Flash Trading - Friend or Foe
Though much of the negative press regarding flash trading has mostly blown over, it is likely that most people never really understood the issue in the first place. And if you first heard about flash trading from a main stream news outlet, or Jon Stewart, you probably have the wrong idea. While easily 'spun' into an ugly wall street monster, it is actually completely legitimate. Check out Kid Dynamite's explanation : "Now, the intent of flash orders is to allow participants in a given market center the opportunity to improve the current bid or offer so that an order doesn't need to be routed away to another market center. An example: let's say GE is trading $11.45-$11.50 at DirectEdge , but that there is an $11.46 bid on ISLD (an ECN ). If you submit an order to sell stock at $11.46 on DirectEdge , they flash this order to select market participants to offer them the opportunity to fill your order - otherwise the order gets routed out to ISLD and you (the se...