“Two of the largest independent U.S. high-frequency-trading firms are in early merger discussions, as a downturn in trading opportunities has spurred cutbacks and tie-up talks among rivals.

“RGM Advisors LLC and Allston Trading LLC have discussed a deal that would combine their respective strengths in automated stock trading and futures markets, according to people close to the talks.

“New technologies have fueled a surge in computer-driven, rapid-fire trading over the past decade, boosting the profile of independent, proprietary “prop shops” that trade for their own benefit, while also prompting big banks to embrace high-frequency techniques.

“High-frequency traders use sophisticated hardware and mathematical models to rapidly buy and sell securities and other instruments on exchanges around the world, pocketing profits on often-tiny shifts in prices.”

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