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To: NMRed
Just about any trading software is capable of manipulating markets if you can enter a large enough quantity at a given price level, you can move the market up or down.

It's not the software oir its speed of execution, but whether you a deliberately moving the prices around without the intent to sell at that price.

The latter would be market manipulation, but putting small orders in where you are still exposed, even if you plan on cancelling them is not.

You guys know too that many MM's get paid in part based on the volume they bring to the exchange, so they get part of the exchange's transaction fees. This means they can deliberately make what looks like a 'losing' quote to pull in volume at a 'loss' that turns into a profit based on the transaction fees paid by the exchange back to the MM.

In brief, don't pick a strategy based on speed, unless you can invest $30 million in equipment & software to keep up with the big boys.

10 posted on 07/24/2009 12:15:00 PM PDT by pierrem15 (Claudius: "Let all the poisons that lurk in the mud hatch out.")
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To: pierrem15
"don't pick a strategy based on speed, unless you can invest $30 million in equipment & software to keep up with the big boys." On that, we certainly agree!
12 posted on 07/24/2009 12:27:49 PM PDT by NMRed
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