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http://blogs.barrons.com/focusonfunds/2015/08/24/high-frequency-trading-firms-just-made-a-killing/

Virtu Financial (VIRT), the high-speed trading firm that went public earlier this year, was one of the few stocks on the market to log gains on Monday while the S&P 500 dropped nearly 4%. Indeed, Virtu, which claims not to have posted a daily loss in years, just had one of its most profitable trading days in history.

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    $\begingroup$ May I ask why is there a downvote? What is wrong with the question? Should I repost this question on "Personal Finance"? $\endgroup$
    – curious
    Aug 28, 2015 at 0:55
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    $\begingroup$ The article you link to is truly terrible journalism. I extends the returns of a single trading firm to all high-frequency firms many of which probably lost money on that day. It said that particular company made a killing without referencing it's actual returns on that day but rather the returns of the stock. I didn't downvote but an answer to your question would require someone from Virtu to come on to this site. $\endgroup$
    – rhaskett
    Aug 28, 2015 at 18:04
  • $\begingroup$ quant.stackexchange.com/q/3041/1764 $\endgroup$
    – pyCthon
    Aug 28, 2015 at 21:07
  • $\begingroup$ Plenty of HFT shops lose money and close each year. Only those with the biggest capital can wear out the small guys. $\endgroup$
    – Tony
    Jul 28, 2016 at 9:58

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On aggregate, large shops like Virtu are involved in market making strategies. There's various classes of market making strategies, and it is unnecessary to distinguish further here for the purpose of answering your question. For your curiosity however, Virtu is especially known for pure arb market making strategies.

Without diving into technical explanation, the easiest economic intuition to understand is that a market maker is acting as a price intermediator and looks to hold on to risk temporarily for their "customers" and to transfer risk to its natural sink. (Note: A market maker generally doesn't actually have a direct customer relationship but the market matches them to other participants in what amounts to a provider-client relationship effectively).

There is significant volatility on a day like Aug 24, 2015, which means significant pricing uncertainty. If there is greater pricing uncertainty, you can guess that there is greater "customer" demand for price intermediation.

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hft is in general a sure bet simply because , by definition, they get their orders in faster than anyone else, with minimal transactions costs... (except other hft'ers!). so, there is virtually no risk in the trades they do

i would not expect any hfters to lose money ever, except if they have a bug in their algos, ir they are actually taking risks

the faster the market moves, the more money hfters wohld make per trade.

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