Since it takes a while to digest the report after having seen it, chances are that they were in possession of the report far earlier than T-400ms but waited until they were in a time window where they knew the regulators would not come after them.
This is how fortunes are made. By taking advantage of loopholes in the regulatory mechanism.
I don't know the way these reports are structured, but is it regular enough where there's even a possibility that a bot could digest, analyze, and act on the information there in near real time?
How can you read this chart, and infer from it that the activity is due to having already read the report?
Surely everyone knew that the report would be released at 10:30, and they had strategies (or hedged positions) that were not as likely to be influenced by the contents of the report as by the market forces surrounding their orders?
> It is worth pointing out that the EIA Natural Gas Report comes out weekly (every Thursday at 10:30) and the market reacts within a few milliseconds. This is because the report centers on one number which makes it easy for machines to process and take action.
True but I also assume a large part of algo trading is deducing up/down signals from new information and acting quickly. I've heard the bigger reason high-freq algo trading is used is to mask larger moves in position in noisy trade bundles, avoiding price shock.
This is how fortunes are made. By taking advantage of loopholes in the regulatory mechanism.