Why Do High-Frequency Traders Cancel So Many Orders?
Disclaimer: I work in HFTThe article uses the term "front-running" incorrectly. Front-running is where a firm places their own trades ahead of trades they're placing for a client, to capitalize on the price movement that client order might generate. This is illegal.What the market makers in the article are doing isn't front-running. It's just being smart with their orders.And that's generally why HFTs cancel orders- they're reacting to market conditions that exist on the span of microseconds and will want to change their market positions very quickly- including canceling orders that they no longer think are suitable.