Two Seconds
The weekend wall street magazine had an interesting article nearly high speed trading, Traders Pay for an Early Peek at Key Data. Through Thompson-Reuters, traders tin sack larn the University of Michigan consumer confidence survey results 2 seconds ahead of everyone else. They as well as then merchandise S&P500 ETFs on the information.
Naturally, the article was nearly whether this is fair as well as ethical, amongst a pretty potent sense of no (and for certain pressure level on the University of Michigan non to offering the service.)
It didn't inquire the obvious question: Traders need willing counterparties. Knowing that this is going on, who inwards their correct hear is leaving confine orders on the books inwards the 2 seconds earlier the confidence surveys come upward out?
OK, you lot say, mom as well as popular are besides unsophisticated to know what's going on. But fifty-fifty mom as well as popular house their orders through institutions which purpose trading algorithms to minimize cost impact. It takes i trace of piece of job of code to add together "do non larn out confine orders inwards house during the 2 seconds earlier the consumer confidence surveys come upward out."
In short, the article leaves this impression that investors are getting taken. But it's therefore slow to avoid beingness taken, therefore it seems a fleck of a puzzle that anyone can make money at this game.
I promise readers amongst to a greater extent than marketplace position sense than I tin sack answer the puzzle: Who is it out at that spot that is dumb plenty to larn out confine orders for S&P500 ETFs outstanding inwards the 2 seconds earlier the consumer confidence surveys come upward out?
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| Source: Wall Street Journal |
Naturally, the article was nearly whether this is fair as well as ethical, amongst a pretty potent sense of no (and for certain pressure level on the University of Michigan non to offering the service.)
It didn't inquire the obvious question: Traders need willing counterparties. Knowing that this is going on, who inwards their correct hear is leaving confine orders on the books inwards the 2 seconds earlier the confidence surveys come upward out?
OK, you lot say, mom as well as popular are besides unsophisticated to know what's going on. But fifty-fifty mom as well as popular house their orders through institutions which purpose trading algorithms to minimize cost impact. It takes i trace of piece of job of code to add together "do non larn out confine orders inwards house during the 2 seconds earlier the consumer confidence surveys come upward out."
In short, the article leaves this impression that investors are getting taken. But it's therefore slow to avoid beingness taken, therefore it seems a fleck of a puzzle that anyone can make money at this game.
I promise readers amongst to a greater extent than marketplace position sense than I tin sack answer the puzzle: Who is it out at that spot that is dumb plenty to larn out confine orders for S&P500 ETFs outstanding inwards the 2 seconds earlier the consumer confidence surveys come upward out?
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