Steve Cohen Invests in Dark Pool Aiming to Defang Speed Traders

(Bloomberg) -- Steve Cohen’s Point72 Ventures LLC is backing a dark pool that aims to give big investors shelter from the speediest traders, becoming the first to invest in Imperative Execution Inc., according to the two companies.

Imperative, run by former Point72 trader Roman Ginis, will seek to reduce “slippage,” the tendency of a big purchase to drive prices up or a big sale to push them down, eating into large investors’ profits. Some believe the fastest traders are responsible for moving prices against them, forcing them to use dark pools -- secretive, less regulated platforms that help mask hefty trades.

Sanctuaries from speed traders aren’t new. IEX Group Inc. launched a dark pool, which it eventually converted into a full-fledged stock exchange, that uses a coil of fiber-optic cable as a speed bump, though it accounts for just over 2 percent of total U.S. stock trading. There are dozens of other dark pools, many run by big banks.

Point72 declined to say how much it was investing in Imperative.

The Wall Street Journal reported on Point72’s investment earlier Tuesday.

To contact the reporters on this story: Nick Baker in Chicago at nbaker7@bloomberg.net, Saijel Kishan in New York at skishan@bloomberg.net.

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Peter Jeffrey, Josh Friedman

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