picture

"After a thorough debriefing, of course, one that was built into the plea bargain after the prosecution moved his sentence from multiple lifes down to 10 years -- no trial needed."

Martin Armstrong comes to mind...

Mon, 03/10/2014 - 21:44 | 4533095 Sterling Rod
Sterling Rod's picture

"Guys, we need to have one losing trading day so the regulators don't get suspicious".

I guess it worked.

Mon, 03/17/2014 - 11:19 | 4558645 ftsetrader
ftsetrader's picture

They're not alone with their resuts.  See here www.ftse100livetrading.com their results are outstanding and all witnessed everyday.

Mon, 03/10/2014 - 18:42 | 4532441 Catflappo
Catflappo's picture

Man - they really fucked up that day in 2012!   I imagine someone lost their job over that debacle.

Tue, 03/11/2014 - 09:47 | 4534046 Grinder74
Grinder74's picture

And why am I still paying penalties to the SEC for alleged and never proven "violations".

Mon, 03/10/2014 - 18:07 | 4532295 bania
bania's picture

Well, if they did 1238 days of profit, then i'd really be impressed.

Mon, 03/10/2014 - 18:40 | 4532426 Kirk2NCC1701
Kirk2NCC1701's picture

Screw "impressed".  If this is true, then never mind Gold or Bitcoin, or JPM, or...

The ONLY question you/I should have is: How do you get on board!?

Remember:  Clarity, Focus, Discipline.  Very difficuly in the US of ADD.

Mon, 03/10/2014 - 18:47 | 4532451 Hughmon
Hughmon's picture

Whose to say a similiar technique isn't being used on bitcoin exchanges.

Mon, 03/10/2014 - 18:07 | 4532296 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

I don't even blame them for not even trying to hide it anymore.  No one seems to care among the public or the regulators.

 

Might as well making is a selling point if you are the one selling the service.

Mon, 03/10/2014 - 18:15 | 4532325 Jayda1850
Jayda1850's picture

The more blatant the corruption becomes, the more it is accepted by the masses as normal status quo.

Mon, 03/10/2014 - 18:28 | 4532382 s-logic
s-logic's picture

Missing the point. The article says two things:

1. The onwer just sold his mansion for $113million.

2. The owner is selling his no-lose money machine.

Now, WHY would he do THAT? NOW?

Mon, 03/10/2014 - 18:38 | 4532427 seek
seek's picture

Present value is higher than future value. B-school 101.

Which tells you what we already know, that the future value of all this shit is heading into negatives any day/year/decade now.

Mon, 03/10/2014 - 22:02 | 4533155 bilbert
bilbert's picture

+1000

Everyone's talking about how the markets are rigged, but the big question is:

You've got a goose that lays golden fucking eggs.

You would take this goose public, WHY??

Are we possibly reaching escape velocity in the algo-chasing game?

 

 

Mon, 03/10/2014 - 22:15 | 4533207 BLOTTO
BLOTTO's picture

Its worse then the that...our whole life is rigged.

Tue, 03/11/2014 - 04:23 | 4533703 The Merovingian
The Merovingian's picture

Spot on.  +10,000

Further verification of your truth telling comes from exactly how many times this information has been 'put out there' by the MSM ... Zero.

Mon, 03/10/2014 - 18:30 | 4532393 walküre
walküre's picture

Consumers waste money on all kinds of shit that doesn't last. So why not let them spend on "investments" that don't give anything in return?

Rumor has it that Wall Street is applying to have charitable status. At least the losses could be written off as donations.

Mon, 03/10/2014 - 18:09 | 4532300 NFisher
NFisher's picture

Mention the sums for christs sake!

Mon, 03/10/2014 - 18:09 | 4532301 Seasmoke
Seasmoke's picture

If any day traders are still alive , they need to print this chart and tape it on their flat screen. 

Mon, 03/10/2014 - 18:19 | 4532350 NOTaREALmerican
NOTaREALmerican's picture

Re: If any day traders are still alive

There are, I'm working with some.   If they did tape it to their screens it would just prove to them that "there are lots of opportunites to make money in this market".

Mon, 03/10/2014 - 18:37 | 4532422 mrdenis
mrdenis's picture

It's different this time 

Mon, 03/10/2014 - 19:07 | 4532520 negative rates
negative rates's picture

No trouble there, but my nails are pain in the, well you know where.

Mon, 03/10/2014 - 18:09 | 4532302 unplugged
unplugged's picture

we are now living in the matrix - the machines are in control

Mon, 03/10/2014 - 18:16 | 4532333 balolalo
balolalo's picture

The PEOPLE who build and fund the machines are in control.  The markets have become an elaborate Wizard of Oz. 

Follow the yellow brick road and meet the wizard on wall street.  The real power is in who pushes the levers, not the lever. 

Mon, 03/10/2014 - 21:39 | 4533079 pavman
pavman's picture

Until the lever breaks.  Then its with the guy who can repair the lever. EnGiNe3rS BiTcH3Z!!!

Mon, 03/10/2014 - 18:10 | 4532305 RhoneGSM
RhoneGSM's picture

And they are going public, why?

Mon, 03/10/2014 - 18:11 | 4532309 A Lunatic
A Lunatic's picture

They ran out of gullible clients......

Mon, 03/10/2014 - 18:13 | 4532314 I am a Man I am...
I am a Man I am Forty's picture

Seriously, let's let someone else own this cash cow???

Mon, 03/10/2014 - 18:16 | 4532334 bonin006
bonin006's picture

Probably have competitors closing in on them, so close to end of the big profits, time to dump it on main street and move on to another scam.

Mon, 03/10/2014 - 18:41 | 4532437 walküre
walküre's picture

QE reduced, markets are harder and harder to scalp.

Mon, 03/10/2014 - 18:12 | 4532311 BurningFuld
BurningFuld's picture

This is just ONE BIG co-incidence.

Mon, 03/10/2014 - 18:24 | 4532372 sampo
sampo's picture

No.

This is far over happenstance.

Mon, 03/10/2014 - 18:18 | 4532321 One And Only
One And Only's picture

25 cent transaction fee for every order placed (cancelled or not) regardless of size or frequency.

Problem solved.

I trade frequently. I support this message.

Mon, 03/10/2014 - 18:41 | 4532439 Midnight Rider
Midnight Rider's picture

This is the answer.

Mon, 03/10/2014 - 18:56 | 4532479 11b40
11b40's picture

Unless you are a participant, a paid-off politician, or a regulator looking to cash in with a cushy indstry yob in a few years, this makes one sick.....and the answer you just posted is as plain as the nose on your face.  In addition to puting an end to this theft, it would also raise revenue.

Could there be ANY eveidence more clear that corruption has totally permeated our entire fianciual system?

Mon, 03/10/2014 - 19:59 | 4532686 object_orient
object_orient's picture

Who collects the fee?

What's to stop the fee collector from giving discounts/exceptions to large volume traders and passing the cost to retail?

What of dark pools?

Define "transaction."

 

There's always a way out. Too bad fair and honest people don't write and enforce the laws.

Mon, 03/10/2014 - 20:15 | 4532718 One And Only
One And Only's picture

"Who collects the fee?"

US government (or the exchanges can implement it) Hell, the Red Cross can collect it for all I care.

"What's to stop the fee collector from giving discounts/exceptions to large volume traders"

Re-read my comment "regardless of size or frequency" 

Define "transaction."

Re-read my comment.

I never said "transaction" I said order (canceled or not) If you cancel an order there is no "transaction" and you pony up .25. If you place the order...well you still pony up the .25. Why canceled orders...?

"The firm accumulated $1.4 million in profits by using the algorithm. Panther’s automated trading system entered 400,000 orders on CME’s electronic platform that were canceled 98 percent of the time and never intended to be completed." http://www.zerohedge.com/news/2013-07-23/watch-banned-hft-spoofing-algo-...

...because that shit is unnecessary and hurts markets.

Let's bring back a shred of decency to this market(s).

Wed, 03/12/2014 - 19:12 | 4540818 11b40
11b40's picture

Looks like there is 1 lone algo following along.

Mon, 03/10/2014 - 20:34 | 4532810 Mentaliusanything
Mentaliusanything's picture

Pay to play. Yes that would level the playing Field. Although it is obvious it has a snowball's chance in Hell of ever happening.

Tue, 03/11/2014 - 06:46 | 4533771 Salamanda
Salamanda's picture

That's actually a damn good idea One and Only

Mon, 03/10/2014 - 18:16 | 4532326 ShrNfr
ShrNfr's picture

So, if Virtu has a "sure thing", why are they trying to get their money out? I suspect that it has become less of a "sure thing" of late. Still profitable, but not as profitable.

Mon, 03/10/2014 - 18:16 | 4532328 Spungo
Spungo's picture

Hater's gonna hate.

Wed, 03/12/2014 - 14:15 | 4539591 Mediocritas
Mediocritas's picture

Scammers gotta scam.

Mon, 03/10/2014 - 18:16 | 4532330 Seasmoke
Seasmoke's picture

So, 2012 was a really bad year. 

Mon, 03/10/2014 - 19:09 | 4532532 negative rates
negative rates's picture

I wouldn't call it a, grand finale bad year, but a decent bad one.

Mon, 03/10/2014 - 19:11 | 4532533 negative rates
negative rates's picture

?

Mon, 03/10/2014 - 18:17 | 4532336 pragmatic hobo
pragmatic hobo's picture

did they say which day they lost money? and how? the way these guys work i can't see how they could possibly lose money?

Mon, 03/10/2014 - 19:03 | 4532506 Mr Pink
Mr Pink's picture

Hurricane Sandy...power outage..heat wave...servers overheated

Mon, 03/10/2014 - 19:14 | 4532543 negative rates
negative rates's picture

No, $400 trillion of their derivatives got called real quick like, they couldn't cover the big loss, but bought some time with cash, ergo, the losing day of trade. Lets see how well they do next month.  

Mon, 03/10/2014 - 20:59 | 4532937 Mrs. Haggy
Mrs. Haggy's picture

They tanked that day on purpose.  They didn't want the scam to look too obvious.

Mon, 03/10/2014 - 18:18 | 4532339 Milton Waddams
Milton Waddams's picture

Someone should tell these guys that they ought to lose with a little more frequency, if only for the sake of appearances. 

Mon, 03/10/2014 - 18:30 | 4532392 saints51
saints51's picture

Greed is a mother fucker!!!!

Mon, 03/10/2014 - 19:15 | 4532545 negative rates
negative rates's picture

Consequences bitches!

Tue, 03/11/2014 - 08:35 | 4533909 Vendetta
Vendetta's picture

the algo's can easily be modified to give the illusion of being non-manipulating

Mon, 03/10/2014 - 18:31 | 4532395 Van Halen
Van Halen's picture

You guys make Virtu's numbers into such a big deal.

Who hasn't done... anything at all 1237 times perfectly? Virtu just needs to do better. Duh.

 

Mon, 03/10/2014 - 18:43 | 4532445 walküre
walküre's picture

Obama's probably scored 1237 on the teleprompter reading contest

Mon, 03/10/2014 - 19:22 | 4532560 Wizard of Ozman
Wizard of Ozman's picture

I have jiggled my Meat way over 2000 times very sucsessfully, try to beat that Virtu. Lets just say I am not looking forward to my 2012 moment. TMI

Mon, 03/10/2014 - 18:32 | 4532401 goldhedge
goldhedge's picture

Lamp post meet rope.

 

Mon, 03/10/2014 - 18:32 | 4532402 i_call_you_my_base
i_call_you_my_base's picture

It's worth mentioning that you can't start your own HFT firm unless you have millions of dollars to colocate your servers alongside the exchange's machines. There is a high cost of entry to make money here. This is also why the exchanges love HFT and will never do anything about it.

Mon, 03/10/2014 - 18:35 | 4532413 blindman
blindman's picture

http://www.youtube.com/watch?v=pl9dc5FhFYU
Pink Floyd Comfortably Numb (Official Vídeo High Quality)

Mon, 03/10/2014 - 18:37 | 4532425 lesterbegood
lesterbegood's picture

It's all in the software....search PROMIS

Mon, 03/10/2014 - 18:41 | 4532428 D-Fens
D-Fens's picture

Look people it's a zero sum game.  HFT's scalp money from online day traders and muppets, and, you know what?  More power to them.

 

Back in the 90s or 00s, yes, you could kind of get mad at it but not anymore.  There are no excuses anymore for participation.

If just 10% of people who traded stocks took their money out permanently, the system would crash.

How many people have you guys talked to about the collapse, about getting gold, about getting out of stocks and retirement accounts and about preparing, and their eyes just roll over or they actually attack you?

It's these people that are being screwed by HFTs.  And it's well deserved, they have to be absolutely broke and selling their body on the street before they'll understand.

It's our job to just inform whoever we can, see what happens and get out of the way.  We aren't going to fix human stupidity, that's the one commodity that is in infinite abundance, and the HFT's know it.

Wed, 03/12/2014 - 14:18 | 4539610 Mediocritas
Mediocritas's picture

And when the "muppets" are forced to participate by a government that MANDATES participation? (Coming soon to the US, already enforced in many OECD nations).

What's going on here is not acceptable.

Mon, 03/10/2014 - 18:38 | 4532429 mrdenis
mrdenis's picture

How can they lose ,if they make a mistake ... trades are broken ..........

Mon, 03/10/2014 - 18:39 | 4532433 Surging Chaos
Surging Chaos's picture

Reason #2543 on why we don't have actual "markets". Pretty hard to even purposely lose money when the Fed IS the market.

Mon, 03/10/2014 - 18:40 | 4532435 ronron
ronron's picture

do you expect these guys to have grade a pussy cocaine and jack daniels? what they want costs more.

Mon, 03/10/2014 - 18:41 | 4532438 highwaytoserfdom
highwaytoserfdom's picture

yes but 177 k jobs   ah   1,300,00 dropped off the participation table   ahhhh 15 k part time H&R Block types, ahhhh 15 k more guberment ahhhh    Well you know the rest.. Imagine how bad this is going to turn out when  last century (YES old) Japan liquidated a few...

THIS IS SO CALLED "RESERVES"  taxpayer money... 

http://www.cftc.gov/MarketReports/BankParticipationReports/index.htm

 

something is smelling

like bubble a swelling

by the mafia ranks

of named  above banks

for gang led by Ms. Yellen

 

 

Mon, 03/10/2014 - 18:45 | 4532446 Atomizer
Atomizer's picture

JP Morgue. Dimon is the most amazing rock shimmering from the ruff.  

Mon, 03/10/2014 - 18:45 | 4532449 Yoki
Yoki's picture

nice evidence, will it make ur evening news, will it scramble every mathematician from china to Venus? 

 

oh wait let me present your overloads loosing streak: you

drinks are on me

Mon, 03/10/2014 - 18:49 | 4532458 Yoki
Yoki's picture

it makes u wonder about those two days with more then 5mil in the bag. ? was it when the market crashe?

Mon, 03/10/2014 - 18:53 | 4532469 starman
starman's picture

they didnt loose but they clients did! big!

Mon, 03/10/2014 - 18:54 | 4532474 ChargingHandle
ChargingHandle's picture

If you are not inside you are on the outside watching others make the paper. 

Mon, 03/10/2014 - 18:56 | 4532486 PhilofOz
PhilofOz's picture

For every winner there is a loser. Who the fuck would be stupid enough to continue playing this game against the likes of Virtu and JPM?!!

Mon, 03/10/2014 - 19:05 | 4532512 Lokking4AnEdge
Lokking4AnEdge's picture

I have been trading the markets for over 35 years, mainly futures and options. I can clearly say that if I have 3 winning days out of 10 I certainly have a good month, I have long learned to keep losses to a minimum and let the others run.

I don't blame Virtu for this situation-they found the loop and they use it-good for them. The soluton to make the system more equal is for the exchanges to charge 1 cent for every placed order and 3 cents for every filled...this will put us all on equal footing...

Oh well-that will never happen...the lobby is just too big and rich....

Mon, 03/10/2014 - 19:07 | 4532521 The Abstraction...
The Abstraction of Justice's picture

I think the issue is that these HFT plaforms are making sell orders, then capitalizing on their server and network speed to cancel those orders before anyone can take them, thus driving the prices down without having sold anything. The panic sellers then sell, and JP Morgan and their ilk on the buying side.

Mon, 03/10/2014 - 19:12 | 4532537 Yoki
Yoki's picture

Ii disagree, even if fees were leveled across the spectrum, you will always be slower then Algos

 

Tue, 03/11/2014 - 13:16 | 4534753 stopthejunk1
stopthejunk1's picture

If you are relying on speed to make money in the stock market, you are a fool and deserve to lose.

Tue, 03/11/2014 - 13:15 | 4534749 stopthejunk1
stopthejunk1's picture

Fees won't work, unless you are planning to charge a fee every time someone asks for a quote or makes an offer?  A thousand bids a second is half of the HFT game, and none of those are "orders."

 

Mon, 03/10/2014 - 19:15 | 4532547 babylon15
babylon15's picture

Look how much volume has collapsed.  Almost 10x as much volume in 2009 as 2013.

Mon, 03/10/2014 - 20:29 | 4532789 NDXTrader
NDXTrader's picture

The funny thing about that is the number of bids and asks are prob up 10 times. They just flash them in to move the market and get them out before they can be hit

Mon, 03/10/2014 - 19:37 | 4532605 q99x2
q99x2's picture

Movin movin keep dem doggies rollin.

Hope they get the stock exchanges migrated over to the bitcoin blockchain soon

Mon, 03/10/2014 - 19:40 | 4532609 falak pema
falak pema's picture

Marx must be rolling over in his grave. 

And the likes of Ayn Rand must be feeling they be the "useful idiots" of a sterile dream that has "HFT algo trail BURNout" written on its tombstone.

 

Mon, 03/10/2014 - 19:53 | 4532657 joego1
joego1's picture

This is exactly the reason I pulled out of the market just about 1238 days ago. They can all choke on their greed.

Mon, 03/10/2014 - 20:04 | 4532705 Cthonic
Cthonic's picture

Given all the changes to short selling beginning in 2008, I don't see how they can run this cotton gin in reverse.  Perhaps that's why they're putting it up for sale.

Mon, 03/10/2014 - 20:13 | 4532738 Quantum Nucleonics
Quantum Nucleonics's picture

What was the one day they lost money, how can the circumstances of that day be exploited to crush HFT, and who got fired for losing money that day??

Mon, 03/10/2014 - 22:05 | 4533173 medium giraffe
medium giraffe's picture

Millisecond trades using a forward news release service and a few million leveraged at 100:1.  Good luck in that battle.

Mon, 03/10/2014 - 20:27 | 4532777 NDXTrader
NDXTrader's picture

If I could front run every trade I would be pissed with these results. How the big mutual fund companies and pensions admins haven't gotten this crap shut down is beyond me. If a broker does this it's jail

Tue, 03/11/2014 - 04:08 | 4533698 messymerry
messymerry's picture

It's called payola dudeski.  It's dudeski now since we will all be speaking Russian shortly,,,

http://en.wiktionary.org/wiki/payola

;-D

Tue, 03/11/2014 - 08:08 | 4533848 Bogdog
Bogdog's picture

They are probably complicit in it for a cut of the action.

Mon, 03/10/2014 - 21:12 | 4532996 medium giraffe
medium giraffe's picture

Not so much 'trickle down' as 'vacuum up' economics.

Mon, 03/10/2014 - 21:31 | 4533048 El Hosel
El Hosel's picture

Makes sense, much easier to predict what a "Market" will do after the Federal Labotomy.... Its Yellen, Buy!

Mon, 03/10/2014 - 21:42 | 4533087 medium giraffe
medium giraffe's picture

Welcome to the suck.

Mon, 03/10/2014 - 21:56 | 4533127 arnoldsimage
arnoldsimage's picture

honey badger didn't have ANY losing days.

Mon, 03/10/2014 - 22:06 | 4533175 NEOSERF
NEOSERF's picture

m milliken was a piker.

Mon, 03/10/2014 - 22:06 | 4533178 bankonzhongguo
bankonzhongguo's picture

This is why this site is so good.

Real information with the right amount of wit and zip.

Where else would you discover this kind of story?

In the Nowheresville MSM?

Fuck those paper-hangin' propaganda slags.

 

Again.  A special "Thank You" to Tyler(s) one and all.

Mon, 03/10/2014 - 23:05 | 4533372 Josh Randall
Josh Randall's picture

The Onion is pretty good too fella, oh ya and SouthPark has good financial commentary

Tue, 03/11/2014 - 00:42 | 4533551 walküre
walküre's picture

"Haven't lost a Dime since 2009" ®

Tue, 03/11/2014 - 01:21 | 4533598 Bunga Bunga
Bunga Bunga's picture

Your gain is my loss. Not with me. Have fun with your 401k.

Tue, 03/11/2014 - 01:33 | 4533606 VWAndy
VWAndy's picture

Go long cooper stills. Cuz you gonna need a stiff drink.

Tue, 03/11/2014 - 05:29 | 4533727 Perfecthedge
Perfecthedge's picture

But....but.....you guys are missing the point.  On Virtu Financial's Website you can read:

"Virtu is not the stereotypical alpha-male, ego dominated Wall Street firm. We do not focus on organizational charts or titles, nor do we lift ourselves up by pushing others down. We are not driven by personal gain or attribution. We do not take shortcuts around the hard issues, nor are we afraid to stand alone on important matters"

(Culture)

It also says that they do work hard! So stop punishing these poor, hard working fellas.  I bet they have to enter that server room with hard hats.

Tue, 03/11/2014 - 06:53 | 4533778 Mediocritas
Mediocritas's picture

I propose that when this shit is finally recognized for the illegal front-running that it is, that the subsequent laws to shut it down are implemented retroactively (http://en.wikipedia.org/wiki/Ex_post_facto_law) and that fines be administered under the RICO Act "I didn't commit the crimes, I just told the computer to do it".

Given that this kind of success rate is statistically impossible without front-running or price manipulation to whip for stops (amongst other shenanegans), it's fair to say that almost all of the money made by these firms represents ill-gotten gains. If that sum is added up, how does it compare to the amount of money involved in cases officially launched by the SEC against insider-trading (for example)?

Anyone got a back-of-the-envelope number? 10,000 : 1?

Proliferation of for-profit trading venues caused this; some things should never be privatized.

Tue, 03/11/2014 - 07:21 | 4533803 Peter Pan
Peter Pan's picture

I want to know what happened on the day they lost money.

Mon, 03/31/2014 - 15:35 | 4611600 Jackagain
Jackagain's picture

That must have been on the day the flash crash happened. They didn't see that one coming...

Tue, 03/11/2014 - 13:11 | 4534709 stopthejunk1
stopthejunk1's picture

The zero-sum logic of "one in which the HFTs just never lose, and one for everyone else" does not make any sense.  As if you can't make money just because someone else is also making money?  How does that work?

 

If you are day-trading and getting hammered by HFTs, you deserve it.  Day-trading is gambling.  On the other hand, if you're buying stocks as an investment, maybe selling some calls against them for income, etc., -- in other words, if you are a conservative investor and not a greedy speculator, then HFT cannot and does not affect you.

The real complaint the author is making is not that greedy speculation accounts for most (individual) market transactions, but that his own greedy speculating no longer makes money because someone else has made a machine that is better at it.  Well, cry me a river.  Why don't you take up poker and move to Vegas?  The machines can't compete with you there.  And after all you are interested in gambling, not investing.

Tue, 03/11/2014 - 15:09 | 4535257 whidbey-2
whidbey-2's picture

The exchanges, SEC and NYState Atty General are all well aware of what is done in HFT and have apparently found nothing wrong with frontrunning. Exchanges make money, The Sec says No Intent to engage in illegal activity if one trades fast on the same information in the general market, and the NY Atty General says its all under review but probably more a Federal issue.   So..no crime committed as long as the taxes on the gains are reported and paid.  Oh yes, if the nitwit using a regular broker gets hurt it is not very much, let him or her use bonds.  You must learn to think NYC.  Bless your money sucker. It is not how large the misdeed in dollars that counts, but the "social costs (moral examples "), which are nil. A taking of information to make pennies is not even a "misdomeanor"  if your children ask.

Tue, 03/18/2014 - 10:27 | 4562916 Chippewa Partners
Chippewa Partners's picture

The West Pointers running Virtu are adding one more word to MacArthurs speech,"duty, honor, country, profits"!!!!

It is good work if you can get it.   Their profits DO make Michael Milkin's haul in 1986 look like a piker.

 

 

 

Do NOT follow this link or you will be banned from the site!