{"id":34073,"date":"2025-07-10T19:00:00","date_gmt":"2025-07-10T19:00:00","guid":{"rendered":"https:\/\/financialrush.com\/?p=34073"},"modified":"2025-07-10T19:00:00","modified_gmt":"2025-07-10T19:00:00","slug":"trading-firms-virtu-and-citadel-securities-clash-over-new-options-exchange","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=34073","title":{"rendered":"Trading firms Virtu and Citadel Securities clash over new options exchange"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=15295fd0-7f9b-4a7e-bc41-67fb35147fc6\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Virtu Financial has come out against rival Citadel Securities\u2019 attempts to block the opening of a new US options exchange, as the high-speed trading giant wades into a dispute over market structure that has sucked in some of Wall Street\u2019s biggest names.<\/p>\n<p>The disagreement hinges on the implementation of a 350-microsecond so-called \u201cspeed bump\u201d that US exchange operator IEX \u2014 made famous by the Michael Lewis\u2019s bestseller\u00a0<em>Flash Boys <\/em>\u2014 hopes will protect traders on its proposed exchange from buying and selling options at stale prices. <\/p>\n<p>This mechanism will allow IEX to cancel and reprice a small proportion of orders, but critics of the plan, including billionaire Ken Griffin\u2019s Citadel Securities, say it would end up harming ordinary investors while enriching IEX\u2019s shareholders and market makers.<\/p>\n<p>New York-headquartered Virtu on Wednesday wrote to the Securities and Exchange Commission in support of IEX, which says it wants to shield investors from the cost of latency arbitrage \u2014 the exploitation by high-frequency traders of the microseconds it takes prices to reflect broader market moves.<\/p>\n<p>Virtu\u2019s intervention comes three weeks after Citadel Securities criticised what it described as IEX\u2019s \u201cnefarious\u201d and \u201cunlawful\u201d plan \u201cto introduce an unprecedented quote cancelling scheme\u201d into the ballooning US options market, in a letter to the SEC.<\/p>\n<p>Retail broker Charles Schwab, the New York Stock Exchange and Nasdaq have also said that IEX\u2019s plan to launch a new equity options exchange should not be approved.\u00a0<\/p>\n<p>But in its letter, Virtu said IEX\u2019s proposal \u201crepresents a well-intentioned effort to advance\u201d market transparency and improve \u201cthe investor experience\u201d.\u00a0<\/p>\n<p>It added: \u201cThe introduction of new trading venues has the potential to promote competition, foster innovation and possibly deliver better trading outcomes for all market participants.\u201d Virtu was co-founded by Doug Cifu and Vincent Viola, former chair of the New York Mercantile Exchange and the owner of ice hockey team the Florida Panthers.<\/p>\n<p>Citadel Securities and IEX have clashed before. In 2015, Citadel Securities sought to block IEX\u2019s application for registration as a national securities exchange, writing at the time that a new entrant would \u201ccreate confusion for the marketplace, and for retail investors in particular\u201d.\u00a0<\/p>\n<p>Citadel\u2019s attempt was ultimately unsuccessful, although 11 years later IEX remains a small player in US equities, with a market share of roughly 2.6 per cent, according to the firm.<\/p>\n<p>Citadel\u2019s latest attempt to shut down IEX\u2019s planned move into the options market has drawn the ire of pressure group We The Investors, which wrote to the SEC on the subject earlier this month.<\/p>\n<p>\u201cAlmost 10 years since the first comment letters were filed against the IEX Equities exchange application, and all we have are the same tired, recycled arguments,\u201d said WTI chief technology office Dave Lauer in the letter.<\/p>\n<p>\u201cIt has become clear that despite critics\u2019 attempts to rewrite history and pretend that there is no such thing as latency arbitrage, such arbitrage does exist, and exploits both geographical and technological latencies in order to earn profits for the fastest traders to the detriment of slower traders,\u201d he added.<\/p>\n<p>John Ramsay, chief market policy officer at IEX, said: \u201cFor the people who complain that the quotes will be inaccessible, it\u2019s worth asking inaccessible to whom and for what purpose. If the answer is they\u2019ll be inaccessible to people who are using latency arbitrage, that is exactly the point.\u201d<\/p>\n<p><em>Additional reporting by Jennifer Hughes<\/em><\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/15295fd0-7f9b-4a7e-bc41-67fb35147fc6\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this&hellip;\n","protected":false},"author":5,"featured_media":34074,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-34073","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34073"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34073\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/34074"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}