There’s been a lot of discussion in the press recently talking about high-frequency or “flash trading”. Flash trading is a pretty complex method of trading that uses extremely fast computers and software to probe the market and determine how much slower traders are willing to pay for a particular stock. The software does this by automatically sending and canceling small orders within milliseconds. Hedge funds and other sophisticated trading operations then use this information to game the system. If you want more detailed information check out this article.
It’s obvious that this type of trading is unfair to many investors. As a result there has been serious discussion about banning the practice. Here’s a video of SEC chairman Mary Schapiro talking about the potential ban…
