schwalbeA few years ago, after Van der Moolen filed for bankruptcy, seven new firms were created by former VDM traders. Two of them folded in recent years (Alphabay in ’10, Aespen in ’11) and this week another one threw in the towel.

CIT, or Cologne Independent Traders, was a company build on the remains of Van der Moolen’s German and Swiss remains. It has been day trading in stocks and ETF’s from their offices in Cologne and Pfäffiko, Switzerland. Firm counted 25 employees.

In the press they are branded as the first victim of the tougher German High-Frequency Trading (HFT) rules. The “significant” burden of the European regulations is too much for the firm. While the Financial Transaction Tax (FTT) is destructive for the economy and the HFT regulations by the Germans are silly, I believe this is a schwalbe by CIT. I don’t buy the HFT regulations excuse. Firm wasn’t tackled by new regulations.

While 2011 earned a profit of 3,4 million, the year 2012 has probably shown a loss because of the declining volumes and margins in the market. With general market conditions getting more challenging every year, every company needs a sharp edge to survive. Rumor has it CIT doesn’t qualify as a top of the line HFT trading shop, instead it has got nothing to do with high frequency trading at all. They lack the technology – according to sources.

It’s fine to blame it on the rain, but really – it’s okay to collapse on ordinary trading losses. There’s no referee handing out free kicks in this game.