Pinging

Definition

A pinging order is an immediate-or-cancel order, often small, sent to a price where liquidity may exist without being displayed. If size is there, the order executes immediately; if not, it is canceled at once and leaves nothing in the book. The SEC's 2010 concept release defines it this way in a footnote, noting that the venue receiving the IOC executes it if it has liquidity at or better than the limit price and otherwise responds with a cancellation. The release stresses the distinction between pinging as part of a normal search for liquidity and pinging used to detect large trading interest and trade in front of it.

Where it applies

In US equities, pinging targets dark pools and undisplayed order types. In futures markets without fully hidden orders, the undisplayed liquidity that can be probed is mainly the reserve of iceberg orders: a small aggressive order at a price whose displayed slice keeps coming back tells the sender that more size is waiting there.

How it looks on the tape

• Small aggressive prints, often one or a few contracts, repeated at the same price.
• No change in price, and the displayed size at the level restored after each print.
• Trade count rising faster than volume: many trades, little size.
• Nothing visible from the IOC orders that did not execute, since they never entered the book.

A worked example

Every few seconds, a 1-lot buy prints at 5,000.25. After each one, the offer at 5,000.25 shows 20 contracts again. Over five minutes, 60 single-contract trades print there and price does not move. The pattern is consistent with someone probing a refilling offer, and equally with several small traders buying, or with an algorithm working a buy order in tiny clips. The tape shows the prints, not the purpose.

In Senzoukria

The full order ticket offers IOC as a time in force, which is the mechanism pinging uses. For reading others' probes, the trades tape on the Trading page merges consecutive trades at the same price and side only when they arrive within 500 milliseconds, so single prints spaced a few seconds apart appear as separate lines, and merged lines show how many trades they contain. The Trade Count, Trades Delta and Delta per Trade indicators show when a bar is made of many small aggressive trades, and the heatmap's Iceberg rings mark levels that keep refilling.