Nanex

Last updated
Nanex, LLC
Type Private
Industry Software engineering
Founded2000;21 years ago (2000)
FounderEric Scott Hunsader
HeadquartersWinnetka, Illinois, Chicago metropolitan area
Key people
 Eric Scott Hunsader (CEO)
Products Financial market data Stock Market
Services streaming data
Number of employees
8 [1]  (2013)
Website www.nanex.net

Nanex is a Chicago-based firm that offers streaming market data services, and real-time analysis and visualization tools. They offer data on all market transactions to their clients who are typically traders and other financial analysis firms. "The company can analyse millions of trades per second." [2]

Nanex is the creator and developer of NxCore, a ticker plant that delivers streaming whole market data from Telvent DTN and provides an application programming interface. The company was founded in 2000 and is located in Winnetka, Illinois. [3] [1] [4]

The founder and CEO of Nanex, Eric Scott Hunsader, is a vocal critic of some aspects of high-frequency trading and has clashed on Twitter with defenders of the system. [5] [6] Hunsader's firm is known for having coined the term quote stuffing. [7] Bloomberg called Nanex the "nemesis" of high-frequency traders. [1] [4]

Hunsader's views, as well as the record of market transactions released by Nanex, have been cited in many financial analyses done in news articles about strange financial events, such as the 2010 Flash Crash, [8] [7] the Gold Flash Crash in early January 2014, [9] [10] [11] [12] [13] and suspicious trading patterns. [14] [15] [16]

Related Research Articles

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Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions accounting for variables such as time, price, and volume. This type of trading attempts to leverage the speed and computational resources of computers relative to human traders. In the twenty-first century, algorithmic trading has been gaining traction with both retail and institutional traders. It is widely used by investment banks, pension funds, mutual funds, and hedge funds that may need to spread out the execution of a larger order or perform trades too fast for human traders to react to. A study in 2019 showed that around 92% of trading in the Forex market was performed by trading algorithms rather than humans.

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Scott Patterson is an American financial journalist and bestselling author. He is a staff reporter at The Wall Street Journal and author of Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the Global Financial System and The New York Times bestselling bookThe Quants.

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Quote stuffing Form of market manipulation

In finance, quote stuffing refers to a form of market manipulation employed by high-frequency traders (HFT) that involves quickly entering and withdrawing a large number of orders in an attempt to flood the market. This can create confusion in the market and trading opportunities for high-speed algorithmic traders. The term is relatively new to the financial market lexicon and was coined by Nanex in studies on HFT behavior during the 2010 Flash Crash.

A fat-finger error is a keyboard input error or mouse misclick in the financial markets such as the stock market or foreign exchange market whereby an order to buy or sell is placed of far greater size than intended, for the wrong stock or contract, at the wrong price, or with any number of other input errors.

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Spoofing is a disruptive algorithmic trading activity employed by traders to outpace other market participants and to manipulate markets. Spoofers feign interest in trading futures, stocks and other products in financial markets creating an illusion of the demand and supply of the traded asset. In an order driven market, spoofers post a relatively large number of limit orders on one side of the limit order book to make other market participants believe that there is pressure to sell or to buy the asset.

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Jump Trading LLC is a proprietary trading firm with a focus on algorithmic and high-frequency trading strategies. The firm has over 700 employees in New York, Chicago, Amsterdam, London, Shanghai, and Singapore and is active in futures, options, cryptocurrency, and equities markets worldwide.

References

  1. 1 2 3 Regan, Michael (November 26, 2013). "Speed Traders Meet Nightmare on Elm Street With Nanex". Bloomberg News . Retrieved January 26, 2014.
  2. ↑ Vaananen, Jay (2015). Dark Pools and High Frequency Trading For Dummies. John Wiley & Sons. p. 177. ISBN   9781118879191.
  3. ↑ "Welcome to Nanex.net". Nanex. Retrieved January 26, 2014.
  4. 1 2 Regan, Michael (November 27, 2013). "The Nemesis of High-Speed Traders". Bloomberg BusinessWeek. Retrieved January 26, 2014.
  5. ↑ Patel, Sital (January 29, 2014). "It's economics 101, says DirectEdge CEO on 'maker-taker' trading debate". MarketWatch . Retrieved February 5, 2014.
  6. ↑ Stuber, Joseph (January 10, 2014). "Why We Are Not OK And Not On A Sustainable Trajectory". Seeking Alpha . Retrieved February 5, 2014.
  7. 1 2 Lauricella, Tom (September 27, 2010). "Data Wonks Debut Dizzying Diagram of Flash Crash". MoneyBeat, blog of the Wall Street Journal . Retrieved February 5, 2014.
  8. ↑ Bowley, Graham (August 22, 2010). "Stock Swing Still Baffles, With an Ominous Tone". New York Times . Retrieved February 5, 2014.
  9. ↑ Melin, Mark (January 9, 2014). "Gold Flash Crash Caused By HFT Algorithm, Not Fat Finger". ValueWalk. Retrieved February 5, 2014.
  10. ↑ Baillieul, Robert (January 6, 2014). "Canadian Equities Lower on Weak Economic Data, Gold Flash Crash". Motley Fool . Retrieved February 5, 2014.
  11. ↑ "Why Gold Price Suppression Can NOT Continue". The Market Oracle. Retrieved February 5, 2014.
  12. ↑ Winter, Russ (January 13, 2014). "Open Letter To Gold Investors: Will The Real Manipulator Please Stand Up?". Seeking Alpha . Retrieved February 5, 2014.
  13. ↑ Shumsky, Tatyana (January 10, 2014). "Gold Ends Slightly Lower After Volatile Day Price Briefly Drops $30; CME Group Says No Errors Occurred". Wall Street Journal . Retrieved February 5, 2014.
  14. ↑ Lopez, Linette (October 8, 2012). "One Algorithm Made Up 4% Of All Trading Last Week, And No One Knows Where It Came From". Business Insider . Retrieved January 26, 2014.
  15. ↑ Melin, Mark (January 30, 2014). "Wild "Fat Finger" Price Swings In London Stocks Questioned". ValueWalk. Retrieved February 5, 2014.
  16. ↑ Steiner, Christopher (September 1, 2010). "Did We Dodge Another Flash Crash on Sept. 1?". Forbes . Retrieved February 5, 2014.
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