High frequency trading firm Virtu is trying to IPO again

Jessica Morris
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Critics say high frequency trading firms have an unfair advantage (Source: Getty)

United States-based high-speed trading (HFT) firm Virtu will be taking a second stab at an initial public offering, after its first attempt was scuppered by the furor over Michael Lewis' "Flash Boys".

Virtu revealed plans to raise $314m (£211m), valuing it at nearly $2.6bn (£1.75), in a regulatory filing today.

It's one of the biggest high frequency trading firms which use technological tools and computer algorithms to make vast numbers of big, ultra-fast trades. Investment positions may be held for seconds, or even milliseconds, as a computer makes tens of thousands of trades a day.

These practices were first bought to the wider public's attention by financial journalist Michael Lewis' book "Flash Boys", in which he argued the existence of HFT firms meant markets were effectively "rigged".

And the ensuing controversy from the book forced Virtu to shelve its initial public offering in March 2014.

Its case wasn't helped by last year's revelation that the firm had made just one day of trading losses in five years. Critics took this as further evidence high frequency trading firms have an unfair advantage.

But defenders of high frequency trading practices argue that the huge number of trades improve market liquidity, while the Bank of England has also said it helps markets by making pricing more accurate.

Goldman Sachs, JPMorgan and Sandler O’Neill & Partners are leading the underwriting of the offering.

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