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by auntienomen 3258 days ago
OK, so gross-not-net, Virtu is making about $2M/day. The value traded on a typical day in US stock markets is north of $100 billion / day.

HFT is rounding error.

1 comments

> Virtu is making about $2M/day. The value traded on a typical day in US stock markets is north of $100 billion / day.

You can't estimate it that way as they don't win or profit on all their trades. At it's height HFT was estimated to responsible 15-25% of daily volume by best guesses (it's some what obfuscated.) I'd be surprised if it was less than 5% today. Not just Virtu of course - all players big and small.

Why does this change whether or not you can estimate it that way? The tick size in the US is at least $0.01 for reasonably priced names so it's completely unrealistic to expect an HFT to make money on every trade.

When people talk about making $0.0001 per share that's their ex-ante expectation. It accounts for the fact that you're not going to make money on every trade.