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An Under The Radar Way To Profit Off The Retail Trading Revolution
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The retail trading revolution is about propel another resurgence of market capital, with a $1,400 stimulus check preparing to hit many American’s bank accounts. This new cohort of traders are ready to put this money to work in the stock market.
Virtu Financial (VIRT - Free Report) is a highly esteemed high-frequency market maker, which handles roughly 25% of the swelling retail investing market's volume. Virtu is a play on impending market volatility and how you can take advantage of the retail trading revolution. The stock not only has a healthy long-term growth outlook but will create a volatility hedge for your broader portfolio in the short-run.
Following a blowout reported year, analysts raised their estimates for this HTF powerhouse and driving VIRT into a Zacks Rank #1 (Strong Buy).
Retail Trading Revolution
A Reddit revolution has taken Wall Street by storm. The Reddit message board r/wallstreetbets was taken the stock market by storm. Jim Cramer argued that this cohort of money-hungry Millennial and Gen Z traders is more powerful than any one Wall Street firm. The next generation of investors & traders is entering the market at a record pace. The entry barriers into stock have been torn down by our quickly advancing digital world. FOMO-driven and stir-crazy new retail players in the equity market are putting that extra "fun money" to work in the equity markets, catalyzing a wave of new investors like we have never seen before.
Over 20% of the total market volume is now made up of retail investors, which is up from 10% in 2019. I only expect this level of retail trading volume to grow in the coming years as the US financial system's democratization is taken advantage of at every income level.
Dealer-brokers like Charles Schwab (SCHW - Free Report) , TD Ameritrade, Interactive Brokers (IBKR - Free Report) , and the new favorite mobile-inclined trading platform Robinhood all sell orders to market makers like Virtu. The more retail trade orders that Virtu can secure, the more Virtu's best-in-class high-frequency trading (HFT) algorithm will profit, and as I said, the new wave of retail trading is only budding. This is a long-term tailwind that will continue to drive Virtu's share price growth.
Impending Volatility
Impending volatility is the other more short-term catalyst for the addition of VIRT into our portfolio. Volatility is the firm's friend, and over the past 4 quarters, the business has been booming. The company produced triple-digit annual revenue growth in 2020 amid one of the most volatile years in equity market history, proving its high-frequency tactics are reliable. Virtu's bottom-line exploded to $1 billion this past year, 438% more profitable than 2019.
The S&P 500 looks to be poised for another volatility infusion with the VIX (aka the fear index) sitting around 20, a support level that it has not been able to drop below since the pandemic sell-off began nearly 1-year ago. Now it looks like we may be poised to bounce off this VIX support level and experience a broader market pullback.
Volatility means a profitable opportunity for VIRT and its volatility-powered HFT strategies. VIRT has a negative beta, which means that it is inversely correlated with the market, which hedges against looming volatility.
Where VIRT Is Trading At
VIRT is trading at a price to forward earnings figure below 10x, reflecting a sizable discount to its historical median and the broader market. There is some perceived risk related to a 'proposed' stock transaction tax, something that would be detrimental to this trading business as well as the broader equity markets and retail investors. The chances of this type of bill being passed are close to 0%. The equity markets are finally available to anyone and everyone. The last thing Congress wants to do is add barriers to entry.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
An Under The Radar Way To Profit Off The Retail Trading Revolution
The retail trading revolution is about propel another resurgence of market capital, with a $1,400 stimulus check preparing to hit many American’s bank accounts. This new cohort of traders are ready to put this money to work in the stock market.
Virtu Financial (VIRT - Free Report) is a highly esteemed high-frequency market maker, which handles roughly 25% of the swelling retail investing market's volume. Virtu is a play on impending market volatility and how you can take advantage of the retail trading revolution. The stock not only has a healthy long-term growth outlook but will create a volatility hedge for your broader portfolio in the short-run.
Following a blowout reported year, analysts raised their estimates for this HTF powerhouse and driving VIRT into a Zacks Rank #1 (Strong Buy).
Retail Trading Revolution
A Reddit revolution has taken Wall Street by storm. The Reddit message board r/wallstreetbets was taken the stock market by storm. Jim Cramer argued that this cohort of money-hungry Millennial and Gen Z traders is more powerful than any one Wall Street firm. The next generation of investors & traders is entering the market at a record pace. The entry barriers into stock have been torn down by our quickly advancing digital world. FOMO-driven and stir-crazy new retail players in the equity market are putting that extra "fun money" to work in the equity markets, catalyzing a wave of new investors like we have never seen before.
Over 20% of the total market volume is now made up of retail investors, which is up from 10% in 2019. I only expect this level of retail trading volume to grow in the coming years as the US financial system's democratization is taken advantage of at every income level.
Dealer-brokers like Charles Schwab (SCHW - Free Report) , TD Ameritrade, Interactive Brokers (IBKR - Free Report) , and the new favorite mobile-inclined trading platform Robinhood all sell orders to market makers like Virtu. The more retail trade orders that Virtu can secure, the more Virtu's best-in-class high-frequency trading (HFT) algorithm will profit, and as I said, the new wave of retail trading is only budding. This is a long-term tailwind that will continue to drive Virtu's share price growth.
Impending Volatility
Impending volatility is the other more short-term catalyst for the addition of VIRT into our portfolio. Volatility is the firm's friend, and over the past 4 quarters, the business has been booming. The company produced triple-digit annual revenue growth in 2020 amid one of the most volatile years in equity market history, proving its high-frequency tactics are reliable. Virtu's bottom-line exploded to $1 billion this past year, 438% more profitable than 2019.
The S&P 500 looks to be poised for another volatility infusion with the VIX (aka the fear index) sitting around 20, a support level that it has not been able to drop below since the pandemic sell-off began nearly 1-year ago. Now it looks like we may be poised to bounce off this VIX support level and experience a broader market pullback.
Volatility means a profitable opportunity for VIRT and its volatility-powered HFT strategies. VIRT has a negative beta, which means that it is inversely correlated with the market, which hedges against looming volatility.
Where VIRT Is Trading At
VIRT is trading at a price to forward earnings figure below 10x, reflecting a sizable discount to its historical median and the broader market. There is some perceived risk related to a 'proposed' stock transaction tax, something that would be detrimental to this trading business as well as the broader equity markets and retail investors. The chances of this type of bill being passed are close to 0%. The equity markets are finally available to anyone and everyone. The last thing Congress wants to do is add barriers to entry.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>