October 9, 2012

Fake Quote Algo Activity, 40000 Quotes per Second per Symbol

Fake quote Algo activity animation per Nanex.

The trading algo was posting quotes at a high frequency – 1,000 quotes per 25 millisecond per symbol – quotes that will never turn into trades but are intended to draw out price from other market participants.

Nanex is alarmed.

This is just a trader showing off a new piece of trading hardware/software - soon to be eclipsed by the other high-frequency traders who get a faster piece of hardware/software to beat this.

Perhaps some of them will use hardware like the Solace Messaging Appliance, which generates messages at the rate of 10 million/sec.

Meanwhile the SEC is trying to get a front-seat to watch high-frequency trading action by paying Tradeworx $2.5 million per year.

Manoj Narang of Tradeworx 
Where else are they going to be able to get these capabilities?” Mr. Narang said. “They are not available from anywhere other than high-speed trading firms. We’re the only ones who possess it.

Tags: fake quote algo, quote spammer algo, high speed trading algo, high frequency trading algo, sec tradeworx, sec midas tradeworx, sec contract high-frequency trading