News Algo Picks off Limits for Quick Cash
Harris Corp reported preliminary earnings tonight. They cut their 2013 outlook and announced job cuts, which is obviously not good for the stock. HFT news algorithms specialize in trading off these headlines and picking off limit orders that are out to lunch.
Check out the tape:
The news was reported at 16:20:00. Notice the time it took the HFT news algorithm to respond to the news – instantaneously.
It is a very dangerous game to make markets after hours in this HFT world, and the traders that bought this stock between $45 and $46 just learned the hard way, as the stock is now trading at $43.50.
They were sitting ducks.
This entry was posted by Dennis Dick on April 11, 2013 at 4:49 pm, and is filed under High Frequency Trading, Trading Education. Follow any responses to this post through RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.