An early high-frequency trader that helped invent the business of buying and selling stocks in milliseconds now faces falling profits and an employee exodus.

Dave Cummings, an engineer and former pit trader at the Kansas City Board of Trade, founded Tradebot Systems Inc. in the spare bedroom of his house in 1999 and gained wealth and notoriety from ultrafast trading. In its heyday, Tradebot made millions of small trades daily, accounting at times for more than 5% of U.S. stock-trading volume.

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