I don't know if the SEC has set their sights on HFT firms or not, I just decided to do some digging myself. HFT firms in essence are the new market makers, trying to incover Icebergs or large orders that a fund may be trying to accumulate or distribute and then jumping in front of the market makers.
They may ping an order to sell AAPL at 300 shares, and another and another until they uncover a pattern, a big order being distributed.
So I created a very fast 3C, probably not fast enough, but decided to take a look. I don't know how long it takes HFT's to uncover an iceberg, but here are two recent HFT flash crashe and it appears this quick 3C may have picked up on them. How this information will be useful is another matter, I'll have to watch the behavior afterwards.
Here's AAPL and LQD
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