7 miliseconds in the Stock Market.

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rabble
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7 miliseconds in the Stock Market.

Postby rabble » Fri Sep 27, 2013 1:19 pm

The Federal Reserve announced at 2PM that they had decided not to slow down its bond purchases. This sent the price of gold, stocks, and bonds way up. They announced it in Washington DC.

It takes 7 milliseconds for that info to travel from DC to Chicago. Speed of light and all that.

During that 7 milliseconds, somebody bought a great big pile of gold electronically.

Huh.

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Re: 7 miliseconds in the Stock Market.

Postby gozer » Fri Sep 27, 2013 2:31 pm

one has to wonder what is going to happen when the federal reserve & co runs out of bullets, so to speak. 12k points straight down on the dow jones industrial average? i wouldn't be surprised . . .

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Re: 7 miliseconds in the Stock Market.

Postby Comrade » Fri Sep 27, 2013 2:41 pm

You can't type an order in a matter of miliseconds. It is far more likely that one or more individuals had limit orders in place well ahaead of the announcement that got triggered the instant the market moved. They probably also had the opposite orders in place to hedge the bet and pulled those when it became clear which way market was moving.

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Re: 7 miliseconds in the Stock Market.

Postby Francis Di Domizio » Fri Sep 27, 2013 2:46 pm

Saw that yesterday. Somebody got some 'splaining to do.

I'm somewhat curious if absent insider knowledge this was that risky a bet. Yes the price of gold skyrocketed due to the announcement, but had the fed not popped that surprise announcement, would the price have fallen or held steady?

In other words, is there any reason not to have a order queued up to go off right before a major Fed announcement of this sort?

rabble
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Re: 7 miliseconds in the Stock Market.

Postby rabble » Fri Sep 27, 2013 2:52 pm

Comrade wrote:You can't type an order in a matter of miliseconds. It is far more likely that one or more individuals had limit orders in place well ahaead of the announcement that got triggered the instant the market moved. They probably also had the opposite orders in place to hedge the bet and pulled those when it became clear which way market was moving.

Figured that out all by yourself?
The market hadn't yet moved when the purchase was made, by the way.
Last edited by rabble on Fri Sep 27, 2013 2:58 pm, edited 1 time in total.

rabble
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Re: 7 miliseconds in the Stock Market.

Postby rabble » Fri Sep 27, 2013 2:57 pm

Francis Di Domizio wrote:Saw that yesterday. Somebody got some 'splaining to do.

I'm somewhat curious if absent insider knowledge this was that risky a bet. Yes the price of gold skyrocketed due to the announcement, but had the fed not popped that surprise announcement, would the price have fallen or held steady?

In other words, is there any reason not to have a order queued up to go off right before a major Fed announcement of this sort?

That sounds like a great defense in court but if that's what they were doing, wouldn't it be happening pretty regularly instead of two milliseconds before a critical announcement? If there was a pattern of this happening before every announcement it seems like someone would have noticed.

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Re: 7 miliseconds in the Stock Market.

Postby green union terrace chair » Fri Sep 27, 2013 2:58 pm

Comrade wrote:You can't type an order in a matter of miliseconds. It is far more likely that one or more individuals had limit orders in place well ahaead of the announcement that got triggered the instant the market moved. They probably also had the opposite orders in place to hedge the bet and pulled those when it became clear which way market was moving.

I thought this at first, too, but after reading the story, the trades were made before the news arrived. So presumably the market hadn't moved yet and no limit order would have been triggered. OR one person got the news early and their actions triggered a bunch of other automatic orders.

This shit always reminds me of the Great Orange Juice Scam in Trading Places.

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Re: 7 miliseconds in the Stock Market.

Postby Stebben84 » Fri Sep 27, 2013 3:00 pm

Deception and insider trading on Wallstreet. WHHHAAAT?! :roll:

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Re: 7 miliseconds in the Stock Market.

Postby Francis Di Domizio » Fri Sep 27, 2013 3:30 pm

rabble wrote:
Francis Di Domizio wrote:Saw that yesterday. Somebody got some 'splaining to do.

I'm somewhat curious if absent insider knowledge this was that risky a bet. Yes the price of gold skyrocketed due to the announcement, but had the fed not popped that surprise announcement, would the price have fallen or held steady?

In other words, is there any reason not to have a order queued up to go off right before a major Fed announcement of this sort?

That sounds like a great defense in court but if that's what they were doing, wouldn't it be happening pretty regularly instead of two milliseconds before a critical announcement? If there was a pattern of this happening before every announcement it seems like someone would have noticed.



No, it's a pretty shit defense in court for the reasons you list. I'm just wondering if it's actually a viable strategy (since it isn't happening all the time, my guess is no).

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Re: 7 miliseconds in the Stock Market.

Postby Mad Howler » Fri Sep 27, 2013 7:49 pm

Rabble,
I have been following stories such as this for a few months now.
I have no doubt the speed of light and electrons is a handicap that is becoming a real factor for some.
Let us not forget that the infuential pioneers who brought us high speed trading, high speed whatever, and game theory came from a place of solid statistics applied to quantized mathematics and physics.
I heard that the researchers involved with CERN are at a lull with regard to meaningful problems to solve.
Perhaps this might be an opportunity to create a quantum intangled means of communication?
This might level this...
MH

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Re: 7 miliseconds in the Stock Market.

Postby narcoleptish » Sat Sep 28, 2013 9:20 am

Blue Horseshoe loves Anacott Steel.

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Re: 7 miliseconds in the Stock Market.

Postby bdog » Sat Sep 28, 2013 9:32 am

Mad Howler wrote:Let us not forget that the infuential pioneers who brought us high speed trading, high speed whatever, and game theory came from a place of solid statistics applied to quantized mathematics and physics.

I did forget that.

Thank you for the reminder.

Mad Howler
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Re: 7 miliseconds in the Stock Market.

Postby Mad Howler » Sun Sep 29, 2013 10:02 pm

bdog wrote:
Mad Howler wrote:Let us not forget that the infuential pioneers who brought us high speed trading, high speed whatever, and game theory came from a place of solid statistics applied to quantized mathematics and physics.

I did forget that.

Thank you for the reminder.

http://www.youtube.com/watch?v=345uegSj ... ata_player

:lol:

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Re: 7 miliseconds in the Stock Market.

Postby Comrade » Mon Sep 30, 2013 10:20 am

rabble wrote:
Comrade wrote:You can't type an order in a matter of miliseconds. It is far more likely that one or more individuals had limit orders in place well ahaead of the announcement that got triggered the instant the market moved. They probably also had the opposite orders in place to hedge the bet and pulled those when it became clear which way market was moving.

Figured that out all by yourself?
The market hadn't yet moved when the purchase was made, by the way.


We are talking about MULTIPLE exchanges that do not syncronize their clocks. Moreover, you do not know the source of reporting for each of the different exchanges. Within a few miliseconds, it is not possible to know whether or not someone was front running or whether limit orders im place were being executed as a result of measured activity and movement.

Program trading is also a distinct possiblility that was not considered. That being said, it would not surprise me to discover that someone at Goldman Or Merrill was front running. IF true then I say throw the book at them. However, Goldman seems to be able to get away with anything so Im not holding my breath.

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Re: 7 miliseconds in the Stock Market.

Postby Mad Howler » Wed Oct 02, 2013 12:48 am

Just in case you believe that this is a made up issue-
http://gcn.com/blogs/pulse/2013/07/data ... a.aspx?m=2

Although, there might be some missing data this week (or so).
Plenty of time for power players to decide where they would really like to locate this function, once our pesky democracy is finally...


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