‘Flash Boys’ exchange IEX aims to price out predatory traders – 14th August 2017

IEX Group Inc plans to push what it views as predatory trading strategies out of the market by raising fees for firms that cash in on stale prices, the stock exchange operator said on Friday. Much like the high-speed trading firms it is trying to thwart, IEX uses algorithms to analyze orders and trades that occur on exchanges. It has been tracking firms that try to capitalize on predicting price moves using what it calls a “crumbling quote indicator” (CQI) for some time now, but only just announced its plan to start charging them more. Many of the shares being targeted come from market-making firms that use high-speed algorithms to provide liquidity to the market, profiting from the difference between bids and offers. “If we can stop HFT (high-frequency trading) market makers from getting picked off by predatory HFT strategies, the byproduct should be more liquidity and a better experience for folks interacting on IEX,” IEX’s chief strategy officer, Eric Stockland, said in an interview.

 

John McCkrank – Reuters