Is there a text explanation of this? I'm curious to learn what the allegation is, but I don't have 50 minutes to spend on what is likely a silly conspiracy theory.
The small amount of text present suggests someone is being allowed to jump the queue. Is that the allegation, or does it go beyond that?
It's an allegation. He's basically referring to Direct Edge's Hide-not-slide order type.
The only equities exchange I know of that lets you jump the queue is NYSE where DMMs and floor brokers can join a level and participate along with the front of the electronic book. DMMs have negative obligations though.
I can't speak to the specifics in this video, but if you want a detailed, text-based explanantion of HFT shenanigans, there's tons of technical details at http://www.nanex.net/flashcrash/ongoingresearch.html (algos crashing exchanges, running wild and losing insane amounts of money only to have those losses rolled back [sometimes], algos reacting to news a few seconds before it's officially released, etc).
I've seen Nanex's pretty graphs, but I've never seen an explanation from them. All they do is highlight graphs with wild oscillations and then declare "ooh, evil!"
Because they get the benefit when they fat finger as well. HFT firms tend to actually have more risk than big investment firms. You'll notice that when Knight Capital had a program run wild they went out of business (for all practical purposes). When Goldman did they had their trades busted.
The small amount of text present suggests someone is being allowed to jump the queue. Is that the allegation, or does it go beyond that?