Alphacution: Flow Traders Q1 at $545.7mn, an 11-sigma print on prior quarters

Publicly listed Flow Traders has released its Q1 net trading income. Based on 25 quarters of disclosed performance beginning Q1 2014, Flow Traders reported Q1 net trading income (NTI) of $545.7 million for Q1 2020, which is a nearly 11-sigma print based on the performance of the prior 24 quarters.

On May 7, Virtu Financial is scheduled to report Q1 2020 earnings. Preliminary Q1 guidance from the company is NTI of $489 – 497 million. This would be a strong quarter on NTI for sure, but barely a 1-sigma print based on the historical recreation of a combined Virtu-KCG-ITG. In relation to FT, that NTI result range would also put Virtu in a similar revenue capture rate range of ~8 bps (based on the similar relationship between the Q1 2020 figures and the Q1 2018 figures for both firms).

Alphacution will also be analyzing data for estimates of non-publicly listed market maker trading revenue for the likes of Citadel Securities, SIG/Gx1, Two Sigma Securities, Jane Street, among others.

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