Flash Orders Likely On Their Way Out; The Positioning Begins

Flash orders, the subject of so much debate and scrutiny in recent months, may soon be a thing of the past. But that means little in the battle over high-frequency trading, which is far from settled.

Late Thursday, the Securities and Exchange Commission proposed banning flash orders, which give certain large traders sneak peeks at some market activity. While some traders say they have seen improved pricing through flash orders, critics in Congress and on Wall Street say the practice creates an unfair advantage for certain investors.

News of the likely ban on flash orders didn't create much of a stir Friday. Even at Direct Edge, the one large firm that still engages in flash orders, the practice only accounts for 5% of its matched trading volume. Direct Edge accounts for about 12% of overall U.S. stock trading volume.

Read Full Article from Wall Street Journal

- Posted: 2009-09-18 13:36:23

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