The Securities and Exchange Commission, better known as the SEC, is considering a ban against so-called “flash orders.” Apparently, buy and sell information can occur in the tiny little milliseconds leading up to when information is made public. During these milliseconds, uber-computers used by certain trading platforms like Direct Edge, Nasdaq OMX and BATS can use the buy and sell information to make better trading decisions.
How does this affect you? Well, it may or may not affect you that much really. If you’re playing the markets for the long term, then it probably doesn’t matter too much. But if you’re playing for short-term gains, like options plays, then milliseconds can make a huge difference.
But isn’t it nice to know how people are trying to scam other people? And that sometimes our publicly funded regulatory bodies do, in fact, pay attention?