Front Running

I keep on hearing rumors that Dimension trading group is or was front-running traders. Anyone know anything about that?

 

Very shady group, those guys.

Woudn't trade with them, using your money.

Always bilking traders out of profits - all of their sub-llcs...........

 

their sub llc's bilking traders?

how do they do that?

i've been trading with a sub llc of one of their competitors for about a year - and was actually thinking of switching to them.

thanks

 

If you're actually worried about front running then throw out a bid and see if another bid is placed ahead of you. Or take liquidity and see if liquidity is taken before you in the T&S. It's simple really. If you're slow in the head then do it on an illiquid stock.

 

if a stock is trading at 50.75 by 50.77 and you enter a bid at 50.75 there will naturally be many bids ahead of you or am I missing something?

I am more of a longer term trader (rarely scalp)
so I may not be aware of what you are saying.

But I would definitely like to learn more.

As reading some of the posts here it seems that my account in a sub llc may not be as safe as I thought.

 

If its 50.75 x 1000 and you bid 100, if someone is front running you then you would see 50.75 x 1200 instantly. Yes, there are bots that will add extra liquidity too but if you notice this happens every time then you'll have something to worry about. To really be sure go to an illiquid stock that hardly moves. But I find that bots will generally follow you on the bid, especially if you penny them. I think people probably mistake those bots for their firm front running them.

As for taking liquidity you would look for an offer of 50.77 x 1000 and you take 100 shares and it ends up being 50.77 x 800 with two 100 prints in the T&S.

But does it really make sense for a firm to front run your bids? What if they get filled and you don't? They wouldn't know were to exit. What if they lift an offer and take all the shares there forcing you to bid where the offer is. Maybe you don't get filled. Now the firm has a long and doesn't know where to exit.

Anyways, thats my opinion on the matter. Maybe someone has some first hand experience in front running. Front running would make more sense if theyre doing it to guys holding positions for a longer period. But if they did to to someone who trades a decent amount of shares then it would be very detectable, especially on thin-medium stocks. I doubt they would be trying to front run someone doing only few hundred shares.

 

In trying to ascertain whether this is happening to me I made a recording of me buying DIS and selling it a couple of times. I am still not sure though.

Would you be able to view the AVI file I made (its only 5 min long) and see if you can tell.
It also includes the Orders and Positions tab so you see how the order gets filled.

thanks