I heard is's called gaming and the countermeasures are called "anti-gaming"
In finance, do some trading algorithms work by explicitly trying to manipulate/break other algorithm
- Thread starter Albert A. Sanchez
- Start date
Impossible to know for sure unless you have direct knowledge of how the 'target' algo and the 'predatory' algo work (assuming there's such a thing). One thing I've noticed in futures that use pro-rata/k algo order matching is over quoters getting clipped then puking, doesn't necessarily imply algo gaming but it is one short term participant taking advantage of another.
I heard of that :
https://en.wikipedia.org/wiki/Spoofing_(finance)
https://en.wikipedia.org/wiki/Spoofing_(finance)
I see spoofing and over quoting are similar in appearance (large orders that aren't intended to be filled entirely), but they differ in what they're trying to achieve. Also to be clear I don't think they're the big bad wolf that people like to believe.
Over quoters aren't trying to get other traders to improve their price (unlike spoofers), they're simply trying to catch a piece of incoming market orders. To compete as a market maker in k algo/pro-rata markets it's tough not to have more size out there than ideally want to trade. Both spoofers and over quoters are subject to the risk of being filled on their entire order(s).
yes. some old ones were finding icebergs, pushing around poorly designed automarketmakers ,spoofs.