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Betting on the bogeyman

Do you still hate the devil so much if the devil is working for you? We'll find out soon. Odds are there'll be a little love in that relationship.

Virtu Financial this week filed for an initial public offering. That means for the first time, investors will be able to buy into a high-frequency trader. That's right, now you can bet with the bogeyman.

High-frequency trading, program trading based on algorithms to buy and sell at computerized speeds, takes a lot of heat. (Learn more about it here).

For instance there have been discussion about whether high-frequency traders get an edge, fairly or unfairly, when certain economic data are released. They also get wrapped up in scary terms like "dark pools" and "flash trading." And events like the Flash Crash, Knight Trading's demise, the BATS stumble, and pretty much any dipsy doodle in the market these days gets blamed on the practice.

"High-frequency trading gets blamed for everything, even if it really isn't about high-frequency trading," said D. Keith Ross, CEO of PDQ Enterprises, another such outfit, noting the events above were more about technology failures than anything else. (Related: Ross on trading pauses)

Still some major investors remain unimpressed.

"I think it is very stupid to allow a system to evolve where half of the trading is a bunch of short-term people trying to get information one millionth of a nanosecond ahead of somebody else," said Charlie Munger, the right-hand man to billionaire investor Warren Buffett, at the Berkshire Hathaway investor confab last year.

"It's legalized front-running. I think it is basically evil and I don't think it should have ever been allowed to reach the size that it did," he continued. "Why should all of us pay a little group of people to engage in legalized front-running of our orders?"

Munger isn't the only one. One noted economist, Michael Spence, has argued high-frequency trading should be banned. And regulators have periodically expressed qualms about the practice and its effect on markets, particularly regarding the Flash Crash.

Maybe Virtu will change the discussion because investors will be able to now buy into high-frequency trading, instead of just complaining about it.

"If, over the year, their high-frequency trading program prospers, this gives investors the opportunity to ride with them," said Ross.

Indeed, look at the performance of Virtu's nearest publicly-traded competitor, KCG Holdings, which was created out of Getco, a high-frequency trading pioneer, and the rubble of Knight Trading. It's been fairly strong over the last few months, although it took a dip shortly after its creation. (You could argue KCG is the first publicly-traded high-frequency outfit, but it's really a mix of trading operations. Virtu is more of a pure high-frequency play).

Another consideration: Now a high-frequency trading firm will be opening itself up for the public scrutiny of the market. Publicly-traded companies have pretty rigorous disclosure. Maybe a little more transparency into how a high-frequency trader makes its money will help ease concerns.

Of course, like any other company swimming in the public-investment waters, maybe Virtu will become driven by short-term concerns like making quarterly profit numbers and beating analyst projections to the point where it is losing sight of what's right for itself and its business.

That's a devil we already know.

Allen Wastler is managing editor of CNBC Digital. Follow him on Twitter @AWastler. You can catch his commentary here and on CNBC Radio. And check out his fiction.