June 18 Trading firms RGM Advisors LLC and Allston Trading LLC are in early merger discussions to combine their automated trading on stock and futures markets, the Wall Street Journal said on Tuesday, quoting people familiar with the matter.
The two private high-frequency trading firms are major customers of the New York Stock Exchange and futures platforms operated by CME Group Inc and a deal would extend a string of tie-ups as electronic traders combine or consider selling out to better-capitalized rivals, the journal said. ()
Austin, Texas-based RGM Advisors trades in multiple asset classes around the world and Chicago-based Allston Trading operates on over 40 financial exchanges in 20 countries.
"From time to time, as interesting partnership opportunities emerge or as we identify acquisition opportunities, Allston management will of course consider them if they accelerate our growth objectives but will not comment on any of those discussions unless there is something concrete to communicate," said Allston Trading CEO Raj Mahajan.
A favored tool of hedge funds and other institutional traders, high-frequency trading accounted for more than 60 percent of all futures volume in 2012 on U.S. exchanges like the CME Group and IntercontinentalExchange Inc, according to New York industry researcher The Tabb Group.
RGM did not immediately respond to a request for comment outside usual business hours.
In late December, Getco Holding bought Knight Capital Group Inc in a cash-and-stock transaction that valued Knight at around $1.4 billion creating a dominant player in the industry.