Level II "flashing"?

Discussion in 'Order Execution' started by VinnyB, Dec 15, 2009.

  1. VinnyB


    Not sure what it's called so I couldn't bring up anything in a search.

    Happens with mainly low volume stocks. Bid and/or ask just starts appearing/disappearing. PACX etc. will be there then not be there, etc. After a few minutes of this, an order will fill and it will stop.

    Is this being done just to get an order filled? Annoying anyone watching? Or is something else going on?

    Also, what software is needed to place/cancel that quick? I know I can't do that with TD and Quotetracker. Is this prop firm software or Level III, etc?

  2. VinnyB


    Just bumping this thread 'cause I'm really interested in the answer.

    I know that I'm not the only one that has seen this occur. I'm just hoping that someone on this site that ACTUALLY trades will see this and answer ;-)

  3. spinn


    I am sure its high frequency traing, no way you be fast enough to adjust to that.
  4. VinnyB


    Thanks Spinn.
  5. bespoke


    some days when im really bored i do that by hand. i use morse code but nobody has ever responded back....
  6. rwk


    I see that a lot. Sometimes the inside bid and ask change together with no fills going through.

    A few years ago I heard of a fellow who was feeling bored/frustrated one day and decided to flash some serious size. Somebody filled him, and unwinding the trade put him out of business.
  7. gaj


    it's not HFT.

    i've found it's several things (using example for the long side):
    1) error
    2) someone who really wants to buy shares. the bid will move up slowly at first, then people will start lifting the offer.
    3) someone who wants to SELL shares. they'll put it out there, see if other bidders jump in, and sell lots of hidden size.

    those are the most common times i've seen it. you can't just tell from the size appearing, but what happens after itappears.
  8. It's a way people test the market.
  9. Mnphats


    LOL!! :D
  10. VinnyB


    Great discussion.

    Thanks all.

    Testing the market is what I'm thinking also. How the heck is the placing/cancelling going on that quick? What kind of platform?

    We're talking on/off/on/off like a light switch quick. Just one side at a time.

    Bid on/off about half dozen [or more] times and then a fill - usually 100 shares.

    See this on many stocks under 500,000 per day.

    #10     Dec 16, 2009