It stands for queue jumping; a practice by specific traders on an exchange who exploit sub-penny venues (SPVs) to post orders on a finer grid to bypass (jump the queue) , or gain priority over, resting orders in the public limit order book (PLB) queue at the best bid or offer. Orders at a given exchange can be “queue-jumped” by other orders posted on other exchanges displayed in advanced price levels in brokers’ routing tables.
The queue jumpers are said to be snatching business from other brokers as they leave the latter’s passive orders with a lower fill rate and force their execution algorithms to cross the bid-offer spread. Though such orders tend to be associated with lower transaction costs and adverse selection, the orders at the back of the queue take the hit- i.e., the increase in cost, reflected by effective spread.
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