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the market maker selling order book information for high prices In 2015, at most exchanges dealing in US equities, the "market maker" is reading the same tape
by patio11 11y ago
the market maker selling order book information for high prices
In 2015, at most exchanges dealing in US equities, the "market maker" is reading the same tape as everyone else hooked up to the exchange. Your scenario is literally selling access to the outdated output of an API to which non-outdated output is available for the usual subscription fee. This sounds far-fetched. I also think anyone who believes this scenario to be plausible has an idea of what "order book information" contains which is likely not an accurate representation of what they actually expose over the wire. (It's like folks who think Facebook sells customer data to advertisers. Seriously -- where's the API you can hit that does that? That needs to be a thing that exists in the world for this claim to be true.)
- dmichulke 11y agoThe way I see it, the retail clients connect to a broker platform (IB, ..) and it is there that the above scenario can happen. The broker has an account in the exchange and uses this account to offset the global position of all his clients in his system. Using this information is generally possible for any intermediary (bank, broker, ..) To be clear, I am not saying everybody does it but I think that they can, they want to and regulatory oversight in the past could not even keep track of the total stock of a broker (see MF Global).