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.

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Charles Nelson Reilly's picture

Gartman could keep up with it


BaBaBouy's picture

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

DaddyO's picture

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


fonestar's picture

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

fxrxexexdxoxmx's picture

Are sure you did not mean bitscoin?

johngaltfla's picture

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


Soul Glow's picture

FED played by HAL

Open the pod bay door, HAL!

- Obama

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


johnQpublic's picture

this is an ipo i will their business model


do i really need the tag?

National Blessing's picture

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

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)

The Big Ching-aso's picture

I don't think even crime pays this well.

The Alarmist's picture

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

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? 

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?

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.......

philipat's picture

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

The Alarmist's picture

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

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?

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.

max2205's picture

Here's the model....

Call Benyellen at sell at 4:00pm

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...

Sterling Rod's picture

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

I guess it worked.

ftsetrader's picture

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

Catflappo's picture

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

Grinder74's picture

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

bania's picture

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

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.

Hughmon's picture

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

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.

Jayda1850's picture

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

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?

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.

bilbert's picture


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?



BLOTTO's picture

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

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.

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.

NFisher's picture

Mention the sums for christs sake!

Seasmoke's picture

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

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".

unplugged's picture

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

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. 

pavman's picture

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

RhoneGSM's picture

And they are going public, why?

A Lunatic's picture

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

I am a Man I am Forty's picture

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

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.

walküre's picture

QE reduced, markets are harder and harder to scalp.

BurningFuld's picture

This is just ONE BIG co-incidence.