If you are doing high frequency trading, processing a quote isn't that hard either. It can't be, or you'd never respond fast enough. I suppose the best way to do it would be to ignore quotes X distance from the book, and then do your DOS X+0.01 from the book, though this might not be compatible with your regular strategy. Whatever DOS you want to do has to be compatible with your already existing strategy. I'm not saying it's 100% impossible, only that it isn't easy.
Additionally, your broker starts getting annoyed at you when your fill rate drops below 0.5% or so. If you DOSed the market, you wouldn't even be in that ballpark.
FWIW, looking at those graphs, it does appear that a lot of the extraneous action was happening right on the edge of the inside bid/ask.
Additionally, your broker starts getting annoyed at you when your fill rate drops below 0.5% or so. If you DOSed the market, you wouldn't even be in that ballpark.
That's definitely true, and I'm sure it would be a serious problem with doing anything of this nature.
Is there always a middleman that cares about what quotes you're pushing through, though, or do some people have closer connections that wouldn't be watched very closely?
Some larger funds become a broker/dealer, so they can cut their brokers out of the loop. I really doubt that anyone big enough to do that would be willing to risk their business on a DOS attack, however.
I fully agree that it's possible to do. I just find other explanations, like badly written algorithms, much more plausible.
Additionally, your broker starts getting annoyed at you when your fill rate drops below 0.5% or so. If you DOSed the market, you wouldn't even be in that ballpark.