Flash orders could be banned by SEC
Interesting name, flash orders. From The Wall Street Journal:
High-frequency trading, a lightning-fast, computer-based trading technique, now accounts for more than half of all stock trading in the U.S. Flash orders represent a much smaller part of the market, and are used by high-frequency and other traders....So high speed, non-human computerized trading is 50% of the daily volume, with a goal to increase flash trading. Running more orders through dark pools is growing as well.
Beyond the official scrutiny lies a tussle among exchanges for market share as high-speed trading becomes a central cog of the market.
Flash trading at Bloomberg.
Does flash trading + computing power = a form of front running?
Front running & dark pools at Wikipedia.
Significance to you?
Besides the growth of dark pools' trading, plus the existence of the unregulated shadow banking system which collapsed pretty spectacularly last year, & an explosion in computerized trading - massive volatility in minutes to split seconds that could crash the stock market. Again. And again.
Flash trading gives unknown "players" an unknown advantage & certainly looks like it's close to impossible to "catch" illegal front running, or at the least, opens the door a little wider to tempt one to front run.
New & improved regulations must address all these risks to the system or the next time the market crashes, it'll make the crash of Fall 2008 look like an after school special.
Have you talked to your legislator to push for stiffer Wall Street regs?!
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