How fast can the stock market assimilate new data? In less than two seconds.
Thompson Reuters proved this in no uncertain terms. It sold information to investors two seconds before it released the figures to the media. There were high-level traders who knew how valuable this information is. So, they paid the company a bundle of money to get access to this information early.
Two seconds is a near-eternity in stock market investing.
But, you say, that would not give you enough time to click your mouse. Quite true.
The markets are so fast today that there is a large building in New York City where almost no one works. It is filled with computers. This building is connected by a fiber optics cable to computers in Chicago, where the options market is located, and where other futures markets are located. That’s all that the cable does: connect the sets of computers. Anything slower than fiber optics is hopelessly slow. The orders would arrive too late to be profitable. If your firm is located a few blocks away from the Carrier Hotel area on New York City, you are effectively out of the market. You are too far away. Your orders will get placed too late.
Incredible? Yes. True? Yes.