Internally, we track all these metrics. And as I said in my prepared remarks, we were very, very happy with the performance of the options desk and the block ETF desk during the quarter. One of the highlights of the year was our expansion into Asia, where we are now actively and profitable as an options market maker in both the Japanese and the Indian markets. And we think there’s only an opportunity to grow there. So I get your frustration, which we share around the absolute dollar value, if you will, but in terms of what our market share was in the addressable index product for the options business, it continues to grow and continue to be competitive. It’s just again those organic growth initiatives are subject to the same market forces, if you will around volumes, but more – much more importantly, volatility and effectively quoted spread with regard to the options contracts as all of our other asset classes.
Chris Allen: Thanks, guys.
Operator: Thank you. Our next question for today comes from Dan Fannon of Jefferies. Dan, your line is now open. Please go ahead.
Dan Fannon: Thanks. Good morning. My question is on kind of expenses and leverage of the model. I think, Joe, you’ve talked about managing to a comp ratio and then to the dollar amount as the year progressed, starting out with the ratio and then to a dollar amount for the full year. And if I look at the full year, comp is modestly up and revenues are down. And so just want to understand, I think going forward in an environment is this kind of the floor if revenues don’t get better, we can see this is kind of a floor for cash compensation and just – also just any outlook for expenses as we think about next year more broadly.
Joseph Molluso: Yes, sure. Dan, it’s Joe. I don’t know if I call it floor, I’d say, I kind of go back to Doug’s remarks around the overhaul of our employee base in terms of upgrading of the talent, in terms of something like 60% of the people who are here today were not here when we acquired ITG. So we’ve been upgrading and investing. We’re always asked, well, what are you investing in, in terms of the growth initiatives? I mean this is our investment. And I think if you look at comp going from 315 to 320 in a year, like 2023 overall, with a significant upgrade in talent, we’re happy with that outcome. We don’t worry about the ratio being 26% on a cash basis. So there’s no relation around that. I wouldn’t expect it to get too high – too much higher than that over the long-term, but I think we are happy where it came out in terms of what it means about the talent that’s available will be hired.
It’s a much better recruiting environment in the past six months to a year than it has been in the past few years. And I think…
Dan Fannon: And prospectively just thinking about the other expenses, yes.
Joseph Molluso: Yes, sure. On other expenses, on communications and data processing, again, we’ve had some build outs that we’ve had to do. We have experienced price increases on market data and infrastructure, and it’s up. I’ve always guided low-to-mid single-digit expense fixed cost increases, I think, we’re right there. So on communications and data processing, again, when you think about the interest in global infrastructure that we manage and the market data plan that we are subject to, again, I think we’re really pleased with this outcome. We actively – we realize there’s going to be price increases and investments we need to make. So we actively manage market data, especially to make sure we prune where we can.
And then operations and administrative stuff, I think, 2022 was low, because we had some favorable foreign exchange adjustments in terms of euro, in terms of pound sterling, in terms of the expenses in our non-U.S. subsidiary. So I think that kind of revert in all of us in 2023, but I would expect that number to be the run rate going forward for ops and admin.
Dan Fannon: Thank you.
Operator: Thank you. Our next question comes from Alex Blostein of Goldman Sachs. Your line is now open. Please go ahead.
Alex Blostein: Hey, guys, good morning. Thank you for the question. I wanted to just dig into the capital structure a little bit and similar to the question I had for you last quarter, I think. But the debt to EBITDA continues to creep up a little bit and it’s a function, obviously, some challenges on the EBITDA front, but it also looks like the debt costs have increased this quarter, I guess, with a new swap. So I guess A, maybe just confirm that and kind of talk through the impact on P&L from that. But also as you think about the uses of cash flow, if interest expenses higher going forward, what are the thoughts about deleveraging and paying down debt versus buybacks?
Douglas Cifu: Yes. Just to take those in order, the new swap that we put on will be from a P&L standpoint accretive, right? So we did not do that. From a GAAP P&L standpoint, it will be accretive. All we did was kind of pull forward some of the built in gain that we had in a very attractive swap instrument that was put on several years ago that was an enormous benefit to Virtu and that was going to unwind in a few months. So what we did is we just pulled that forward, use that to reduce debt, and the cash interest expense run rate was going to go up anyway, right? So we kind of were to do an accretive deal, reduce debt by a little bit and then also kind of cap the interest expense going forward. The instrument – the underlying instrument that we have as our outstanding loan is SOFR plus 300, we expect in a Fed easing environment and we expect with the loan market coming back that we will have opportunity to reduce cost on that over the next couple of years.
