Meme stock frenzy not exclusively driven by retail traders: Virtu CEO Cifu

The frenzied activity involving so-identified as meme stocks is getting driven by a lot more than just retail traders, the CEO of marketplace maker Virtu Economic explained to CNBC on Wednesday.

“There is certainly a ton of establishments, qualified traders, speculators, what ever you want to connect with them, engaged in this in equally the dollars equities sector and the selections market,” Virtu’s Doug Cifu explained on “Power Lunch.” “This is not entirely a band of retail traders trading these stocks,” he included.

Cifu’s comments come as the spotlight has returned to meme shares that are well-liked on on the internet community forums these as Reddit. Although the saga commenced in January, with GameStop then serving as the most prominent illustration, retail traders have broadened their target to other securities.

AMC Amusement has these days been a favored on Reddit boards and, extremely just lately, Clover Overall health and Thoroughly clean Vitality Fuels have captivated consideration.

Clover Health entered Wednesday’s session up a lot more than 140% so far this week on your own. However, in spite of an initial pop to begin the buying and selling day, Clover Overall health closed down 23.6%.

Thoroughly clean Vitality Fuels soared extra than 30% Wednesday.

Reddit traders have appeared for shares with sizable limited positions, obtaining shares and connect with solutions in an attempt to drive up the cost.

“They are heading for anything at all. … You have to test to determine out which just one is up coming,” CNBC’s Jim Cramer mentioned earlier Wednesday, while likening the meme-inventory fad to gambling, not just investing.

Cifu also co-launched Virtu in 2008, and the New York-based mostly economical agency has turn into a single of the world’s most significant sector makers, which perform a important part in executing stock trades.

“We have two sides to our business. We have a retail company and an institutional small business. It should not be shed on people: This is not only a retail phenomena,” Cifu explained, referring to the meme shares.

“We want to make confident that you can find correct acceptable, persons really know what they’re undertaking and they get full transparency,” he added. “But if not, that is what markets are here for, and they are operating really effectively.”