I read this article when it was first published, and it was what first sparked my interest in the exchange side of the equities world. There's a lot of junk inf

I read this article when it was first published, and it was what first sparked my interest in the exchange side of the equities world. There's a lot of junk information on the internet on these topics, and as a result they're difficult to read up on. A common error I've seen is articles that imply that flash orders and high-frequency-trading are the same thing, which is incorrect. "Automatic programs began issuing and canceling tiny orders within milliseconds to determine how much the slower traders were willing to pay I originally understood this to mean that parties were 'painting the tape' by causing trades to appear with prices different to what the actual market price is. But that's not it. In the scenario described, it's not trades that are being issued and cancelled, but orders. As in, an opportunity to trade if the other party matches. I don't think it would be possible to coordinate a situation of sniffing out the best price as described here. Markets have queues, and if you want your order to be filled then you put it in the queue where it sits until you cancel it or it gets filled. It can only be filled when it's at the front of the queue. So participants in the market compete for queue spots at each price point from the moment the market opens. That would be exchange dependent, but that just emphasises the point. If one exchange did this and another didn't then the exchange that didn't would get more business because their prices would be better. A couple of years ago if you entered a limit order for $26.40 with the market at $26.10 odds are excellent that most of your order would have filled down near where the market was when you entered the order - $26.10. Today, odds are excellent that most of your order will fill at $26.39, and the HFT firms will claim this is an "efficient market." Citation required? I don't see how this can be true. If the market is at 26.10, then there will be orders in the queue at price points around that. If the market is scared, then the spread will be wide, but that's to be expected and accounted for by the fear, not by conspiracy. Despite all these problems, the criticism of the flash order culture looks sound. A flash data stream could give a party the ability to cancel stuff they have in the queue earlier than they otherwise would, and to get to the queue faster on new information. It seems wrong that there should be a certain type of information to be available only to certain parties. I think the major exchanges have stopped doing flash orders now though. There was a lot of press about the SEC reviewing it after this article last year.