3 ms·

I believe they also front-run (I think this is the correct term) big orders. So if HFT bot at BATS sees someone buying all of the lower priced shares of IWM, th

I believe they also front-run (I think this is the correct term) big orders. So if HFT bot at BATS sees someone buying all of the lower priced shares of IWM, the HFT bot tries to buy the shares of IWM at other exchanges that are less than the shares left at BATS and before the other exchanges can update prices from the BATS sale. They have this information about the large order microseconds before the non-HFT firms.

kasey_junk 11y ago
This is completely incorrect on at least 2 counts. First of they did that it wouldn't be front running, which requires both seeing your order before it hits the exchange and a fiduciary duty to you. Second the hft doesn't buy up existing shares from someone else on the other exchange they change the price of (or cancel entirely) the shares they themselves are offering on the other exchange.