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high frequency trading posts

SEC plans to ban 'flash trades'

Posted Aug 4th 2009 7:00PM by Connie Madon (RSS feed)
Filed under: Insiders, Competitive Strategy, Market Matters

The SEC plans to ban "flash trades." What are flash trades? Flash trades give some brokerages an advance look at orders. Most major exchanges, except the NYSE Euronet, use the flash trade system. It gives clients a look at orders a fraction of a second before the trades are routed to rival platforms. The practice is deemed unfair and is the reason for the ban.

A ban would reverse a 2004 SEC ruling permitting flash trades. Flash trades account for only 2.4% of shares traded in the US. The proposal to ban the activity by the SEC is subject first to a vote by SEC commissioners, then feedback is requested for a period of between 30 and 90 days. Then, commissioners come back and vote on whether or not to enact the ban.

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High Frequency Trading gets high frequency attention

Posted Aug 3rd 2009 2:40PM by Todd Harrison (RSS feed)
Filed under: Technical Analysis, Stocks to Buy

The post was written by Minyanville Contributor James Anderson

High Frequency Trading (HFT), which is the use of computer models to enter trades, has received a considerable amount of attention in the blog space as well as the financial press. There are number different styles of HFT, but the most important part is the speed at which these trades are entered and executed.

The fastest possible computers are located adjacent to the computers that receive orders at the stock exchanges, and I when I say adjacent, it's not the building next door, it's literally feet away. This world operates in milliseconds, and even the speed of light in a fiberoptic cable is not fast enough for anything other than colocation.

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