Allston Trading Says High-Frequency Firm Is Open to Partnerships

Allston Trading LLC, the high-frequency market maker based in Chicago, will consider partnerships that help it boost sales, according to Raj Mahajan, its chief executive officer.

The company doesn’t comment on discussions with other firms, according to a statement from Mahajan. The Wall Street Journal reported yesterday that Allston and RGM Advisors LLC are in early merger talks, citing people familiar with the matter who it didn’t name. RGM also declined to comment.

Firms such as Allston and RGM make money through rapid-fire strategies that use computers to buy and sell stocks, commodities and other assets on electronic exchanges. Profits for the industry have been squeezed as share volume fell in the U.S. Daily trading by high-frequency firms averaged 1.6 billion shares a day last year compared with 3.25 billion in 2009, while profits fell to $1 billion from $5 billion, according to data from Rosenblatt Securities Inc.

“Allston continues to implement its strategy to double the firm’s net trading revenue,” Mahajan said, according to an e-mailed statement. “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.”

Austin, Texas-based RGM Advisors LLC was founded in 2001 by Robbie Robinette, Richard Gorelick and Mark Melton. The firm has more than 100 employees and an office in London, according to its website.

In a statement emailed by a representative, Gorelick, the CEO, declined to comment on merger reports.

“As a matter of policy, RGM Advisors does not comment on rumor or speculation about potential transactions,” he said. “We are focused on continuing to grow our business in a variety of ways.”

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