News for hackers. Stuff that matters.

A comment on For the Love of Money. Parent comment

Re:For the Love of Money by foobarqux on Monday January 20, 2014 @09:53AM (#7089761)
>Now, you seem to be suggesting that the HFT sees your order before it hits the matching engine

HFTs pay brokers for order flow so they get orders before they hit the exchange and decide to trade on them from their own book (at NBBO) or pass them on to the exchange. Besides jumping the order book at the exchange they get advance information on orders about to hit the market.

[ Parent | on HN ]
Re:For the Love of Money by gd1 on Monday January 20, 2014 @10:27AM (#7089927)
True enough, I was discussing direct market access. If you're going through a third party, it's up to you to vet them and make sure they are trustworthy. I agree almost word-for-word with Optiver's submission on payment for order flow:

http://www.optiver.com/pdf/FSA%20consultation%20on%20PFOF%20...

I believe brokers in the US are now legally required to reveal any such arrangements to their clients.

[ Parent | on HN ]