Who are the high-frequency traders?

May 17, 2010 | By Jim Kim

High-frequency trading (high-frequency trading news) is once again in the spotlight, as they are alternately cast as villains who tanked the market or near-heroes who add liquidity. Lost in the debate about high-frequency trading is the simple question: Who are these guys?

The New York Times says this "club consisting of 100 to 200 firms are scattered far from the canyons of Wall Street. Most use their founders' money to trade. A handful of these firms are run from spare bedrooms, while others, like GetCo in Chicago, have hundreds of employees." They strike me as bit of a mish-mash, part SOES bandit, part classic high-tech start-up.

The Times profiles Tradeworx, which sits atop a hardware store on the Jersey shore. "Inside the humdrum offices of a tiny trading firm called Tradeworx, workers in their 20s and 30s in jeans and T-shirts quietly tend high-speed computers that typically buy and sell 80 million shares a day." On May 6, as the markets heated up, someone walked up to a computer and typed the command HF STOP, which apparently means sell everything, and shutdown.

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- here's the profile