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News-Feed Trade: Legal Insider Trading At Wall Street

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http://online.wsj.com/article/SB10001424127887324682204578515963191421602.html

Traders Pay for an Early Peek at Key Data

On the morning of March 15, stocks stumbled on news that a key reading of consumer confidence was unexpectedly low.

Unknown to many investors, some traders commonly buy early access to market-moving data from nongovernment sources, Michael Rothfeld joins the News Hub. Photo: Getty Images

One group of investors already knew that. They got the University of Michigan's consumer report two seconds before everyone else.

New York offices of Thomson Reuters, distributor of some key indexes.

Infinium Capital Management, a high-speed trading firm in Chicago, used the information to launch a wave of trading in futures contracts, in just one example of the activity that followed. In a single second, according to a Wall Street Journal analysis, traders from various firms bet nearly seven million shares that equity markets would decline—which was exactly what happened when news of the survey became widely known.

Economic reports from public universities, trade groups and other nongovernmental organizations can move markets as surely as official data from the U.S. government. But unlike government reports, where pains are taken to make certain no one gets them ahead of time, few rules control release of nongovernmental economic reports. Unknown to many investors, selling early access is routine.

This is a "blind spot" in U.S. law, said Richard Painter, a former Republican White House ethics lawyer. Groups, he said, should "not be allowed to selectively disclose market-moving data to people who pay more money—that is not right."

But it is legal, and so is trading on the advance peeks. Even as securities rules bar companies from selective data disclosure, and as authorities vigorously pursue insider trading in all its forms, no law prevents investors from trading on nonpublic information they have legally purchased from other private entities. Trading would be illegal only if the information was passed through a breach of trust, said securities

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How do they manage to process and act on the data in under 2 seconds?

Is the data presented in such a way that it gets directly imported into a super computer which analyses and then instantly makes a decision?

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How do they manage to process and act on the data in under 2 seconds?

Is the data presented in such a way that it gets directly imported into a super computer which analyses and then instantly makes a decision?

We will probably know when the bubble has burst, hopefully soon.

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How do they manage to process and act on the data in under 2 seconds?

Is the data presented in such a way that it gets directly imported into a super computer which analyses and then instantly makes a decision?

That is exactly what they do, with real time data feeds hooked up to the trading platform on a fast server for low latency.

http://www.alphaflash.com/product-info/alphaflash-trader

Edited by Secure Tenant

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How do they manage to process and act on the data in under 2 seconds?

Is the data presented in such a way that it gets directly imported into a super computer which analyses and then instantly makes a decision?

Supercomputer?

Don't you have an app for your smartphone to trade ahead of the market?

(There are niches in the markets where you can get in ahead of price changes merely by subscribing to regular and free information services, and get days to react. Even mainstream shares in 'special situations', like FirstGroup now, can offer interesting opportunities).

[edit to add] For an example, look at http://www.google.co.uk/finance?q=LON%3AVEN2

Final results published before start of trading on May 28th. All of us who bought on May 28th (including me) got in ahead of the rise: a small profit even if I were to sell today. Now just waiting for the dividend in July, and hoping for an EBB to get me a tax break (about 27% of the purchase price) towards the end of the tax year. That's in addition to any regular rises that might or might not happen.

[edit again] Wasn't me alas, but I met someone in January who took advantage of a much bigger such event and made himself a 30-40% profit on three investments held over a few weeks. I made a useful 30% myself, but only because I already held the investment that gave him the smallest of his gains.

Edited by porca misèria

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Final results published before start of trading on May 28th. All of us who bought on May 28th (including me) got in ahead of the rise: a small profit even if I were to sell today. Now just waiting for the dividend in July, and hoping for an EBB to get me a tax break (about 27% of the purchase price) towards the end of the tax year.

EBB? Google does not seem to have heard of it (or rather, it has heard of too many similar or identical things that don't make sense in this context). Can you please tell us what it is?

So you feel that you can do fundamental analysis better than the market? It's possible you can, since someone must be able to do that. But if the strategy is to just look at a number and go "this looks better than what someone told me was expected", I suspect that might not be a reliable way of making money. After all, it's not like companies don't customarily release results when the market is closed. Your strategy really boils down to buying before everyone else with the same publicly available information. So you will be lots more likely to succeed when everyone notices something that you missed ....

Are you sure this kind of trading makes you money in the long term?

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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