Is SEC Regulation of “Flash Trading” a Sure Bet?
that take part in “Flash Trading”. According to Senator Schumer an outright ban of “Flash Trading is “imminent.” What is this Wall Street crisis about? Why should main street care about “Flash Trading” Let us review what “high-frequency trading” (HFT) is. Certain companies and traders utilize a super fast computer trading system. That computer trading system works on secret algorithm formulas and computer code. Out of the 20,000 traders on Wall Street only 2% are using the (HFT) trading system. However, on any given trading day those (HFT) trading system is now making up some 46% of the total trading volume. NASDAQ started to offer (HFT) trading in June of 2009. The way the companies and traders make money is the following; Traders will “Ping” other traders that have similar trades in the system. The traders will push the stock price that is the difference between the Ask and Bid price to the limit. The (SEC) Security and Exchange commission allows a ½ second time period before the sto
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