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Quotes

Why you shouldn’t trade the news

Short answer:You will be late

A shocking revelation from the WSJ:

When the Institute for Supply Management releases its index of manufacturing activity next week, the headlines from the report will flash to traders at what their eyes tell them is 10:00 am. But unless they are subscribers to a new low-latency feed provided by Thomson Reuters, they’ll actually be getting it late—and depending on how they’re positioned, it could be too late.

In July, the ISM signed a contract with Thomson Reuters to offer a streamlined version, called “low-latency,” of its closely watched business-activity report. It will release the full report to Business Wire, a press release service, at exactly the same time.

Investors with the superfast computers and algorithmic-trading software needed to read and act upon the low-latency line’s digitalized information will inevitably be the first to trade on the news. The advantage these high-tech traders enjoy is measured in just millionths of a second, but it will be more than enough time to beat competitors who instead must rely on news services that generate headlines from the Business Wire release

 

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Links

Linkfest:Sept 5, 2012

Some stuff I am reading today morning:

RCom:The nightmare continues (BusinessLine)

RBI Watch:India’s post crisis economic challenges (RBI)

India’s potato prince gets free power (Bloomberg)

Murder spotlights Pakistan’s heroin kingpin (Reuters)

Should investors care about economic growth? (Go2CIO)

John Hussman on moving average crossover strategies (TRB)

The worst housing markets in the world (BusinessInsider)