4 ms·
HFTs place and cancel orders with the goal of getting fills. They rapidly place and cancel orders with the goal of getting fills at the best price. They also en
by yummyfajitas 12y ago
HFTs place and cancel orders with the goal of getting fills. They rapidly place and cancel orders with the goal of getting fills at the best price. They also engage in all sorts of other practices (e.g., buying order flow) designed to get more fills.
I.e., if the nbbo for SYMB is $10.00/10.10, an HFT might place an order at $10.01, then a bunch more pile on. Then the market moves down and the HFT cancels the $10.01 order and puts in another one at $9.95, in the hope that SYMB will move down to meet him. The goal is to get a fill from an uninformed (i.e. small) trader.
In contrast, this guy was deliberately avoiding fills, and more importantly, sent an email proving this was his goal. (That latter part is very important when the illegality of a specific action varies depending on what your goal is.)
- T-zex 12y agoMy understanding is that this guy did exactly the same thing you've described a HFT would do. The intention of $10.01 is to move a price, not to get a fill.
- tptacek 12y agoNo, the intention of 10.01 is to capture the fill when the market goes there. The intention of a spoofer is to induce the market to go somewhere it shouldn't, jump the hell out of the way so as not to fill at that bad price, and then profit from the correction back to the right price.