If you could go *really* fast...

[Occam]

Quote from beachhouse:


If you know your order will be front-runned, you will send an order and then immediately cancel it (quickly done by computers of course). In that way, you trick the front-running computer (operated by Goldman sucks) into buying/selling.

That's why Mary Shapiro, acting in the interest of Goldman sucks, recently said she would do something to stop "cancellation of orders," like collecting a fee.

SEC is protecting the interests of these wall street crooks!

That's pretty imaginative, but I doubt it's even remotely true. Mary Schapiro seems to be targeting quote stuffing; see, e.g.:

http://www.nanex.net/aqck/2816.HTML

If you're spamming orders in with a really bad fill rate (whatever that is -- there's lots of subjectivity there), then you're self-identifying as being part of the problem, and maybe you should quit blaming Goldman Sachs (as easy as it is to do) to divert blame from your own abuse of the quote infrastructure.

As long as you're directing your own orders (properly), the only one who's in a good position to "front run" you is your own broker. And they'd probably be pretty foolish to do so.

 

[bone]

If someone knew for a fact that their orders were being front run, then they could consistently make money spoofing and picking off whomever was front running them. It's called "flipping" the market. Ever heard of Paul Rotter ?