Do High Frequency Traders really need the new low-latency data feeds?

(Last Updated On: September 10, 2012)
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High-frequency traders – those who can process information and make trades milliseconds faster than everyone else – will always have the upper hand in today’s markets. They get there the firstest with the mostest, so to speak.

And some private data providers are making this even easier. For example, the Institute for Supply Management (ISM) has started a new “low-latency” feed for high-frequency traders. When the ISM releases its index of manufacturing activity data, it sends the “low-latency” feed and the Business Wire report at the same time. But high-frequency traders will get it milliseconds earlier, which makes all the difference.

HFT traders are reaping huge revenues from these new “low-latency” feeds. And well they should, because they’re paying often-significant fees to get the data before everyone else.

But the moves don’t cross any legal boundaries, despite what you might think. After all, everyone technically gets the information at 10:00 am. We humans don’t notice the difference in the timing, but a good HFT set-up definitely will.

To read the original article, go here now:

Why High-Frequency Traders Will Always Beat You


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