Virtu
- Thread starter TraDaToR
- Start date
If the figures in the article are correct, this would be the result:
I can understand why nobody wants to by the stocks of Virtu. Looks like a hyped stock.
Profits are microscopic small as they speak about millions of transactions every day. Watch the average profit at 5 mio transactions a day. If it is a real moneymaking machine I would never sell any stocks of Virtu; would keep all of them. Why give away billions?
A lot of room in both directions, but that's the problem. A very small negative change will wipe out all profits. A small positive change can make profits explode. Makes me think about penny stocks.
I can understand why nobody wants to by the stocks of Virtu. Looks like a hyped stock.
Profits are microscopic small as they speak about millions of transactions every day. Watch the average profit at 5 mio transactions a day. If it is a real moneymaking machine I would never sell any stocks of Virtu; would keep all of them. Why give away billions?
A lot of room in both directions, but that's the problem. A very small negative change will wipe out all profits. A small positive change can make profits explode. Makes me think about penny stocks.
I think you're leaving out two very huge parts-
1) Liquidity rebates
2) It's RISK FREE. They literally CAN'T LOSE MONEY.
2) is clearly false, as conclusively demonstrated by KCG...
That was human error.
Virtu has one down day in 8 years...and that was due to human error.
They CANNOT lose money.
All electronic trading firms have a glitch. How much it costs them varies.
Well, there you have it then... Human error is therefore one of the risks of the biz. It ain't the only one.
Free. Your. Mind...
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What I found on internet:
- Profit per transaction is almost zero.
- Margin on turnover is almost zero. The bigger the margin the more room for recovering from accidents. The slightest problem will drastically change the performance. There is no room for error.
Virtu cannot lose?
LTCM was going to change the world too. They did it indeed, but not the way it was supposed to go.
Since the high of the year the stock lost 35% of it's value and is making now new lows. Why if Virtu is a sure cash cow? Why did the initial investors go public? If you have a real cash cow you go public when growth is slowing down and most of the potential value is already taken.