4% of Market Trading Caused by Algo

Amazing! A single computer program that placed orders, and then canceled them, made up 4% of all quote traffic in the U.S. stock market last week.

The algorithm never executed a single trade, but placed orders in 25-millisecond bursts involving about 500 stocks, before stopping at 10:30am on Friday.  The ultimate goal of such programs is to clog the system so it slows down the quote feed to others and allows the computer traders to gain a moneymaking arbitrage opportunity.  Regulators are trying to see if they can try to control the practice, which accounts for 70% of trading each day, without slowing down progress and profits for Wall Street and the U.S. exchanges.

Souce: CNBC