4 ms·
Google "HFT frontrunning". The issue is that HFT algorithms can use their superior speed and the ability to cancel orders to essentially figure out what instit
by bokonist 14y ago
Google "HFT frontrunning". The issue is that HFT algorithms can use their superior speed and the ability to cancel orders to essentially figure out what institutional buyers are bidding, and then front run the market to buy up shares in front of them. This would be prevented in my system by the black box auction and trading on an interval.
- sseveran 14y agoThere are many opportunities for institutional investors to trade in exactly the manner you suggest. NASDAQ runs the opening and closing cross as well as other intra-day crosses. Other platforms allow private crosses, dark pools allow crossing not in public and today 1/3 of all shares are crossed internally on brokerage platforms. Institutional investors have many opportunities to trade in the dark. There is a price to be paid for instantly accessing liquidity in the market, and it is much cheaper than it used to be.