From the headlines flying around about the stock market yesterday, you'd be forgiven for thinking that investors sold just about every share they could find.
And you wouldn't be too far off the mark: Only six stocks in the Standard & Poor's 500 Index increased yesterday. In the broader Russell 3000 Index, only 130 -- or just 4 percent of companies -- ended the session higher.
Among those that did rise by any noteworthy amount, the reasons mostly appeared to be unrelated to Greece. For example, the biggest gain in the Russell 3000 came from Aratana Therapeutics Inc., a biotech that's making a drug for ... (not making this up!) ... post-surgical pain in dogs that had knee surgery.
Yet there was one company posting an impressive move higher that very well could have been directly related to the pain among the stock-market dogs following the breakdown of talks between Greece and creditors. Virtu Financial Inc., the electronic market maker that went public in April, jumped 2.4 percent yesterday as all the main benchmark indexes lost at least 2 percent or more.
It's not the first time that investors have bid up shares of Virtu amid lousy days in the market. When the S&P 500 lost 1 percent on May 26, Virtu squeaked out a small gain. When the benchmark gauge lost 1.2 percent on May 5, Virtu jumped 3 percent. When the S&P 500 fell 1.1 percent on April 17, Virtu climbed 2.2 percent.
Some of those gains were soon after Virtu's IPO, when price discovery could've still been at work, so it may not be a perfect 1-to-1 correlation.
However, it shouldn't come as any surprise that investors will get excited about Virtu during big selloffs. Volatility is to Virtu what bananas are to Chiquita. And while it's been relatively absent in the U.S. stock market this year before yesterday, Virtu has been able to harvest it in other asset classes amid wild swings in energy prices and currencies. If the bananas are growing somewhere, Virtu will be there to pick them.
"We obviously cannot predict where or when these exogenous events will happen," Chief Executive Officer Douglas Cifu told analysts in a conference call last month, according to the transcript. However, he added, "Virtu is poised to realize the benefits of increased volumes and volatility in each of the 225 markets in which we participate."
All of this has coincided with a decrease in another type of volatility -- the volatile rhetoric surrounding the very practice of making markets through high-frequency trading, or HFT.
"The tone of the debate seems to be improving," the HFT trade group Modern Markets Initiative wrote in an e-mail yesterday, citing recent news stories about Goldman Sachs Group Inc. making a renewed focus on high-speed trading and one-time HFT critic T. Rowe Price Group Inc. sending orders to Virtu.
Liquidity in financial markets, and the behavior of those who provide it, is becoming a hot topic these days. So if the stock market has more days like it did yesterday, while Virtu has more days like it did yesterday, it will be interesting to see if the tone of the debate continues to improve.