Nanex Research

Nanex ~ 27-Nov-2013 ~ ISO Trades

In an April 21, 2010 comment letter to the SEC, the High Frequency Trading firm Tradeworx exposed unfair practices related to order anticipation and ISO's (Intermarket Sweep Orders). Pages 17 and 18 are shown below and pretty much, speak for themselves.

Fast forward 3.5 years later, the percentage of trades from ISO orders remain at a steady 40% of all trades in NMS stocks.

On September 26, 2013, there was a disturbance in the percentage of ISO trades. This is the same day that BATS-Y was offline for most of the day. You can see the impact it had on ISO trades in the chart below.

Nanex Research