I keep hearing the below in these forums
- "There are brokers who are plugged into the ASX's servers and know precisely when the market will close...so they are able to manipulate the close on any stock they want."
Where is this information coming from? It seems very unlikely that the closing auction is leaking the randomly set close time of the auction. It completely defeats the purpose of the randomly timed close.
Additionally the brokers are not directly plugged into the ASX servers. Some undoubtedly will be co-located which means they could get the information that the auction is closed xx milliseconds faster that the rest of us in retail - but that is still useless information to them for making any changes to the close auction bids and offers. Presumably, it would give them some possibly strategy to make first adjustments for the opening auction - but even that is of little real value due to the way the price goes off at one price in the opening auction (as it does in the close auction).
If the ASX had at sometime leaked the random close time before the close it would have been a priority 1 incident and dealt with quickly in a release fix.
If I am wrong on the above, I would like some better source than just hearing it over HotCopper. I assume we are just spreading misinformation on this.
The only area where I see possible benefits for the professionals in regards to the close is where they can most likely route to dark pools and chi-x outside of the set ASX times. I also assume a lot of our brokers are also using chi-x with smart routing so even that benefit is limited.
(holder of STX)
