Order flow
What are High-Frequency Trading (HFT) algorithms doing when they quickly manipulate bids and asks on the DOM?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
High-frequency trading firms post and cancel orders within microseconds to probe liquidity, manage inventory, and capture bid-ask spreads using colocated algorithmic infrastructure.
How it works
Legitimate HFT provides liquidity and tightens spreads, but regulators distinguish this from illegal manipulative tactics like layering, which CME and CFTC actively monitor and penalize.
An example
An algo cancels thousands of quotes per second.
Risk & limitations
Not all rapid quoting is manipulative; legality depends on intent.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.