Chicago: Infinium Capital cuts headcount, narrows strategy

Infinium Capital Management LLC, one of about a dozen large Chicago trading firms, cut 11 percent of its jobs last week as it eliminated trading in index-related futures contracts, according to a source familiar with the reduction.

The firm cut 20 jobs, leaving it with about 160 employees and allowing it to focus its trading strategy more narrowly. That follows Infinium's decision early last summer to scale back its workforce by 12 employees.

“We made these changes to focus our efforts on the commodity and energy areas,” Infinium Capital CEO Scott Rose said.

Infinium is among several firms that have shrunk over the past year as the city's trading industry, the world's largest with respect to options and futures contracts, grapples with lackluster volume that has crimped revenue and a rise in costs tied to higher technology and regulatory expense. Chicago, where the derivatives market was born, is home to about 85 trading firms, mainly smaller ones with fewer than 100 employees.

The move will allow Infinium to direct its resources to a smaller swath of trading and eliminate its need to be registered as a broker-dealer with the Securities and Exchange Commission because it won't be trading in equity-related assets.

Reducing regulatory exposure at a time of heightened federal scrutiny of high-speed trading firms could help the firm avoid future compliance liabilities. It has also tried to de-emphasize speed as a strategy.

Eliminating trading in the equity indices is significant for Infinium. In 2003, it became the first firm to provide electronic quotes for the E-mini, the smaller of two futures contracts that are linked to the S&P 500 stock index and one of the most popular contracts traded on CME Group Inc.'s electronic futures exchange.

In addition to energy and commodities, Infinium will continue to trade in fixed-income and foreign exchange assets.

Chicago-based Getco LLC, one of the biggest Chicago high-speed trading firms, also cut people over the past year as its profit plunged 82 percent last year to $24.6 million. It agreed in December to merge with Knight Capital Group Inc.

“The industry has matured to the point where firms that were hiring like gangbusters a few years ago are now taking a closer look at things like costs and headcount,” said Anthony Dostellio, a managing director at Chicago recruiting firm Objective Paradigm.