The European branch of Texas based high frequency firm RGM Advisors is shutting the doors. The European office was based in London, and the firm is still a member of LSE, Liffe, Euronext and Eurex. Those memberships will be terminated.
RGM is around since 2001, and the company is named after the founders (Robinette, Gorelick, Melton). Their London office had a headcount of less than twenty, and they’re not the most well known HFT around – but their comments on leaving the old continent are interesting.
“Europe is a fragmented and expensive place to trade with limited opportunities in a low volume, low volatility environment.”
Sounds like a tourist who wants to have exactly the same food as he’s used to in his hometown. Nevertheless, the increasing burden of regulation is weighting heavy on prop trading firms. The possibility of financial transaction tax madness isn’t helping either.
If trading firms and market makers are leaving markets for more promising opportunities elsewhere, liquidity could be hurt. At Euronext some option classes only attract just one market maker. In Australia both Optiver and IMC have left the option market – leaving SIG on their own in several stocks.