FLASH TRADING AND THE DOMESDAY BOOK: FORESTALLING. There are historical roots to the objection to flash trading that some traders are given an opportunity to purchase before everybody else in the market. This wikipedia article quotes Blackstone’s definition of “forestalling”, which includes “the buying or contracting for any merchandise or victual coming in the way of the market….” Forestalling was a marketing offense in English common law. The wikipedia article says: “Typically, forestalling referred to the practice of intercepting sellers on their way to a market, buying up their stock, then taking it to the market and marking it up, which appears to be a type of arbitrage.” Although later resale in the market seems to be an element in the offense, the purpose of the law seems to be to channel sales into and through the market and to provide equal opportunity to everybody in the market. The condemnation goes way back. The wikipedia article says that: “The Domesday Book [from the year 1086] recorded that “foresteel” (i.e. forestalling, the practice of buying up goods before they reach market and then inflating the prices) was one of three forfeitures that King Edward the Confessor could carry out through England.” I find it charming that providing equal opportunity in an organized market was valued over 900 years ago. I also find it charming that markets have reached the point that today an advantage of a fraction of a second for a few traders over the rest of the market is an enormous advantage.

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