Small Order Execution System (SOES)

The small order execution system (SOES) is a computer network that automatically executed trades in Nasdaq market securities and some Nasdaq small cap securities. Nasdaq implemented this mandatory system as a result of the lack of liquidity after the 1987 stock market crash. SOES enabled individual investors to execute trades in fast-moving markets and gave them the same access to orders and execution as larger traders. >>> Read the full article @ Investopedia

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SOES Bandits

SOES bandits are a group of individual investors who exploited the Nasdaq’s Small Order Execution System (SOES) for day trading. While the bandit’s average profit per trade is small, they make up for it by trading dozens or hundreds of times per week. >>> Read the full article @ Investopedia

Man Vs. Machine: How the Crash of ’87 Gave Birth To High-Frequency Trading

In response to 1987’s Black Monday, Nasdaq tweaked an existing system that would automatically give retail investors preference in the trading queue. It made it mandatory for market makers to instantly execute trades of 1,000 shares or less by retail investors in its Small Order Execution System, or SOES. >>> Read the full article @ CNBC

Datek Online Holdings Corp. History

In 1989 Levine and Citron began to investigate faster, cheaper means of buying and selling stocks. Working in the basement of Maschler’s Staten Island home, where Datek moved its four-man trading operation in 1990, Levine and Citron created Watcher, a software program that allowed day traders to monitor more than one computer screen at a time and exploit the Small Order Execution System (SOES). >>> Read the full article @ Funding Universe

The trading profits of SOES Bandits

SOES Bandits are individual investors who use Nasdaq’s Small Order Execution System (SOES) for day trading. Their average profit per trade is small, but they trade dozens or hundreds of times per week. Bandits usually establish a position before most market-makers have updated their quotes, and lay off the position at favorable prices through Instinet or SelectNet. >>> Read the full article @ Journal of Financial Economics