Michael Lewis thinks high-frequency traders are bad guys. But he also thinks that Brad Katsuyama is a good guy. And Brad Katsuyama thinks that, as bad guys go, Virtu Financial—which just happens to be planning an IPO—is pretty good. Which adds up to something, we’re sure, that Virtu would be happy to let you know about during its whistle-stop/barnstorming “we’re the best you’ve got” tour.

With its business model under fire and an initial public offering on the horizon, high-speed trading firm Virtu Financial Inc. has a message for investors: We’re the good guys.

New York-based Virtu, which operates in around 200 markets world-wide, is expected to launch a promotional tour for its offering by early next week to tout its record and defend its business, according to people familiar with the matter….

At the meetings with prospective investors, Virtu plans to emphasize that it provides increased liquidity to the market and lowers overall trading costs, according to a person familiar with its plans.

Virtu executives also intend to highlight their involvement with IEX Group Inc., an alternative trading venue that has marketed itself as a haven for large investors worried about being taken advantage of by lightning-fast trading firms….

IEX is featured in Mr. Lewis’s book as an example of a potential safeguard against the abuses by some firms. Virtu is a customer of IEX.

Brad Katsuyama, founder of IEX, said in an interview that Virtu was one of the “good high-frequency traders” based on its behavior on his platform.

“They are one of the few HFT firms trading on IEX and I think that says a lot about them and a lot about some of their competitors,” he said.

High-Speed Trading Firm Tries Charm Offensive [WSJ]

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  1. Posted by Day Trader | April 1, 2014 at 8:12 PM

    Amongst some of the HFT’s claims is “that we provide liquidity to the market”. I submit that many HFT Algos kill liquidity. I trade equities every day. No sooner do I submit a limit order, some HFT algo jumps ahead of my b .0001 cent. When I cancel my order the HFT algo cancels its own order. So the question is: was I providing liquidity or was the HFT. Clearly, it was my order providing the liquidity.

    On every business channel, the moderator should ask any and all HFT representatives the following question: “what is your highest VAR (value at risk) in any given 5, 10,15,30,60 minute time frame during the trading day”. Next question: what is your highest VAR overnight risk after the market closes. For the past month and for the past 12 months?

    I submit that their VAR risk is minimal. Therefore, their high speed algos are programmed to clip millions of nickels and dimes from legitimate orders coming into the markets. This is Insider Trading at its worst and they should be jailed.

  2. Posted by Peter Gibbons | April 2, 2014 at 8:31 AM

    William O'Brien: "Alright so when the sub routine compounds the interest is uses all these extra decimal places that just get rounded off. So we simplified the whole thing, we rounded them all down, drop the remainder into an account we opened."

    Michael Lewis: "So you're stealing?"

    William O'Brien: "Ah no, you don't understand. It's very complicated. It's uh it's aggregate, so I'm talking about fractions of a penny here. And over time they add up to a lot."

    Michael Lewis: "Oh okay. So you're gonna be making a lot of money, right?"

    William O'Brien: "Yeah."

    Michael Lewis: "Right. It's not yours?"

    William O'Brien: "Well it becomes ours."

    Michael Lewis: "How is that not stealing?"

    William O'Brien: [pause] "I don't think I'm explaining this very well."

  3. Posted by dan | April 2, 2014 at 12:26 PM

    who else fell Morgan Stanley stock price is too high now?

  4. Posted by Quant me maybe... | April 2, 2014 at 4:55 PM

    I find that thumb oddly disturbing.