

The 500 Millisecond Advantage - zen53
http://imgur.com/YeWxA.png

======
3pt14159
Reminds me of a story where one of the major investment banks figured out
(with some pretty advanced statistical models) that certain buyers of stocks
set bought in certain intervals to avoid getting pushed up into a higher
price. For example, say Sun Life was to buy 100k stocks of Microsoft stock.
Rather than buying all 100k at once for a price of 23.45 - 23.60 per stock
they would split it up into 5 orders of 20k stock that would execute on the
11th minute of the hour. The investment bank would see what was going on,
based on Sun's past actions, and would temporarily long MSFT stock for 60
seconds before the order went through and make a tiny bit of profit.

------
eli
I'm not sure why you would link the info graphic and not the article it came
from:

<http://www.nytimes.com/2009/07/24/business/24trading.html>

~~~
chime
Because the two graphics are not exactly the same. The one linked in this post
was made by a redditor:
[http://www.reddit.com/r/business/comments/94gv2/this_is_how_...](http://www.reddit.com/r/business/comments/94gv2/this_is_how_flash_orders_actually_work/)

I cannot attest to whether the linked graphic is correct or not. However, the
NYT article has a 30ms advantage whereas this one talks about a 500ms one.

~~~
eli
Weird, you're right. I would assume it's an earlier version of the NYT's
graphic. Looks like they were made by the same person.

All things being equal, however, I'll trust the NYT over "some redditor"

~~~
katamole
All _else_ being equal. All _things_ being equal would defeat your argument.

------
pkrumins
All this is total dark magic to me.

------
davetufts
"500 milliseconds" sounds so much faster than "half a second".

------
vlorch
i've heard about this practice of traders "front running" a client's large
trades to that will move the market quite a few times, and the story is almost
always followed by something like "and now he's run off to {insert somehwere
low-key and nice} and bought a boat"

