Virtu Financial is an American company that provides financial services, trading products and market making services. Virtu provides product suite including offerings in execution, liquidity sourcing, analytics and broker-neutral, multi-dealer platforms in workflow technology and two-sided quotations and trades in

equities In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...

commodities In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...

, currencies, options,

fixed income Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year and repay the prin ...

, and other

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

on over 230 exchanges, markets, and

dark pool In finance, a dark pool (also black pool) is a private forum (alternative trading system or ATS) for trading securities, derivatives, and other financial instruments. Virtu uses proprietary technology to trade large volumes of securities. The company went public on the Nasdaq in 2015.

Organization

Based in

New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...

, Virtu was founded by

Vincent Viola Vincent "Vinnie" Viola (born 1956) is an American billionaire businessman and U.S. Army veteran. He was for several weeks President Donald Trump's nominee for United States Secretary of the Army, before withdrawing from consideration. He is the ...

, a former chairman of the

New York Mercantile Exchange The New York Mercantile Exchange (NYMEX) is a commodity futures exchange owned and operated by CME Group of Chicago. NYMEX is located at One North End Avenue in Brookfield Place in the Battery Park City section of Manhattan, New York City. T ...

and current owner of the

Florida Panthers The Florida Panthers are a professional ice hockey team based in the Miami metropolitan area. They compete in the National Hockey League (NHL) as a member of the Atlantic Division in the Eastern Conference, and initially played their home g ...

.Man Vs. Machine: Seven Major Players in High-Frequency Trading
CNBC, September 13, 2010 Douglas Cifu, Virtu’s CEO since October 2013, co-founded Virtu with Viola in 2008. Cifu is also a co-owner of the Florida Panthers with Viola and serves as the Panthers’ alternate governor. Prior to co-founding Virtu, Cifu was a partner at the international law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP, where he practiced corporate law from 1990 to 2008. The company suggested standards for electronic firms that call themselves

market maker A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the '' bid–ask spread'', or ''turn.'' The benefit to the firm is that ...

. Virtu believes market makers should be obligated to quote at or near the inside of the

national best bid and offer National Best Bid and Offer (NBBO) is a regulation by the United States Securities and Exchange Commission that requires brokers to execute customer trades at the best available (lowest) ask price when buying securities, and the best available (h ...

throughout the day and quote at various price points in a number of different securities. Virtu was ranked as one of the five largest high-frequency traders of equities in Europe in 2011. In November 2014, Reuters reported that Chris Concannon, president and

chief operating officer A chief operating officer or chief operations officer, also called a COO, is one of the highest-ranking executive positions in an organization, composing part of the " C-suite". The COO is usually the second-in-command at the firm, especially if ...

at Virtu Financial, will succeed William O'Brien as president of

BATS Global Markets Bats Global Markets is a global stock exchange operator based in Lenexa, Kansas, with additional offices in London, New York, Chicago, and Singapore. Bats was founded in June 2005, became operator of a licensed U.S. stock exchange in 2008 and o ...

, a trading venue that was founded by high-frequency traders. Virtu has offices in

(headquarters),

Austin Austin is the capital city of the U.S. state of Texas, as well as the seat and largest city of Travis County, with portions extending into Hays and Williamson counties. Incorporated on December 27, 1839, it is the 11th-most-populous city ...

Los Angeles Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world ...

Boston Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = List of sovereign states, Count ...

London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...

Sydney Sydney ( ) is the capital city of the state of New South Wales, and the most populous city in both Australia and Oceania. Located on Australia's east coast, the metropolis surrounds Sydney Harbour and extends about towards the Blue Mounta ...

Dublin Dublin (; , or ) is the capital and largest city of Ireland. On a bay at the mouth of the River Liffey, it is in the province of Leinster, bordered on the south by the Dublin Mountains, a part of the Wicklow Mountains range. At the 2016 ...

, and

Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...

. It expanded its European headquarters to

in September, 2013. Virtu Financial Ireland Limited is regulated by the

Central Bank of Ireland The Central Bank of Ireland ( ga, Banc Ceannais na hÉireann) is Ireland's central bank, and as such part of the European System of Central Banks (ESCB). It is the country's financial services regulator for most categories of financial firms ...

Company history: mergers and acquisitions, partnerships, and other company moves

In May 2011, Virtu merged with

proprietary trading Proprietary trading (also known as prop trading) occurs when a trader trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments with the firm's own money (instead of using depositors' money) in order to ma ...

firm Madison Tyler based in

Santa Monica, California Santa Monica (; Spanish: ''Santa Mónica'') is a city in Los Angeles County, situated along Santa Monica Bay on California's South Coast. Santa Monica's 2020 U.S. Census population was 93,076. Santa Monica is a popular resort town, owing to ...

with the backing of

Silver Lake Partners Silver Lake is an American global private equity firm focused on investments in technology, technology-enabled and related industries. Founded in 1999, the firm is one of the largest technology investors in the world. Its investment holdings hav ...

, a technology focused private equity firm. Vincent Viola co-founded Madison Tyler with David Salomon, a former arbitrage trader at

Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Ho ...

. Virtu acquired a market-making unit that handles NYSE Amex stocks from Cohen Capital Group LLC in December 2011. The purchase made Virtu the largest overseer of trading in shares listed on Amex, known as the

American Stock Exchange NYSE American, formerly known as the American Stock Exchange (AMEX), and more recently as NYSE MKT, is an American stock exchange situated in New York City. AMEX was previously a mutual organization, owned by its members. Until 1953, it was know ...

before NYSE Euronext bought it for $260 million in 2008. The deal gave Virtu a designated market-maker license for

New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...

companies. With the acquisition, some of the companies Virtu was able to trade and support included New Gold Inc., Northern Oil & Gas Inc., and the American depositary receipts of British American Tobacco Plc. In September 2012, Virtu acquired the

exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout th ...

(ETF) market maker assets of Nyenburgh Holding B.V., a high-frequency trader in European ETFs. In April 2017, Virtu agreed to pay US$1.4 billion in cash to purchase rival market making firm KCG Holdings. This acquisition was completed on July 20, 2017. In November 2018, Virtu announced an approximately US$1 billion deal to acquire agency brokerage and financial markets technology firm

Investment Technology Group Investment Technology Group, Inc. was a United States-based multinational agency brokerage and financial markets technology firm aimed at a hedge fund and asset management clientele. One of the first suppliers of electronic trading services, IT ...

. This acquisition was completed on March 1, 2019. In November 2021, Virtu launched a new electronic

swaptions A swaption is an option granting its owner the right but not the obligation to enter into an underlying swap. Although options can be traded on a variety of swaps, the term "swaption" typically refers to options on interest rate swaps. Types o ...

workflow on its RFQ hub. In May 2022, Virtu ITG Europe joined the

SIX Swiss Exchange SIX Swiss Exchange (formerly SWX Swiss Exchange), based in Zurich, is Switzerland's principal stock exchange (the other being Berne eXchange). SIX Swiss Exchange also trades other securities such as Swiss government bonds and derivatives suc ...

IPO

Virtu Financial initially planned to go public in the first week of April 2014, then postponed its

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...

by at least a week. At the time, prospective investors advised to wait and "let the storm pass", a reference to recent scrutiny concerning HFT practices. Later in April 2014, the company decided to ultimately postpone the IPO without specifying a new date. In its IPO plans, Virtu sought a valuation of about $3 billion. The IPO had been reported to make Vincent Viola the first high-frequency trading billionaire. While Virtu declined to comment, Reuters reported in November 2014 that sources say Virtu Financial hopes to go public in the spring of 2015. On April 15, 2015 Virtu Financial successfully priced its IPO which began trading on NASDAQ on April 16, 2015. On November 12, 2015, Virtu Financial Inc priced a secondary public offering of its Class A common stock by Virtu and certain selling stockholders affiliated with Silver Lake Partners.

Trading activity

Virtu operates on more than 235 exchanges, markets and dark pools in 36 countries. Some of these exchanges include NYSE Euronext,

NASDAQ The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...

and the

Chicago Mercantile Exchange The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc", or "the Merc") is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an ...

. The company is
designated market maker
on the

NYSE The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...

and NYSE Amex. Virtu makes markets by providing passive quotations to buyers and sellers in more than 12,000 securities and other financial instruments. On August 28, 2014, Virtu Financial, along with London-based GSA Capital, executed the first trades on ParFX Prime, a foreign exchange trading platform. Unlike most exchanges and trading venues, ParFX's matching engine does not adhere to the principle of price-time priority. Instead, ParFX subjects all orders to random pauses of about 20 to 80 milliseconds, trying to provide a more level playing field. When filing for its IPO in March 2014, it was disclosed that during five years Virtu Financial made a profit 1,277 out of 1,278 days, losing money just one day. Gregory Laughlin, astrophysicist and department chairman at the

University of California, Santa Cruz The University of California, Santa Cruz (UC Santa Cruz or UCSC) is a public land-grant research university in Santa Cruz, California. It is one of the ten campuses in the University of California system. Located on Monterey Bay, on the ed ...

, researched Virtu's trading activity. In the debate about its near-perfect trading record, Virtu said that it wins 51 percent or 52 percent of its trades, leading most people to figure the remainder are losses. In his research, Laughlin showed that "the number of its trades that break even are about the same as its losses", indicating Virtu assumes little

market risk Market risk is the risk of losses in positions arising from movements in market variables like prices and volatility. There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the most ...

Investigations

In April 2014,

New York Attorney General The attorney general of New York is the chief legal officer of the U.S. state of New York and head of the Department of Law of the state government. The office has been in existence in some form since 1626, under the Dutch colonial government o ...

Eric Schneiderman Eric Tradd Schneiderman (born December 31, 1954) is an American lawyer and politician who served as the 65th Attorney General of New York from 2011 until his resignation in May 2018. Schneiderman, a member of the Democratic Party, spent ten year ...

sent Virtu a letter seeking information on its HFT practices, asking about special arrangements with dark pools and exchanges, the company's trading strategies and whether Virtu practices latency arbitrage, a high-frequency activity. In July 2014, the

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

(SEC) sought information on ten HFT firms with broker-dealer licenses, including Virtu Financial, as part of an ongoing investigation into predatory trading strategies. The SEC's probe focuses on abuse of order types and abusive trading like

layering Layering has evolved as a common means of vegetative propagation of numerous species in natural environments. Layering is also utilized by horticulturists to propagate desirable plants. Natural layering typically occurs when a branch touches ...

or spoofing, a tactic intended to trick

investors An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...

into buying or selling a stock at unfavorable prices. A settlement was announced in 2017. John McCrank of Reuters noted that scrutiny around high-frequency trading intensified after the release of Michael Lewis' best-selling book '' Flash Boys: A Wall Street Revolt'' in March 2014.

References

External links

* {{NASDAQ Financial-100 Financial services companies based in New York City Financial services companies established in 2008 American companies established in 2008 2008 establishments in New York (state) 2015 initial public offerings Publicly traded companies based in New York City