Monday, February 24, 2014

Signposts: As Retail Investors Return to Day Trading, Major HFT Files for IPO

First up, the Wall Street Journal:

Small Investors Jump Back Into the Trading Game
Traders Ramp Up Activity at Discount Brokerages
Cleveland disc jockey Stephen Prewitt, 29, bought his first stock on Jan. 15 after practicing with a simulated 
portfolio last year. Billy Delfs for The Wall Street Journal
Small investors are diving back into stock trading, driving business at some discount brokerages to near record levels. 

After a 15-year period of volatility marked by the dot-com crash and the 2008 financial crisis, individuals are swelling trading volume at firms such as E*Trade Financial Corp. and TD Ameritrade Holding Corp.—and stoking worries that investors may be piling in when stocks are at their peak. 

Brandon Garretson started dabbling in stocks a few years ago as the market began to rally. He got more serious last year after joining an online-trading forum. Now, the 31-year-old salesman of equipment to chemical plants makes about two trades an hour via his TD Ameritrade account.

"I love it," said the Baton Rouge, La., resident. "You look over charts and come up with ideas for the next day. There's really not a better feeling," he said. He says he is considering quitting his job to trade full time.
Mr. Garretson isn't alone. Average daily client trades at E*Trade Financial totaled about 160,000 in the fourth quarter of 2013, up 25% from a year earlier. At TD Ameritrade, clients made 414,000 trades a day on average in the quarter ended Dec. 31, up 24% from a year earlier. Charles Schwab Corp. customers made 488,000 trades a day on average, up 8%....MORE
And from the Financial Times:

Markit and Virtu race for New York IPOs
Two unique financial technology companies are preparing multibillion dollar initial public offerings, with both Markit and Virtu Financial seeking New York listings in the coming months.

Markit, the UK-based data provider, is aiming to raise at least $500m and seek a valuation of more than $5bn as early as the second quarter of this year, people familiar with its plans said.

At the same time, Virtu, a global proprietary electronic trading company that employs high frequency strategies, is aiming to raise around $300m from a listing that would value it at around $3bn, as it too seeks a market debut around that time, some of these people and others added....MORE
HT on the second story: ZeroHedge who note:
Having sold his 7-bedroom NY mansion, the CEO of Virtu Financial (the high-frequency-trading firm that accounts for 5% of US equity trading volume) appears to believe investors are ripe for him to IPO his firm. As The FT reports...