High-speed trader Virtu saw net income increase 1,845% thanks to anxious markets

Virtu trader

REUTERS/Brendan McDermid

A Specialist trader for Virtu Financial works at a booth on the floor of the New York Stock Exchange April 16, 2015.

  • High-speed stock trader Virtu Financial reported gangbuster results Friday, beating Wall Street's estimates by a mile.
  • The firm, which reported a net income increase of 1,845%, reported earnings of $1.86 per share. That's above Wall Street's estimate of $0.61.
  • A return of volumes and volatility to the markets was behind the impressive performance, chief executive Doug Cifu said.

Virtu Financial, the market making firm, reported eye-popping results on Friday for the first quarter of 2018, a period marked by a return of volatility and volume to the markets.

The New York-based firm, which reported earnings of $1.86 a share, said its net income increased 1,875%. Its total revenues popped 453% to $815 million. Its adjusted EPS was $0.76, a record since it became a public company.Advertisement

The acquisition of KCG, the trading firm it bought in 2017, gave its numbers a lift as did favorable market conditions, according to chief executive Doug Cifu.

"Our continued successful integration enabled this quarter's outstanding performance in this favorable environment," Cifu said. "The first quarter of 2018 saw the return of volume and volatility."

After spending more than a year in the doldrums, Wall Street saw anxiety storm the markets in the first quarter of 2018. Notably, the Cboe Volatility Index (VIX), a gauge for market anxiety, climbed over 50 for the first time since August 2015 in early February.

As liquidity providers, trading firms like Virtu are scanning the markets for opportunities in which buyers and sellers aren't matched up. But when volatility is too low, like it was for much of 2017 and early 2018, those opportunities are hard to come by because there are fewer price swings.