Educational Sunday ... let's talk ALGO
There is one ALGO that is processing the so-called NBBO. It is called SIP. It is divided into two ALGOS the CQS for NYSE and the UTP for Nasdaq. All exchanges are connected to SIP ... 🤯

The SIP is doing the "simple" job of updating with the highest and lowest offers for a market. This is happening simultaneously at all connected exchanges. This is the NBBO (national best bid and offer). Market makers are also connected to the system next to the exchanges.

"best bid and offer" is from a market maker or from a single exchange. The so-called alternative trading systems are not included in the SIP. ATS include "dark pools and ECN's"

So the SIP and with that the first ALGO only updates and matches bid and ask prices. I doesn't have any other logic implemented. It is part of the family which is called "Big Data Processing Algorithms"

At this level, nothing interesting is happening in regard to price action but it is the fundament to understand what is happening in the markets when we talk about how price is moving.
Stay tuned for the next: let's talk algo 🤯