New 52 week highs for $VIRT with the VIX at 19 is wild. The last time the VIX was this low Virtu was trading in the mid teens.
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Why should Virtu price depend on current level of (strongly mean reverting) VIX, as opposed to (if we want to proxy it by something) expectations of avg value of VIX for next N years?
Its a good point & I largely agree, it's just very hard to predict future volatility & in the past VIX dependent names like Virtu have correlated with spot VIX/near months of the VIX futures curve.
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**Higher VIX generally means wider spreads which means more ANTI per day for equity market makers
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This is like saying Virtu daily stock price should be correlated with their daily revenues. I understand we can observe the correlation with contemporaneous VIX in the past but it's not a particularly rational relationship, so can break easily
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