Flash Trading

AAA

DEFINITION of 'Flash Trading'

A controversial computerized trading practice offered by some stock exchanges. Flash trading uses highly sophisticated high-speed computer technology to allow traders to view orders from other market participants fractions of a second before others in the marketplace. This gives flash traders the advantage of being able to gauge supply and demand and recognize movements in market sentiment before other traders.

Flash orders are also known as "step-up orders" or "pre-routing orders".

INVESTOPEDIA EXPLAINS 'Flash Trading'

Flash orders have been subject to scrutiny because of the advantage they give traders who are able to participate in the orders. Flash trading has been compared to front running, and opponents believe that the practice is harmful to market transparency. Proponents of flash trading state that it is necessary to provide liquidity for exchanges.

RELATED TERMS
  1. Manual Trading

    A trading system that involves human decision-making for entering ...
  2. Quote Stuffing

    A tactic of quickly entering and withdrawing large orders in ...
  3. Ultrafast Trading

    A lucrative and highly competitive method of stock trading that ...
  4. High-Frequency Trading - HFT

    A program trading platform that uses powerful computers to transact ...
  5. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable ...
  6. Front Running

    The unethical practice of a broker trading an equity based on ...
Related Articles
  1. Understanding Order Execution
    Investing Basics

    Understanding Order Execution

  2. 4 Dishonest Broker Tactics And How To ...
    Personal Finance

    4 Dishonest Broker Tactics And How To ...

  3. Direct Access Trading Systems
    Options & Futures

    Direct Access Trading Systems

  4. Price Shading In The Forex Markets
    Forex Education

    Price Shading In The Forex Markets

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center