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To: aladin who wrote (34749)8/2/2010 12:05:20 PM
From: axial  Read Replies (1) | Respond to of 46821
 
John, HFT goes beyond simply acting quickly on information. Among the different techniques is an active discovery process, which includes high-speed submission of offers whose only purpose is to establish buyer price limits.

Prior to HFT, it wasn't possible to obtain such information except as market depth. It defeats the process when technology discloses a buyer's private intentions.

The upstream video explains some of the other techniques, such as automatic market makers. Please note it was created before flash trading was banned; that portion of the explanation is no longer applicable. Here's the link again:

youtube.com

Jim