SEC Launches Review Of High-Frequency Traders'' Market Abuses
SEC Launches Review Of High-Frequency Traders'' Market Abuses Nearly 8 years have passed since Michael Lewis published "Flash Boys", raising awareness of the relatively new practice of high-frequency trading and its transformative impact on markets, allowing the most technologically-advanced traders to effectively see a picture of the market that''s nanoseconds ahead of what their non-NFT peers see, giving them a massive advantage. Now, the SEC is finally considering changing the rules of how stocks are priced and traded to stop exchanges from incentivizing brokers (nowadays, particularly retail trading brokerages that have seen an explosion of activity in the past couple of years). The news has slammed shares of HFT market-makers including those of Virtu, the biggest electronic market-maker. Citadel, the hedge fund that has a separate market-making business that purchases order flow from Robinhood, also could be hurt by the new rules. A few months ago, after Robinhood and its rivals cut off trading in Gamestop, prompting the stock to crater (as thousands of furious GME bulls claimed), we explained how Robinhood receives payment from Citadel and a handful of other major HFT market makers allowing them to front-run retail order flow and guarantee profits.
SEC Launches Review Of High-Frequency Traders'' Market Abuses
SEC Launches Review Of High-Frequency Traders'' Market Abuses Nearly 8 years have passed since Michael Lewis published "Flash Boys", raising awareness of the relatively new practice of high-frequency trading and its transformative impact on markets, allowing the most technologically-advanced traders to effectively see a picture of the market that''s nanoseconds ahead of what their non-NFT peers see, giving them a massive advantage. Now, the SEC is finally considering changing the rules of how stocks are priced and traded to stop exchanges from incentivizing brokers (nowadays, particularly retail trading brokerages that have seen an explosion of activity in the past couple of years). The news has slammed shares of HFT market-makers including those of Virtu, the biggest electronic market-maker. Citadel, the hedge fund that has a separate market-making business that purchases order flow from Robinhood, also could be hurt by the new rules. A few months ago, after Robinhood and its rivals cut off trading in Gamestop, prompting the stock to crater (as thousands of furious GME bulls claimed), we explained how Robinhood receives payment from Citadel and a handful of other major HFT market makers allowing them to front-run retail order flow and guarantee profits.