An order (buy or sell order) that flashes (shows) information from an exchange about incoming flow a fraction of a second (milliseconds) before the flash information is communicated to the trading system. The order will be revealed only to concerned market participants, for a fraction of a second , so that they can decide whether or not to provide a cross. Fee-paying market participants, through automated trading systems, i.e., algorithmic traders, will respond with their own orders to execute against the flash order at a price that matches the best quote across exchanges in a country.
Flash trades have been terminated by many exchanges, mainly due to the fact that the structure creates a two-tier market that can favor certain investors and disfavor others, leading to a compromised market fairness.
