Steven Cohen is backing an electronic trading startup that is taking aim at high-speed trading firms.
The private equity arm of Cohen’s firm invested an undisclosed amount of money in Imperative Execution, The Wall Street Journal reported on Tuesday. Imperative’s CEO, Roman Ginis, is a former trader for Cohen, learning first-hand how high-frequency traders can chip away at profits.
A spokesperson from Point72 confirmed the deal to CNBC.
Ginis worked for the part of Cohen’s Point72 that uses computer-driven strategies to trade, an activity that is vulnerable to high-frequency traders using software programs to chase price moves. Imperative Execution is building a so-called dark pool where orders to buy and sell stocks are protected from traders hunting down bids and offers.
Matthew Granade, Point72 Ventures’ managing partner, said in a statement, “Most of Imperative’s competitors attack the problem with speed but speed is a nuclear arms race. Imperative uses a different approach to prevent leakage of information from an order that we think is much more enduring.”
Other electronic trading sites have sprouted up to combat high frequency trading, including IEX, or Investors Exchange. Imperative’s dark pool, called IntelligentCross, was approved by the SEC earlier this year, and the Stamford, Conn., company aims to start trading in May.
Read the full WSJ story here.