Posted on 07/27/2009 11:21:43 PM PDT by FromLori
The growing debate over "flash" orders, amplified late last week when a prominent U.S. senator weighed in, could spell trouble for Direct Edge, the fast-growing stock trading venue that has the most to lose if they are banned.
Rival exchanges, some of whom also offer flashes, have been coy on whether they support the service and may quietly hope they are eliminated for good.
Direct Edge was the first to start "flashing" customer orders -- for fractions of a second -- to certain market members before routing them elsewhere to all participants.
The practice gives banks, hedge funds, and some dark pools, where orders are matched anonymously, an advanced look at order flow. The service helped spark Direct Edge's impressive growth, and was closely imitated early last month by formal exchanges Nasdaq Stock Market and BATS Exchange.
Direct Edge, which now has about 12 percent of U.S. equity market share, is center stage in defending flashes as an optional service that provides liquidity to those who otherwise wouldn't have it, and as a natural evolution of competition among exchanges for trading volumes.
(Excerpt) Read more at reuters.com ...
Partly owned by GS.
Sweet deal for government sachs isn’t it.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.