When it comes to flash orders, Direct Edge is not going quietly into the dark night. It has broken ranks with Nasdaq OMX and BATS, which have both promised to stop offering flash trades, which they both started in June. Some expected Direct Edge to bow to the regulatory fervor and powerful critics, like the NYSE Euronext, and also nix its service. 

Instead, Direct Edge seems to be digging in. "We pioneered this product and it gives our clients an opportunity to see liquidity that is off the grid or in dark pools," Bill O'Brien, CEO of Direct Edge told the Financial Times. "We started this three years ago and no one complained. This is a product we believe in and one that our clients are choosing to use." It will continue its service. 

Direct Edge no doubt feels an obligation to its owners, which include Goldman Sachs and Knight Capital, to offer the best possible executions. It also doesn't want to turn its back on what has become a huge profit generator. We'll have to see how the battle plays out, now that the SEC has taken up the issue. One huge issue is whether retail investors benefit from this liquidity. 

The brou-ha-ha over flash trading is just one aspect of the larger movement toward high-frequency and its many implications. So this is a good time to mention again that we're sponsoring a free editorial webinar on hi-fi trading, which will offer a good chance to learn much more about the state of affairs. 

We'll feature two leading lights in the field: Kevin McPartland, of the Tabb Group, whose reports on this and related topics are really must-reads, and George Hessler, executive vice president of Lime Brokerage, a pioneering firm in this field. He'll address some of the regulatory implications. The free event will be held at 2 PM on Sept. 10. - Jim