ASX response to my report bot trading on 26th Feb. (See my...

ASX response to my report bot trading on 26th Feb. (See my 'complaint' earlier in this thread).

Dear Douglas,

Thank you for your email.

Having reviewed the course of sales data for CNP for 26 February it appears the trades you are referring to, are the result of DMA (Direct Market Access) or algorithmic trading.

You may be aware that DMA trading allows a client to send orders directly onto a trading platform without human intervention. One form of DMA trading involves a strategy to match the volume weighted average price (VWAP) for a stock over a day. As a means of capturing the VWAP, a single order might be split up into several smaller orders which are submitted periodically (every 3 minutes for example).


This type of DMA trading is normally unremarkable and has no impact on the price or volume of a stock. However, occasionally market observers may see small volume orders being submitted to a trading platform in a less liquid stock which result in small volume trades.

Surveillance monitors DMA trading and expects brokers to have in place appropriate mechanisms to ensure that such trading is not manipulative. DMA trading is an increasingly popular means of trading, particularly when a participant seeks to track VWAP or ‘slice and dice’ an order for other purposes. Further details and articles regarding DMA trading can be found be searching under "DMA Trading" on the ASX website. Please refer to the link below.

http://bureau.panopticsearch.com/search/search.cgi?query=DMA+Trading&collection=asx&form=simple&num_ranks=10

Please be advised that ASX surveillance has been notified of your concerns and will continue to monitor the trading in CNP.

I hope this is of some assistance to you and I appreciate you raising your concerns with ASX.

-End-