[jeffem]

It's sad to see a comment like this on top of HN in the same way it would be to see a misinformed post about "hacking" rise to the top of a trading forum.

I'm going to go out on a limb and say that you, and those who upvoted you, have little or no experience in financial markets. Comparing flash orders to front running a trojan is a terrible analogy. For one, the mechanics are not as you described (other commenters have touched on this). But most importantly, where this is still practiced, the market participants have voluntarily decided to do so and the order flow is openly published, unlike a hacked computer where the user is oblivious.

And even if we assume flash orders are evil, I think it's disingenuos to mention all of the SEC drama surrounding them without mentioning that several leading exchanges have voluntarily stopped the practice, and that flash orders make up a tiny percentage of total trading volume.

[jellicle]

No, it's not voluntary on the part of everyone involved.

Hint: the people doing the trades are not brokers.

>And even if we assume flash orders are evil, I think it's disingenuos to mention all of the SEC drama surrounding them without mentioning that several leading exchanges have voluntarily stopped the practice, and that flash orders make up a tiny percentage of total trading volume.

So you're going to argue, in the same post, both that flash orders are not front-running and that several exchanges, to avoid liability, have stopped doing them? Intriguing.

[MrMan]

No claim was made that exchanges discontinued flash order types because of concerns about front running, nor that any kind of liability was the reason behind the retraction.

The practice was stopped because it became unpopular due to the dramatization of HFT in the media. In the presence of a large number of fragmented equity exchanges, flash orders facilitate lower transaction costs and lower latency.

[cynicalkane]

If you're a consumer trading equities, NBBO rules protect you from being sniped at a detriment to you. In fact, flashing over ETNs is sometimes used to fulfill NBBO rules. These rules might be bad for higher-order reasons concerning liquidity and efficiency, but to a first approximation the consumer has nothing to fear from his order being fulfilled via flash.

It honestly isn't clear to me at all what you're griping about. It's like you read an article on the Internet and suddenly you're an expert on flash orders. I am not an expert on flash orders (and someone correct me if I am wrong), but it's pretty clear to me you're very confused.