Two performances of this great song, first adorable young Morrissey, and then a sort of breathless old Morrissey. Long may it last, indeed.
The New Market Makers
Virtu Financial is a public company so you can read quite a bit of detail about the business in their SEC filings ... from the S-1:
"Historically, our competition has been registered market making firms ranging from sole proprietors with very limited resources to large, integrated broker-dealers. Today, a range of market participants may compete with us for revenues generated by market making activities across one or more asset classes and geographies, including large broker-dealers, such as Bank of America Merrill Lynch, Citigroup, Goldman, Sachs & Co., Morgan Stanley and UBS, and other participants, such as Citadel, DRW Holdings, Hudson River Trading, IMC, KCG Holdings, Optiver, Susquehanna, Timber Hill and Wolverine Trading. Some of our competitors in market making are larger than we are and have more captive order flow [emphasis mine] in certain assets. We believe that the high cost of developing a competitive technological framework is a significant barrier to entry by new market participants.
...
As a self-clearing member of the Depository Trust Company ("DTC"), we avoid paying clearing fees to third parties in our U.S. equities market making business. In addition, because of our significant scale, we are able to obtain competitive pricing for trade processing functions and other costs that we do not internalize. Our significant volumes frequently place us in the lowest cost tiers of brokerage, clearing and exchange fees for venues that provide tiered pricing structures. Our low-cost structure allows us to maintain a marginal cost per trade that we believe is favorable compared to our competitors. Our scale is further demonstrated by our headcount — as of June 30, 2015, we had only 148 employees.
...
Rebates consist of volume discounts, credits or payments received from exchanges or other market places related to the placement and/or removal of liquidity from the order flow in the marketplace. Rebates are recorded on an accrual basis and included net within brokerage, exchange and clearance fees in the accompanying condensed consolidated statements of comprehensive income."
An Authority and a Crank
Interesting, longish piece on Eric Scott Hunsader, a man whose products I've used for 20 straight years.
"In 1995, convinced that the Internet would upend trading, he quit a corporate job to write a program that displayed real-time stock and futures data online. In 1996, he sold that company to Quote.com, where he launched Livecharts, a real-time data visualization program, and QCharts, a trader workstation for Windows. When Lycos bought Quote.com in 1999, Hunsader cashed out, building the Winnetka, Ill., home where his family lives. He founded Nanex in 2000 ... Nanex stores about 4,600 days of data, going back to 2003. 'We are always buying more servers,' said Hunsader."
Tweets for February 16, 2016
A Life of Continual Consumption
The most revealing paragraph in Jiayang Fan's recent post, "The Golden Generation"
“The thing is, I’m not sure I’d fully fit in there [China] now,” she said slowly. “I lack my parents’ Chinese business know-how. Westerners are all about being straightforward and direct. But, when you negotiate a deal in China, it’s all about what’s unsaid, simultaneously hiding and hinting at what you really want. In China, I’m treated like a naïve child, and sometimes I feel like an alien.” Pam and many of her friends, having emigrated in their teens, exist between two cultures. Canadians, and the West generally, could be inscrutable. The cultural capital that their parents had hoped would be theirs was elusive. But having been away from China during years of dizzyingly rapid change made them foreigners there, too.
Tall White Mansions and Little Shacks
No good live version, so I'll embed the track from Merry Clayton's 1971 album ... a Neil Young song.
Tweets for February 15, 2016
Tweets for February 14, 2016
Tweets for February 13, 2016
ETF Trading Portfolio Update -- February 15, 2016
No changes this week. The Euro came very close to reversing, but didn't.