SOES bandit

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SOES Bandit

A trader who uses the Small Order Execution System (SOES) on NASDAQ to manipulate prices. The SOES bandit conducts a small transaction on a security in order to affect the price, and then executes a larger transaction to take advantage of the price inefficiency. This is a form of insider trading, as the broker executing the order knows something about the market's probable movement that other market participants do not know. An SOES bandit is also simply called a bandit.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

SOES bandit

A trader who exploits Nasdaq's Small Order Execution System by taking advantage of market inefficiencies. The bandit typically first enters a relatively small order to manipulate a security's price and then quickly enters a second, larger order to take advantage of the new price.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
And a decade ago, people working the Small Order Execution System, aka SOES bandits, minted money by arbitraging spreads created by lags in the speed at which disparate NASDAQ market makers updated their prices; but the dot-com bust in 2002 eventually laid them low.
The first alternative ECN to emerge was Island, the creation of a group of so-called "SOES bandits" who had used the Nasdaq's Small Order Execution System (SOES) to profit from the mistakes of market-makers.
Imperfect monitoring thus creates profit opportunities for speculators (comparable to SOES bandits), who also monitor the arrival of news in order to pick off "stale" quotes.
Dubbed SOES bandits, these pioneering day traders were adept at using Nasdaq's Small Order Execution System (SOES) to seize arbitrage profits from the market makers.
When they first used the electronic Small Order Execution System (SOES) to exploit pricing inefficiencies in the Nasdaq market, irate Wall Street firms dubbed the upstarts "SOES bandits" and tried to stamp them out.