HFT Stock Manipulation Caught On Tape

Tyler Durden's picture

It doesn't get any more blatant than this. Once again, courtesy of Nanex we present to our incompetent regulators prima facie evidence of what is outright tape painting via what is an apparent HFT algo trying either to front run an order, to test for the presence of other predatory algos, and in general to take advantage of Reg NMS only protecting displayed liquidity over non-displayed (a topic we discussed two years ago). In the example below, which shows unique trades in the stock of XEL.PR.G, in the span of 30 seconds, 430 shares are bought up on the way up from $90.5 to $102.25, and then sold off once again in another 10 seconds, hitting all bids as soon as they appeared. Now this is not some HFT-darling which trades millions of shares per day (and sees blasts of tens of millions of quote stuffing packets in hours) and thus will likely be ignored by the general population... until it does hit some stock that people do care about. Naturally the implication is that, as Nanex points out, if all stocks traded/quoted at this frequency, even the the SEC could figure this out in a few weeks, after assembling a multi-discipilanary team of course. Is it any wonder that virtually nobody trades on open exchanges anymore (yes, most trading, or what's left of it has shifted to Sigma X and other dark pools) where the only survival tactic for such legacy monsters as the NYSE and Nasdaq is to laterally buy up as many of their peers as they can now that organic growth no longer exists: gotta love a world in which there are 83 different ATS venues, all of which permit some permutation of millions of stock manipulation strategies.

Trade and NYSE Quote Price for XEL.PR.G

Trade and quote prices across all exchanges:

Trade summary/balance sheet:

And a complete list of the labyrinth of over 80 Alternative Trading Systems currently in operations:

ATS List