A Glimpse at Predatory Prop Trading at Work

[HoCk]

Cool little debate over on ZeroHedge about predatory algos getting in front of your orders.

http://www.zerohedge.com/article/glimpse-predatory-prop-trading-work

I've figured out a few ways to "spoof" these bastards when they show up and then hit into them... but its getting harder. They're getting faster and smarter.

Sometimes you can figure out what will trigger them and you can game them... but it never lasts longer than a few weeks.

 

[trendmomentum]

If you can't beat 'em, join 'em. Stop fighting the trend

 

[makloda]

It not a rocket science to use Algos to work orders in smaller market cap stocks. For example:

http://www.interactivebrokers.com/en/trading/orders/arrivalprice.php?ib_entity=llc

I run all my stock orders through the IB algos now and my slippage (especially on the illiquid small caps) is way down.