Paper is here I believe: http://faculty.haas.berkeley.edu/hender/NBBO.pdf. The 377k number is at the bottom of p. 10. Since he believes there's no capital at risk, the starting amount is unimportant.
This paper makes a lot of assumptions that don't make sense. He believes you can trade at the NBBO midpoint on dark pools whenever you please, both to enter and exit the trade. This is unlikely in reality. Midpoint orders are uncommon in wider names like AAPL and your fill rate would be really low. Pools can also segment who clients can interact with. If you are constantly picking off slow institutional orders and your trades have high short-term alpha, you will end up getting segmented out or banned entirely. Also many pools build their own NBBO from composite feeds these days.
Just as a sanity check, GETCO, who used to be one of the largest HFT firms (as far as I know they're still pretty large) made about $100mm in gross trading revenue last quarter in all asset classes. That's about $2mm a day for everything and they are in pretty much every market in the world. There's no way this strategy on one name makes almost half a million a day even in aggregate.
I could be wrong, but I don't think that's how settlement works. Making a market would be impractical from a capital perspective for any players. I would assume DTCC nets out its exposure to each clearing member, at the very least.
Just as a sanity check, GETCO, who used to be one of the largest HFT firms (as far as I know they're still pretty large) made about $100mm in gross trading revenue last quarter in all asset classes. That's about $2mm a day for everything and they are in pretty much every market in the world. There's no way this strategy on one name makes almost half a million a day even in aggregate.