Hey Eric,
I have to say, unless it's part of a verifiable attempt to engage in a quasi-"tape painting" effort, there's nothing wrong with it at all.
Traders require the ability to cancel an order whether it's been on the box for 30 or .5 second(s), given that market changes often occur at what seem like superluminal speeds.
For a desk holding a large order - in particular, a large order requiring employment of a VWAP strategy - there might well be bids (or offers) that are displayed and, with a slight change in volume or the quote, are quickly withdrawn. Some institutional desks promise reduced commissions for any trades done outside the VWAP (in the prescribed time basis; at/under for buys, at/over for sales) for buyside customers; a couple of hundred shares in volume can change that number and put your target execution price a few levels above or below the inside in the blink of an eye.
Program traders/index arbitrageurs also enter and leave the market quickly to catch momentary, fleeting disparities between cash and futures prices. They perform an important function in the market(s), and I would scarcely deny them the ability to bid/offer and subsequently withdraw such, regardless of the amount of time it was displayed for.
In addition, it bears consideration that anyone who flashes a huge bid and genuinely tries to juice the market with no 'trading interest' behind their quote risks getting hit or taken. What it really becomes is a question of intent which is difficult at best to prove. If I can find it, I'd posted a message on this subject rebutting those who called flashing "fraud[ulent]" from a legal point of view.
As for misleading retail customers/daytraders...well...if you start wacking offers only because a 100,000 or 1,000,000 share high bid appears...
:-/
LPS5 |
