SOES Bandits Revisited

23

July, 2010

Today we are going to do a little electronic trading history lesson.  Who remembers Sheldon Maschler?  Harvey Houtkin?  They were the original SOES Bandits.  Sheldon headed up the infamous Datek Securities.  In 1989, with the help of two boy wonders, Jeff Citron and Josh Levine, they created Watcher, a software program that allowed day traders to take advantage of a weakness in the SOES system–relatively slow updating of price quotes (sound familiar to anyone?).  SOES was intended for small orders but Datek was using the system for large trades, buying stocks and then selling them again within seconds.  Datek was

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