<P> Rebate trading is an equity trading style that uses ECN rebates as a primary source of profit and revenue . Most ECNs charge commissions to customers who want to have their orders filled immediately at the best prices available, but the ECNs pay commissions to buyers or sellers who "add liquidity" by placing limit orders that create "market - making" in a security . Rebate traders seek to make money from these rebates and will usually maximize their returns by trading low priced, high volume stocks . This enables them to trade more shares and contribute more liquidity with a set amount of capital, while limiting the risk that they will not be able to exit a position in the stock . </P> <P> The basic strategy of news playing is to buy a stock which has just announced good news, or short sell on bad news . Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits (or losses). Determining whether news is "good" or "bad" must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself . This is because rumors or estimates of the event (like those issued by market and industry analysts) will already have been circulated before the official release, causing prices to move in anticipation . The price movement caused by the official news will therefore be determined by how good the news is relative to the market's expectations, not how good it is in absolute terms . </P> <P> Keeping things simple can also be an effective methodology when it comes to trading . There are groups of traders known as price action traders who are a form of technical traders that rely on technical analysis but do not rely on conventional indicators to point them in the direction of a trade or not . These traders rely on a combination of price movement, chart patterns, volume, and other raw market data to gauge whether or not they should take a trade . This is seen as a "simplistic" and "minimalist" approach to trading but is not by any means easier than any other trading methodology . It requires a solid background in understanding how markets work and the core principles within a market, but the good thing about this type of methodology is it will work in virtually any market that exists (stocks, foreign exchange, futures, gold, oil, etc .). </P> <P> An estimated one third of stock trades in 2005 in United States were generated by automatic algorithms, or high - frequency trading . The increased use of algorithms and quantitative techniques has led to more competition and smaller profits . </P>

Which of the following describes a transaction that occurred in the fourth market