The Mystery Of $600 Million Traded In The Blink Of An Eye
Here's a mystery involving physics, technology and the markets that meant the difference between nothing and millions of dollars.
Last Wednesday, the Federal Reserve announced it would not be tapering its bond buying program at 2 p.m. ET. The news takes seven milliseconds — about the speed of light — to reach Chicago. But before the seven milliseconds was up, a few huge orders based on the Fed's decision were placed on Chicago exchanges. CNBC broke the story:
"According to trading data reviewed by CNBC, they began buying in Chicago-traded assets just before others in that city could possibly have been aware of the Fed's decision. By one estimate, as much as $600 million in assets changed hands in the milliseconds before most other traders in Chicago could learn of the Fed's September surprise — a sharp contrast to the very low volume of trading ahead of the Fed's decision."