Hello and welcome to the Virtu Financial First Quarter 2023 Results. My name is Elliot, and I'll be coordinating the call today. I would now like to hand over to Andrew Smith, Head of Investor Relations. The floor is yours. Please go ahead.

Thank you, Elliot, and good morning. Thank you everyone for joining us. Our first quarter results were released this morning and are available on our website. With us today on this morning's call, we have Mr. Douglas Cifu, our Chief Executive Officer; Mr. Joseph Molluso, our Co-President and Co-Chief Operating Officer; Ms. Cindy Lee, our Deputy Chief Financial Officer; and Mr. Sean Galvin, our Chief Financial Officer. We will begin with prepared remarks and then take your questions. First, a few reminders. Today's call may include forward-looking statements, which represent Virtu's current belief regarding future events and are therefore subject to risks, assumptions, and uncertainties, which may be outside the company's control. Please note that our actual results and financial conditions may differ materially from what is indicated in these forward-looking statements. It is important to note that any forward-looking statements made on this call are based on information presently available to the company, and we do not undertake to update or revise any forward-looking statements as new information becomes available. We refer you to disclaimers in our press release and encourage you to review the description of risk factors contained in our annual report, Form 10-K, and other public filings. During today's call, in addition to GAAP measures, we may refer to certain non-GAAP measures, including adjusted net trading income, adjusted net income, adjusted EBITDA, adjusted EBITDA margin. These non-GAAP measures should be considered as supplemental to and not as superior to financial measures as reported in accordance with GAAP. We direct listeners to consult the Investor portion of our website where you'll find additional supplemental information referred to on this call as well as a reconciliation of non-GAAP measures to the equivalent GAAP term in the earnings materials with an explanation of why we deem this information to be meaningful, as well as how management uses these measures. And with that, I'd like to turn the call over to Doug.

Thank you, Andrew, and good morning, everybody. This morning we reported our first quarter results for the quarter ended March 31st; Virtu earned $0.74 of adjusted EPS and $6 million per day of adjusted net trading income. Focusing as always on expense discipline, we generated a 56% adjusted EBITDA margin and $207 million of adjusted EBITDA. I’m pleased with our results this quarter as compared to the fourth quarter of 2022. This quarter's headline market metrics were mixed overall. Realized volatility was down significantly by 32%, and U.S. equity lines were up 5%. As always, we look at specific internal metrics for each of our businesses, and I’m happy to report that this quarter we met or exceeded our benchmarks in all cases. Our proprietary Market Making business did especially well in the quarter, driven by particularly strong performance in global currencies and continued strong performances in global commodities, as well as European equities. We continue to see the benefit of increased internalization opportunities across the firm's various trading desks. In addition, our growth initiatives continue to contribute meaningfully and generated 11% of our adjusted net trading income this quarter, with continued growth in options market making as the biggest driver. Our customer Market Making business performed well against the opportunity presented, which was materially better than the fourth quarter of 2022. I'm very pleased with the $278 million in adjusted net trading from Market Making this quarter, a 53% increase from last quarter. Execution services also improved over the fourth quarter, delivering $95 million of adjusted net trading income. While institutional activity remained muted, volatility in March did prompt some increased activity as clients adjusted their portfolios. We are currently pursuing several exciting initiatives that we believe will contribute to the growth of this segment. Specifically, ongoing investments in Triton and data analytics on the fixed income offering have proven successful, resulting in new mandates and helping us win new clients and retain existing business. It's still early days, but we expect that the uptake in institutional clients' use of automation, in the case of our data analytics and workflow automation in Triton, will bear fruit over the course of this year. Finally, we've noticed an increased number of clients leveraging more aspects of our platform for the full life cycle of a trade to achieve scale and cost savings. As a reminder, our VES platform, as is the case across Virtu, was intentionally designed with a focus on scalability, reliability, and ease of use. This allows our clients to optimize their workflows, reduce costs, and increase productivity at every stage of the trade process. Overall, our businesses continue to grow and demonstrated impressive yield this quarter in a market environment that was mixed in terms of the opportunity afforded by the marketplace. While a large part of our business is variable and any quarter can deliver a range of outcomes, especially when viewed against the headline volume and volatility metrics, this quarter is a reminder that Virtu has a broad business that is capable to capitalize on opportunities, not just in retail trading, but in a myriad of global asset classes. We continue to see important success in our growth initiatives, and on Page 5 of the supplemental materials, you will see how these initiatives contributed meaningfully to our performance. In the first quarter, our growth initiatives generated over $650,000 per day of adjusted net trading income, an increase of over 13% compared to the prior quarter and the highest level since the first quarter of '22. In total, these initiatives represented 11% of our adjusted net trading income in the quarter. To highlight just a handful of our growth initiatives, our options business, which we launched just a few years ago, is thriving and will continue to grow. Market-wide option volumes were up about 8% in the first quarter, and our options business continued to perform well. We continue to incrementally expand our symbol universe, and we look forward to another record year building on what we achieved since the beginning of this business from scratch in 2019. As we've mentioned previously, we are in the very early days of our expansion into options and believe the global cross-asset opportunity has significant potential and complements our global footprint in equities, ETFs, futures, and OTC products. Our global ETF Block initiative is also contributing meaningfully to our results and had one of its best quarters since 2021 despite global ETP volumes declining in the period. While it remains early in the year, first-quarter performance here was 20% better than the average adjusted net trading income we achieved in the full year 2022. This growing global business continues to onboard clients around the world who demand our liquidity. Taken together, these and our other growth initiatives are making tremendous progress, and all our initiatives are helping to raise our baseline performance in any market environment throughout the cycle. While these initiatives will fluctuate at any point in time with the market environment, they are evidence of our ability to build businesses from the ground up in a deliberate and incremental Virtuian style. Turning to the current regulatory debate, I will be brief as Virtu has been outspoken to say the least, publicly commenting on the significant overhaul of the U.S. equity market proposal as proposed by the current SEC. Except for the proposal to enhance Rule 605, there is broad opposition to the proposals, as noted in our joint comment letter with State Street, T. Rowe Price, CBOE, and UBS, as well as dozens of individual comment letters from asset managers, pensions, exchanges, retail brokers, academics, sell-side brokers, and issuer groups which all echo concerns about potential harms to investors and capital formation from the chair's unchecked and politically motivated experiments. I would urge you to review the thoughtful comment letters filed by this broad and diverse group of investors and industry participants, not just the virtues of the world. In today's supplemental materials, we've included excerpts that demonstrate the broad-based consensus for a phased and methodical approach to market enhancements. Thankfully, the abbreviated comment period has exposed the significant issues with these proposals and illustrates how harmful, unworkable, and ill-conceived they are to the entire market. Our share buyback program has continued through April 19; we have purchased 4.6 million shares so far this year, exceeding our target ranges at given levels of adjusted net trading income. We are often asked about future non-organic growth opportunities, including new acquisitions. Our answer is while we always seek to create value and we review many opportunities, given the abundance of organic opportunities we currently have, there is no third-party investment we see today that competes with executing on our initiatives and repurchasing our own shares. Since we initiated our share repurchase program, we have repurchased 14% of the fully diluted shares of Virtu, net after new issuances. We will continue to use our significant excess cash flow to repurchase shares and return capital to our shareholders while maintaining our $0.96 annual dividend. And with that, I will turn it over to our esteemed CFO, Sean Galvin. Sean?

Thank you, Doug, and good morning, everyone. On Slide 3 of our supplemental materials, we provided a summary of our quarterly performance. For the first quarter of 2023, our adjusted net trading income, which represents our trading gains, net of direct trading expenses, totaled $373 million or $6 million per day, which is a 38% increase from the prior quarter. Market Making adjusted net trading income was $278 million or $4.5 million per day, 53% higher than the prior quarter. Execution Services adjusted net trading income was $95 million or $1.5 million per day, which is an 8% increase from the prior quarter. Our first quarter 2023 normalized adjusted EPS was $0.74. Adjusted EBITDA was $207 million for the first quarter of 2023, which was a 65% increase from the fourth quarter, and our adjusted EBITDA margin was 56%, which was up from 46% in the fourth quarter of 2022. On Slide 8, we provided a summary of our operating expense results. For the first quarter of 2023, we recorded $181 million of adjusted operating expenses, which was essentially flat year-over-year. We continue to maintain an efficient cost structure and disciplined expense management, which has helped us control our operating expenses during this inflationary environment. Financing interest expense was $24 million for the first quarter of 2023 compared to $21 million in the prior year first quarter. With the benefit of our interest rate swap contracts, which we entered into in prior years, our blended interest rate was just over 5% for our long-term debt in aggregate. Our capitalization remains adequate. In the first quarter of 2023, we repurchased 3.9 million shares for approximately $76 million. Since the inception of our share repurchase program in November 2020 through settlement date, April 19, we have repurchased a total of 36.9 million shares for approximately $987.2 million. We remain committed to our $0.24 per quarter dividend. The combination of this dividend and the share repurchase program demonstrates our continued commitment to return capital to our shareholders. Now we would like to turn the call over to the operator for the Q&A.

Our first question today comes from Rich Repetto from Piper Sandler. Your line is open.

Good morning, Doug and team. First, congratulations on a strong quarter. My question, Doug, is regarding the $0.74 you reported this quarter. When you review the last four quarters, is there anything else to learn about the company's normalized earnings potential? The past four quarters show a bit over $2.40, but should investors draw any specific insights from this strong quarter or the previous year?

Thank you for the question, Rich. This quarter serves as a reminder that Virtu has a diverse business and we can leverage various opportunities. The focus on retail trading has been significant, and while I don’t want to downplay its importance, it has overshadowed some aspects of what Virtu represents. As you know from following us since our public debut, we didn't enter the retail space until 2017. Our core market-making business is still very broad-based, generating growth and returns. I also want to emphasize the strong culture within our firm. When I mention trading depth, it doesn't imply separate groups or traditional trader payouts, as that's not how we operate. The rationale behind acquiring Knight and ITG was to build an internalization mechanism that enhances execution efficiency and positions us as the best bid and offer across various asset classes worldwide. This has improved our overall efficiency. In contrast, standalone market-making firms often deal with internal pressures that can detract from their goals. At Virtu, our culture focuses on unity and internalization. We’ve expanded across retail and non-retail markets, including equities, commodities, and options, enabling us to manage costs more effectively by keeping risk management in-house. This approach creates additional synergies and opportunities. I'm pleased with the progress we've made. To put it simply, we're developing a robust central risk book within the firm. Joe, do you have anything to add?

Yes. Hey, Rich, it's an interesting comment you make. Looking back over the past four quarters, $2.45 of EPS, you round up is $5.5 million of net trading income. We've had a lot of discussion about our chart and the various levels of EPS it generates. I would say there are lots of different ways to look at this. If you want to look at it over the short-term, I think your comment is fair. I think that's a reasonable way to look at it in terms of that level of net trading income and earnings. I'd say if you want to look at it over a longer term, when we were at FIA six weeks ago, we noted that our pro forma performance has been since we went public, if you included ITG and KCG in the numbers, and it's around $6 on an average basis. I would hold to that on a longer-term basis that we should be there, given growth and the outsized quarters which happen inevitably. Then the third layer to consider both for the short-term and long-term is the impact of the buybacks. We've got, since we started the buyback program, around $1 billion of stock bought back, and it's 14% of the company net of issuances for our compensation. So I think that's an emerging way to frame it.

Got it. And I think you're referring to being $6 million NTI and being around in?

$6 million net trading income per day over a very long period of time, yes.

Thank you for the detailed work you put into reviewing those comment letters and presenting them in the way you did. It's very informative. Could you please provide a brief summary of what the next steps in the process are and what we can expect?

Thank you, Rich. I'll do my best to be professional in my comments. There has been a significant influx of comment letters received. Typically, if the process is followed correctly, the SEC must engage in a thorough and thoughtful internal review of these letters. In my prepared remarks, I mentioned that Gensler recently expressed dismissive views on certain industry feedback at a Bloomberg conference, which I believe was unfortunate. He seems to dismiss these comments because we have a vested interest in the matter. It’s important to consider the broader context of the responses received, which is why we shared this summary. The New York Stock Exchange has publicly partnered with Citadel and Schwab in a comment letter indicating that they believe they would benefit from the proposed auction format. However, the NYSE has also stated that they find little sense in this proposal and have urged for its withdrawal, which NASDAQ and CBOE have echoed. It's concerning that the DOJ independently submitted a letter arguing that the proposed rules are not cohesive and lack logic, which reflects a critique from another part of the government towards the SEC. How can the regulator dismiss this feedback? It seems inconsistent with the SEC's obligations under the Administrative Procedures Act to proceed without addressing these concerns. The sensible step would be to engage in a meaningful dialogue with the industry, similar to what was done during the 2004-2006 discussions that led to the Reg NMS overhaul, which took years of careful consideration. The industry acknowledges the need for reforms; however, the rushed proposals on the table are poorly conceived and lack proper integration. For example, there’s a suggestion to update Rule 605 for retail execution data, which Virtu proposed two years ago and is supported by Citadel and others. The SEC’s proposal implies that current data is incomplete. Yet, it also introduces a major change in the retail market at the same time, which seems illogical given that they recognize issues with the current standards. It’s crucial for everyone to pause, reassess the situation, and engage in thoughtful dialogue collaboratively. We’ve never opposed competition among exchanges; we just believe that it should be conducted based on data-driven, scientific principles. The significance of these markets and our role as a leading global capital market center, along with their influence on capital formation, are too vital to risk for political reasons. I’ll now step down from my high horse and welcome the next question. Thank you, Rich.

Our next question comes from Alex Blostein from Goldman Sachs. Your line is open.

Hey, guys. Good morning. I wanted to go back, Doug, to your point about internalization and the more efficiencies you guys have been able to extract from the business. We can sort of see it in the results like we had this quarter, right, where the public proxies were not as good relative to what you ended up putting up. But is there a better way to frame the opportunity to do more of that? How much more net trading per day would you be able to extrapolate from your ecosystem? What would that look like relative to what you're doing today?

Yes, that's a great question, and I’ll address it directly. It's quite challenging to pinpoint exactly how much additional net trading we could achieve. Clearly, we have expenses related to exchanges and ATSs, as well as broker commissions, which represent significant costs. However, I can share that we experienced our highest adjusted net trading day from internalization since the KCG merger in 2017 this quarter. We continue to see growth opportunities. The key takeaway is that this progress enhances our firm's overall quality, allowing us to be more competitive in pricing for clients and the prices we can set in public markets and dark pools globally. It makes us a better market maker. From the outset of this firm, we’ve focused on being the most efficient two-sided provider of liquidity. While there are limitations on what we can achieve, it's worth noting that Goldman had an excellent quarter in equities, recognized for having a strong central risk book, and they excel in internalization as well. They have more capital to take on risks, which gives them an edge. This concept aligns well with our firm's culture. We avoid unproductive discussions about P&L attribution or bonuses that can detract from excellence, which is not an issue at Virtu. We see exciting opportunities ahead. While I can't quantify the potential very precisely, I believe it has significantly contributed to the growth of our options and ETF Block businesses. I acknowledge that we could do a better job of showcasing this competitive advantage, and we'll keep working on that.

Got it. All right. We will stay tuned for that. Hey, I wanted for my follow-up, ask you guys a question around fixed income. In your prepared remarks, I guess, you suggested that's becoming a greater focus. It sounds like you're benefiting from some of those initiatives, maybe on the execution services side. Can you help us better frame fixed income revenues, credit trading in particular? What does that comprise today? Is there an opportunity as the market evolves for you to do more on the market-making side as well as your services?

It's a great question, and while I wouldn't call it the holy grail, we are still in the early stages. Options started becoming significant for us in 2019, and we're really just beginning. We're not even in the first inning yet. We're working on getting our fleet ready in terms of fixed income. There are multiple growth opportunities in fixed income, especially in treasuries, where we have been active for a while. We've made key hires from outside the company to enhance our capabilities there. The same applies to corporate credit. I believe these areas are promising because of the electronification of markets, and companies like Tradeweb, MarketAxess, Bloomberg, and Trumid play a crucial role in distributing those prices to end users. This also aligns well with our ETF Block business, as a significant portion of that is related to fixed income, both in the U.S. and Europe. While it currently has a minimal impact on our overall results, I see it as a valuable opportunity. However, we don't aim to be the proprietary trading desk of a large bank, as we lack the resources for that. Our focus isn't on trading large blocks of corporate credit like some of our competitors. Those firms excel in that area. Nonetheless, there is a significant opportunity to provide liquidity to end users through our client network.

Got you. All right. Thanks, guys.

Our next question comes from Ken Worthington from JPMorgan. Your line is open.

Hi. Good morning. Thanks for taking the questions. It seems like a big crisis always has the potential to be helpful to earnings. I think you mentioned customer repositioning in the prepared remarks. How big a deal was the banking crisis to earnings this quarter? How did this crisis compare to others like the Swiss franc that were helpful with profits in the past?

Yes, it's a great question. Actually, this one is different. It helps more on execution services side, Ken, than it did in market making. There was more institutional activity as a result of what was going on. People were moving portfolios, getting out of stocks. On the Market Making side, I've said this publicly before: when stocks go from Silicon Valley Bank from whatever to 0, it's just serendipity where you are, whether you were long or short. Honestly, I don't remember whether we were. It wasn't a material amount either way. There was some activity obviously in regional banks, and we did fine, but it wasn't like a big broad event that impacted thousands of instruments like large macro events. So in terms of market making, it wasn’t material in the quarter. It really had a bigger impact on Execution Services. Joe, do you want to add?

You mentioned the Swiss franc decoupling, Ken. I remember that. It started in FX and reverberated around European equities, commodities into the U.S. This was more, I'd say, idiosyncratic and isolated.

Okay. It makes total sense.

There was no significant gain in market making. We ended up breaking even on the regional banks, which was a good outcome from a risk management perspective.

Okay, perfect. And then in options, how big a business is zero-day options for you? And based on what you see, do you have any opinions on the durability or trading of this product? Or how much more it might grow for you over time?

Yes. We are involved in this space, and while there is competition among major institutions like JPMorgan and Goldman, I don't have a strong position in that debate. There is considerable interest, particularly from both institutional and retail investors based on what I've observed. We actively participate as a market maker, especially as more investors turn to daily options to manage their market exposure, which I believe institutions are primarily doing. This seems more focused on hedging rather than speculation. Index market-making has worked out well for us. Your firm, despite certain limitations, had a strong quarter in equities, and Goldman is known for having an excellent central risk book. Your institution understands this too and engages in substantial internalization work. Because we execute a lot with them, and since they have greater capital, they can take on more risks effectively. This isn't just a newly discovered strategy for us; it's significant because it aligns very well with our firm's culture. There are no conflicting discussions about how to attribute profits or bonuses that can detract from excellence. That doesn’t occur at Virtu. We see great potential here. I understand I can't provide specific quantification, as it’s difficult to measure, but it significantly contributes to the growth of our options business and even our ETF Block business. I believe this represents a major competitive advantage that we haven't effectively communicated, and we will keep working on improving that.

Okay, great. That’s it. Thank you very much.

Thanks, Ken.

We now turn to Chris Allen from Citi. Your line is open.

Good morning, everyone. Congrats on the strong results.

Thank you. I should have mentioned that to Rich, but he's a big brown sand. I don't want to rub it in.

Yes. I know you missed your opportunity there. Can you provide more details on some of the areas you mentioned that performed well in the quarter, such as FX, commodities, and European equities? Energy improved in the last quarter and seems to be continuing that trend at the start of this year. However, when looking at FX and European equities, the underlying indicators from both are somewhat mixed. I'm curious where you see strength in those areas. Were there any competitive pullbacks or unique situations? I'm just trying to understand the trajectory of things that may not be as clear.

Thank you for your question. We evaluate opportunities based on volume, bid-offer spreads, and similar metrics in each segment we engage in, and we experienced some outperformance. The metrics were mixed. In the FX segment, which has been relatively less volatile than others, volumes increased by 7% and FX volatility rose by 16%. We've implemented some internal changes and enhancements that have been effective. Although we don't discuss this asset class as frequently or disclose its performance separately anymore, it continues to be an important area of growth. We also saw positive activity in our commodities segment, with energy volumes up by 18% while volatility decreased by 10%. It’s a mixed scenario, but we are very much driven by volume in that space. Additionally, I want to emphasize the significance of internalization within our firm. This impacts all desks, especially in Europe. Our ability to transfer large positions within our European block market making has enabled other desks to manage them effectively, and to explore new products and opportunities globally has significantly contributed to business growth. Despite a strong focus on retail, we are a very diverse firm. I take full responsibility for this situation because I have consistently highlighted these proposals. Our business is largely independent of customer order flow, and that segment continues to grow robustly. I am pleased with our growth trajectory. As Joe mentioned earlier, we operate this firm with a long-term perspective rather than focusing on quarterly results. While I understand this is a common assertion among CEOs, it truly represents our approach, with the expectation of fluctuations in quarterly results, both positive and negative. Over the longer term, we anticipate sustained growth, and our discipline in managing expenses and capital will ultimately benefit our investors. I am one of those investors, and I am invested in the stock.

Got it. And then just on the organic growth initiatives, where are you seeing growth? I would imagine you're seeing increased traction on the option side, but maybe you're seeing a more challenging environment in crypto. I'm just trying to think about what's expanding and what's being challenged from an environment perspective.

Yes. Great question. I think what's working well is options and Block ETFs. Both had nice quarters. You're right, obviously, crypto; a year ago, before the FDX debacle, I was talking about the opportunities. We are still market making in crypto; we obviously pulled back and some platforms don’t exist anymore, but we resumed limited market making, and we continue to be very, very excited about the initiative called EDX markets with Citadel, Schwab, Fidelity, and others. We're excited about that. Fixed income, again, not a contributor but has a decent trajectory. The ATM business, which again, is incredible scalable and fits into Virtu, is something, again, over the long period of time, that's going to grow. But Block ETF and options were the driver this quarter. Thank you.

Our next question comes from Dan Fannon from Jefferies. Your line is open.

Thanks. Good morning. One more on the new initiatives. You've been talking about the success and the growth of these for an extended period of time. When we think about a year from now or two years from now, what are the goals? Are there benchmarks we can hold against to talk about success? Because there's growth and it's continuing, but the markets like options volumes are growing. So trying to gauge your success versus your internal targets or goals is there are things we could point to or you could lay out to help us gauge that success outside of just growth?

Boy, that’s a great question. Again, I'm always loath to subdivide and provide like I know granularity around our various businesses because that's a two-edged sword. If we provide granularity around our businesses, we've got to bid one quarter when we don't satisfy the metrics, everyone runs around with their hair on fire. Our FX business was going out of business five years ago, I vaguely remember, and it clearly has not. So from our perspective, in my remarks, I noted it was $650,000 per day in the quarter, which was the highest in the first quarter of 2022. I mean that's a meaningful contribution to the firm. I look at that and say, absent market forces, what will that look like in the next couple of years? Yes, we think that amount should grow, and it should be a seven-figure amount. I will say that here, and I've said that to our Board, and that’s the ambition.

As you said, our goal is to have $1 million of contribution in a medium-term type of period, a three-year-ish type of period. It'll depend on the market conditions, and the opportunity. Looking at that chart on Page 5, you can discern a nice up-and-to-the-right type of growth. We expect that to continue.

Okay. No, that's helpful. Longer-term targets are helpful. And just one on expenses. It doesn't look like you guys updated your expense guidance based on the first quarter and how things are tracking. Does that outline remain valid for the year?

I think so. You have to look at the major categories of expenses individually. Our first quarter has typically the highest nominal amount of compensation, and then the percentage falls out of that. Looking at the full year, our comp ratio for the first quarter was up looking at 1.5% type of percent. I’d expect the same trend you've seen in prior years in terms of the dollar amount that has accrued. Communication and data processing are tracking on an annualized basis, a few percentage points higher, 3%, 4% higher. Again, that's just we're in an inflationary environment. We've worked hard at weeding that out. We've done a good job there. Overhead, same thing, a little bit of inflation there. There’s some strong dollar in 2022 impacting that, making it a little lower on a constant dollar basis. The typical stuff you would expect expenses running the firm are up a little bit. I'd expect we would update the guidance, and I would expect it to be pretty consistent with what we provided in the past.

Okay. Thank you.

Thank you, Dan.

Our next question comes from Michael Cyprys from Morgan Stanley. Your line is open.

Hi, good morning. I'm here in place of Mike and I have a question about the current market conditions. I'm interested in how the market has changed from Q1 to the current month of April. If I understood you correctly, commodities and foreign exchange appear to be performing well. Can you share your insights on how those areas are evolving? Are there specific market conditions that Virtu would prefer?

Thanks. Did Alex Kramm suggest that question? Just joking. We have worked hard to focus on the quarter and avoid discussing what has happened in April. Today is April 20, and I don’t really have any trading days to reference, maybe around ten in the 62 days of the quarter. It's early, and I wouldn't discuss it anyway. I've mentioned before that the best marketplace for us is one with a rising market where people are confident, moving portfolios, and making money, as that leads to increased trading activity. Volumes are crucial to our firm as we are a market-making firm that profits from the offer spread. A larger bid-offer spread through our systems usually results in improved outcomes and returns. Volatility can drive volume, though it doesn't always. There can be certain types of volatility that are beneficial, while others can be harmful. We prefer markets with high confidence and certainty where investors are active and feel positive about their decisions. In 2023, the market will be mixed, with significant uncertainty, both geopolitical in Europe and Asia, and central banks trying to navigate inflation and expectations. Additionally, our country is facing a debt ceiling issue that affects investor sentiment. These factors create a variable backdrop. However, looking ahead, we are very well positioned over the next few years to provide the liquidity needed as investors navigate these challenges. I'm doing my best to answer your question sensibly without discussing April, as I mentioned I wouldn’t.

I appreciate that. Doug, thank you for all the color. For the follow-up, this may sound a bit greedy here because I know you guys are working on a lot with all the organic growth initiatives going on. But as you look at the platform, are there any white spaces that you think there is where you could potentially start from scratch and build the business like the options business?

Yes. It's a great question. We think about it all the time. The more widgets we can put through our system, presumably in a profitable amount, the more money we can make, and that's all we focus on. I would say it's not white, but it's pretty darn close to white, which is fixed income and credit. All the elements are there or are being constructed, right, to respond to RFQs and pricing products. Distribution is always an issue. That's why we partner with MarketAxess and Tradeweb, both of whom are terrific partners to us. I look at that as a greenfield opportunity. I'm aware, obviously, that there are firms we compete with that have meaningful presences there. The Jane Streets, the Flow Traders, the Citadels, et cetera, are terrific firms. But again, I would emphasize it's still very early for us in options. So again, it’s not quite white, but it’s not black either. It's probably wider than black in terms of opportunity to continue this very painful analogy that I started where you provoked me. That’s where we stand.

Thank you for all the color.

We now turn to Alex Kramm from UBS. Your line is open.

Yes. Hey, good morning, everyone. Thanks, Doug, for the shout-out. I was definitely going to ask the question. Now, I have nothing left; I do have follow-ups on things we've already discussed. Just to come back to the options business; someone asked about the organic trajectory. I think last quarter, you talked about the number of symbols you've rolled out and maybe some markets you're slowly expanding into. Can you be a little bit more specific as we think about the next four quarters of where you want to be in terms of symbols and markets? What are those underlying metrics you're looking at to see that the business is actually getting bigger?

Okay. Yes. I have mentioned this in earlier quarters. One of our main emphases in 2023 is going to be in Asia. We have ramped up and staffed up there. We moved really high-caliber people from New York who moved out there. There’s significant opportunity there, obviously, with competitors, but there's a robust market in Japan and India for index options, and we are a participant there. We have internal metrics on where we want to be at the end of 2023. They’ll get included in the large mix of non-customer market making and market making as we report. It's meaningful and a significant growth opportunity. I’ve challenged the desk and the folks to grow that business; that's something the Board will hold us accountable to. We are excited about that. I think there are opportunities in cross-asset class options around energy, etc. These are all things, as I said, before using my baseball analogy, where we continue to be in the early innings. Firms that have been doing well for 30 years, we are not near their excellence in size. The goal is being named in the same breadth, and we have the technology, distribution and capital, clearing. Now it's just a question of execution. For the last 15 years, since the time when I was invited into the firm, that's what we've done. We are good executing. I don’t measure success or excellence quarter-by-quarter. I know that’s what we have to do as a public company. Looking at that business in the next two or three years, that business could double or triple in size, and that's our goal.

Okay. But too early to give us updates on progress on symbols and things like that, right, since you mentioned them before?

Yes. Honestly, I don’t have a count of the symbols right now, so I’m unable to provide that information.

Maybe helpful in the future.

Okay.

And just lastly, we do have a couple of minutes left. If you would like to ask a question, please press star one.

Elliot, thank you very much, and thank you to our investors and research analysts for their hard work and great questions. We look forward to speaking with you in the summer. Thank you all.

Ladies and gentlemen, today's call has now concluded. We would like to thank you for your participation. You may now disconnect your lines.