Rogue high-speed traderbots chaffing the market with thousands of nonsensical transactions every second
From: The Ilana <>
Reply-to: The Ilana <>
When: Mon, 20 Sep 2010 16:56:13 -0600
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Rogue high-speed traderbots chaffing the market with thousands of
nonsensical transactions every second
Nanex, a data-services firm, has discovered mysterious high-speed
trading bots operating on the major stock exchanges, executing
thousands of nonsensical transactions per second (for example, they
may offer to buy a stock at a price much lower than the current quote,
or to sell it at a much higher price). No one knows what these bots
are trying to do: is just just a DoS attack on the exchange? Radar-
chaff to prevent other bots from detecting another strategy? Bad code?
Some call it “algorithmic terrorism” though Nanex is calling them
“crop circles.” Perhaps they’re merely “quote stuffing” or “market
spoofing”—the jargon is delicious.
Here we see a “flag repeater” being executed on the BATS Exchange, the
third-largest equity market after the NYSE and NASDAQ. 15,000 quote
requests were made in 11 seconds in a repeating pattern. Each
iteration upped the quote a penny until $9.36, and then the algorithm
went down the same way, a penny at a time.
Market Data Firm Spots the Tracks of Bizarre Robot Traders
(via O’Reilly Radar)
Primer on “high frequency trading”—AKA stockbots
Sent from iPhone, sorry for the typos
