Have you ever heard of Direct Edge? It's the third largest. High frequency trading is changing the equities market -- if you buy the concept that offering a price for 10 milliseconds is a
offer of anthying at all. This stuff should probably be illegal.
4 more pages at the link. As you might expect, high frequency trading firms often co-locate at the same data centre as the exchanges themselves.
Completely automated exchanges with no trading floor captured and used to lay off options or derivatives is hardly news -- the Cincinnati Stock Exchange lost its trading floor in the 80s and ended up a computer closet in the same building that housed the Chicago Board Options Exchage (CBOE) and indeed the Midwest Stock Exchange (now Chicago Stock, CHX).
What exactly is being automated?
How fast does fast have to be?
And oh, yes, the 'Flash Crash'
More details on the 'flash crash' at the link.
What does the future hold?
So, they are still happening -- they just get dealt with on a case by case basis, so that this time there is no investigation into the hanky-panky that caused them.
Best straight faced quote in the article:
Collocation amounts to a 'preferred' trading post location, with a milliseconds edge for high frequency trading--data centre cronyism:
So the big news is that the NYSE has dropped from 70% market share to 36% market share in 5 years, and the slack has been taken up by these electronic trading platforms and 'unlit exchanges' including 'dark pools' (and probably not by the public exchanges, though that is not said). All the interesting facts are tucked away at the very end of the article.