Douglas Cifu: Yes. It’s actually — it’s a great question because for years people have looked at realized volatility overall at Virtu and the strong appropriate correlations between what our P&L should and shouldn’t be. And I think we’re still true. And so as I said in my prepared remarks, I’m very pleased with the overall performance particularly in VPMM, given the fact — excuse me that we had a mixed environment in volumes slightly up and realized volatility materially down. I mean it’s — as a side note, it is surprising to me and I’m not an expert in this to look at the VIX and say, okay, well we’ve got some global conflicts going on in Central Bank scratching ahead trying to figure out. We got inflation and we got a presidential election on the horizon and the VIX is still at 12, 13, 14, 15 and hasn’t really shut off but that’s neither here nor there.
I think with regard to our VPMM business, we have always tried to indicate and I do think that some of the information as you indicated in the 605 reports are important and that you have to look at that and we certainly look at that internally here at Virtu as sort of a sub business if you will within our customer market making business, because we are dependent if you will one on the flows that we get from our retail clients and there’s hundreds of them. So, certainly retail volumes are important, because if you’re not getting the widgets you can’t make money on each of the widgets. And then secondly, within that what’s the spread at time of arrival if you will within the orders that we received. Some of that Craig is the best explanation.
I give you some of that is the mix of the flows that we get. I mean if you’re getting higher priced names as opposed to some of these smaller penny names if you will or low price names that trade an awful lot. You’re going to have a greater opportunity. So, some of it is mix of business. And some of it frankly is the environment where again, retail is a slight misnomer, because a lot of it is also high net worth and RIA flow that comes through the pipe. So, it’s not just day traders if you will. And we sort that by each of our clients. I mean some of the flows will be more high net worth RIA type of flows. And there similar to the answer I gave Chris around the ETF block desk, you have clients that are doing their own portfolio rebalancing or they’re coming off the sideline from fixed income and they’re deciding they want to go by a bunch of Tesla and Amazon and a bunch of technology from, whatever it may be and that flow will tend to be a little less correlated to the market and maybe we’ll present a better opportunity to Virtu, so more engagement and more allocation into equities.
And the mix of the business is probably the best explanation I can give you as to why we spread at time of arrival as measured by our 605 reports was significantly higher in the first quarter as compared to the fourth quarter. Obviously, that does help drive results. And that’s offset I guess as I indicated earlier by the significant decrease quarter-over-quarter in realized volatility. I hope that give you some explanation. And again at the Panthers, we’re always open to new fans, so you are welcome.
Craig Siegenthaler: After our 18 losing streak at the end of the season I might have to switch. But Doug one follow-up here. So, how are spreads trending in March or April just given we haven’t seen the 605 data yet for those two months and in April volatility has actually spiked up?
Douglas Cifu: Yes, I’m always hesitant to like every time I do this then one of you guys jumps on it. I would say that they’ve been consistent. I mean our March report is due out on May 1st, I think Andrew is that about, right? Yes. So, you’ll see it on May 1st. And it is consistent with what we saw in January and February. So, again I’m not smart enough to give you all of the macro reasons I’ve given you the best explanation that I can in terms of what we’re seeing. Obviously, it’s a positive for the customer Market Making business. We’ve seen ebbs and flows over the last since we bought Knight in 2017 in terms of that. And so we try not to get too high and not too low because every time that the spread numbers come in we know that they’re going to revert back. And so these are — we just do our best to try to monetize the flow that comes to us.
Craig Siegenthaler: Thank you for taking my questions.
Douglas Cifu: Thank you very much.
Operator: The next question comes from Dan Fannon with Jefferies. Your line is open.
Dan Fannon: Thanks. Good morning. I was hoping to get an update on options market making where you are in terms of number of single names as well as kind of index? Trying to get a sense of what percentage of the market you are interacting with at this point?
Douglas Cifu: Yes, it’s a great question. And I guess I get it every quarter. So, — as I should. We continue to chug along. We have expanded the single names that we are trading if there are — again — we are not directly taking flow from clients and that is a strategic decision that we have made. I’m not saying that we won’t at some point, but that — there’s 1,000 names if you would need to be active in. And today — not every day but we are up and capable of quoting in 10% to 20% of the overall universe. And so we pick and choose our Spots obviously when there is excitement Dan around a particular name like Tesla earnings or this and that and that’s the name that will always be up and active in, we will be market making there.
