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Behold fake high-frequency trading quotes

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What does a high-frequency algorithm look like? It's not pretty, according to Nanex, the Chicago-based market research firm.

When a high-frequency algo is unleashed, it bombards a venue with quotes and it cancels them in sub-seconds afterwards. It's like a bratty nine-year old holding out an ice cream cone and saying, "Want a lick? Want some? Do ya? Do ya?"

Check out the Nanex chart here for some color commentary from Business Insider. They succinctly report:

"What's happening is a snapshot of 1/3 of a second of one stock's life while it's being bombed by a high frequency algorithm. One thousand quotes are firing off at this stock, the SPDR BofA ML Crossover Corp Bond ETF, every tenth of a second and then canceling, so no trades are actually being executed."

Those are fake quotes.

As one broker told me two years ago , if a human trader behaved like a trading algorithm, there would be fistfights on the trading floor.

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