MarketsMuse blog update courtesy of extract from 27 Feb story from ETF.com’s Elisabeth Kashner and her profile of prop trading firm Virtu, the high-frequency (HFT)“Virtu’s HFT Way To Play Crazy Oil Market”

Would you ever sell something to yourself and pay someone else to be the middleman? Nobody’s that dumb, right?

Virtu, the high-frequency trading firm (HFT) of the type profiled in “Flash Boys,” did just that, to the tune of $32 million.

High-frequency traders are perhaps the most sophisticated players on Wall Street. Some might be scoundrels, but they’re not fools. That’s why their recent trades in oil futures-based ETFs are so fascinating.

Like hedge funds and mutual funds, HFT firms keep their portfolios under wraps, except when the Securities and Exchange Commission requires disclosure.

Virtu’s most recent form 13F, the Securities and Exchange Commission’s quarterly holdings report, revealed a $46 million position in United States Oil (USO | B-100) at the close of business on Dec. 31, 2014. USO buys front-month oil futures. By the end of 2014, with oil prices at a 10-year low, USO shares had taken a beating, as you can see in the chart below.   Continue reading →