Few companies were looking forward to the kind of chaos we're seeing in the market. Fewer still base their entire business model around it.
The S&P 500 and Dow Jones industrials are down 7% and 8%, respectively, since Janet Yellen announced the Federal Reserve's plan to raise interest rates in mid-December. And turbulence has been exacerbated by China's poor manufacturing report, plummeting commodity prices, and newfound geopolitical tensions.
Yet shares of high-frequency trader Virtu Financial (VIRT), the first of the so-called "Flash Boys" to go public, are up 2% over the period.
It appears the New York-based electronic market maker has an insatiable appetite for volatility, taking advantage of the widening spread between bid-ask offers that are inherent in volatile markets.
The electronic trader offers bid and ask quotes for more than 11,000 securities on roughly 225 exchanges, generating its profits by quickly buying and selling large quantities of assets in hopes of cashing in off price discrepancies, according to its quarterly filing.
And with investors worried the market could turn even more turbulent -- the S&P volatility index is up more than 33% since the end of last year -- many believe high-frequency trading could emerge as an investor's last refuge.
Goldman Sachs (GS) upgraded its rating on Virtu's stock to Buy Monday, citing "under-appreciated exposure to volatility and defensive top-line within exchanges," according to an investment report.
"Exchange volumes posted robust results across most categories in 2015. That said, volumes in a number of products are still below historical peaks (even excluding Financial Crisis years)," Goldman analysts wrote. "With prospects of higher volatility amid diverging global macro trends, we believe volumes have room to move higher, particularly in FX, Energy and parts of the rates markets."
The majority of Virtu's listed analysts maintain a buy rating on the stock and have an average price target of $24.67, according to consensus data compiled by Bloomberg.