What Technical Solutions Do Centralized Crypto Exchanges (CEXs) Use to Mitigate High-Frequency Front-Running?
CEXs employ several technical measures. They use latency-reducing infrastructure, often placing all matching engines in the same physical location.
They also implement sophisticated order book monitoring and anti-spoofing algorithms. Furthermore, some use 'randomized batching' or 'speed bumps' to slow down high-frequency traders and prevent them from consistently gaining a time advantage.
Glossar
Order Book Monitoring
Depth ⎊ Order book monitoring, within cryptocurrency and derivatives markets, assesses cumulative bid and ask sizes at discrete price levels, revealing potential support and resistance.
Centralized Crypto Exchanges
Custody ⎊ Centralized Crypto Exchanges function as custodians of digital assets, offering a regulated framework for storage and transfer, a critical component for institutional participation in cryptocurrency markets.
Technical Solutions
Calibration ⎊ Technical solutions within cryptocurrency, options, and derivatives frequently necessitate precise calibration of models to reflect observed market dynamics.
Technical
Analysis ⎊ Within cryptocurrency derivatives and options trading, technical analysis transcends mere chart pattern recognition; it represents a structured, data-driven approach to forecasting price movements predicated on historical market data and volume.