Thus equipped, high frequency firms can basically get a tip on where the market is headed before it even starts moving. As the attorney general's statement puts it, "if a firm can detect a large order from an institutional investor–like a pension fund–it can instantaneously position itself on the other side of the trade, driving up the prices artificially."
These advantages are measured in mere milliseconds. Today's stock market isn't just steered by frantic people on the trading floor barking orders into their phones like you see in the movies. More and more, the market moves thanks to high frequency trading organizations, using computer algorithms to perform a huge volume of purchases or sales in tiny fractions of a second.
How fast are they? Back in September, traders in Chicago moved on a Federal Reserve announcement five milliseconds before the competition. In human terms, 0.005 seconds is incomprehensibly small—one-sixtieth of the time it takes you to blink. But those Chicago traders got the news faster than it could have physically traveled from New York, launching an investigation into how traders managed to beat physics.
http://gizmodo.com/ny-is-cracking-down-on-high-frequency-trading-tech-that-1546580346
These advantages are measured in mere milliseconds. Today's stock market isn't just steered by frantic people on the trading floor barking orders into their phones like you see in the movies. More and more, the market moves thanks to high frequency trading organizations, using computer algorithms to perform a huge volume of purchases or sales in tiny fractions of a second.
How fast are they? Back in September, traders in Chicago moved on a Federal Reserve announcement five milliseconds before the competition. In human terms, 0.005 seconds is incomprehensibly small—one-sixtieth of the time it takes you to blink. But those Chicago traders got the news faster than it could have physically traveled from New York, launching an investigation into how traders managed to beat physics.
http://gizmodo.com/ny-is-cracking-down-on-high-frequency-trading-tech-that-1546580346
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