In recent months, stock exchanges have come into the public spotlight for their business practices. The introduction of flash orders that give preferential treatment to a certain group of customers has undermined public confidence in stock exchanges as institutions that vouch for fair market prices. The introduction of flash orders happened in the wake of a development that has received little publicity. There is a growing scientific literature in finance that explains how market prices depend on the details of the order flow and how traders can influence market prices. An increasing number of market participants take advantage of these discoveries for their own and their investors’ advantage…
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Author: Richard B. Olsen, Founder and CEO of Olsen Ltd