High-speed trader Virtu expects Trump era to ‘normalise’ markets

Virtu Financial said it expected the “new pro-growth and pro-business” era under US president Donald Trump to return trading to a “normalised” environment, as it posted a drop in both fourth quarter and full year revenues.

Total revenues for the high frequency trading firm fell 3.5 per cent to $170.6m in the fourth quarter of 2016, compared to $176.9m over the same period in 2015. Adjusted net trading income also decreased 7 per cent in the fourth quarter to $100.3m, the company said on Thursday.

The declines capped off a shaky year for Virtu – whose stock lost nearly 30 per cent over 2016 – as historically low volumes and volatility in financial markets squeezed profits for HFT firms and exchanges across the board.

But Virtu chief executive Douglas Cifu said the fourth quarter was “really the tale of two very different quarters”. Volumes and volatility that was initially muted as in the previous quarter, was “upended” by the presidential election, he said, “with much more favorable market conditions…sustained throughout November and early December”.

Virtu’s founder, billionaire Vincent Viola, was nominated by Mr Trump as the US secretary of the army in December.

Mr Cifu said:

We believe with the new pro-growth and pro-business environment in Washington that the stage is set for return to a more normalized volume and volatility environment globally and we look forward to creating more value for our shareholders.

Total revenues fell 11.8 per cent to $702.3m in 2016, compared to $796.2m the previous year. Adjusted earnings, which exclude nonrecurring costs and charges associated with non-cash compensation, were 97 cents a share for the full year, down from $1.35 a share in 2015.