sold to some investors early... "The news and data firm charge large fees, over $5,000 a month, to grant speed-traders access to the data at 9:54:58 a.m. Eastern time, two seconds before everyone else. Read a report on the consumer-sentiment index. Meanwhile, the Chicago purchasing managers index, a Chicago-based indicator of business activity, is delivered to premium high-speed subscribers at 9:42 a.m. Eastern time, three minutes before they are released publicly." http://www.marketwatch.com/story/how-a-retail-investor-can-trade-economic-data-2013-06-14. I was listening to Bloomberg yesterday and the commentators were discussing how all the indices were dropping just prior to the Sentiment being released.
If the data is coming from a trade association that relies exclusively on memberships and data products for its existence, I don't see a problem with selling key data early to those willing to pay. I do have a problem if state and federal taxpayers are directly or indirectly supporting the organizations that generate these valuable reports. Three that come to mind: - Univ of Michigan consumer sentiment survey - Arizona State's Institute of Supply Management (ISM) - National Oilseed Processor's Assn (NOPA) monthly soybean crush report. This is a trade association but at the first point of sale, every soybean sold in America is subject to a mandatory 'soybean checkoff' where one half of one percent goes to research and market promotion. That's in addition to the govt's heavy hand in agriculture at the federal level. http://commoditiesupdates.thomsonreuters.com/nopa/
can't recall which, maybe EU releases but Thompson Reuters releases some reports 2 min early to subscribers, will post if I find the info
When I was trading Chicago prop, we were U of M subscribers and indeed participated on the conference call - so we had a few second jump on the news outlets like Reuters or Bloomberg. True fact.
"Front running" is the easy way to make money. Some of it is apparently legal, but mostly not. (Hard to imagine the SEC condoning some front running while punishing other... but I guess that all depends upon who lines your pockets.)
We had clerks in the S&P pit and the Bond pit as well with a headset broadcasting into a squawk box exclusively for our trading room. The firm principals owned seats, and so the clerks were our exclusive employees paid wages and benefits on a W-2 and were wearing our full membership badges. I would say that the U of M membership was not illegal or "front running" in the literal sense of the word. All of this was, IMHO, useful at times but it was not a consistent edge that made traders fortunes per se. As the floor volume migrated to the screen, the tables were turned and all of that went away. So it was a temporary "edge". And the market's broader reaction to a data release could be much different than what a trader's interpretation is in a vacuum two seconds before the general public sees it on a news wire. So, that was really a double-edged sword. The much broader implication was that many scalpers relied upon gamesmanship to make some money, and when those "edges" disappeared ( and they always do ) they did not know WTF to do next. They did not last long at all. In the final analysis, we all need a trading system.
The above reminds me of the "Floored" documentary that's available on Netflix. Few of the characters elicit sympathy and one of them is particularly unlikable. His buddy, who apparently has made the transition from floor to screen, is trying to help him out but he won't listen. He just screams and swears and cries and says the screen/technical analysis/whatever are all worthless, that everyone's out to destroy him, the floor was the only pure market in the world, blah, blah, blah and wah, wah, wah. Watch it if you've got an hour or so to kill (it's short). The guy who hangs big-game trophies all over his house is a hoot as is the guy who never goes anywhere without a donkey dick cigar hanging out of his mouth.
I traded on the floor for three years before Project A started and I had the opportunity to become one of the first electronic traders. A few years later, I became one of the early DTB and Liffe electronic traders. I had a difficult time making money on the floor - even if I was first, the floor broker gave the order to his brother-in-law standing next to him. You had to be "in the club" so to speak to get any access to order flow. The "juiciest" trades in the pit were never or rarely were offered to the pit by open outcry. I had to stand down in the pit, and you could see all of the top step brokers and locals filling out trading cards like crazy but you had no idea what was transacting between them. I started making money as soon as electronic trading became available. It was the ultimate in true fairness - if I was first in the order queue, I got the first fills. I didn't have to be in the blow and hookers club.
The scandal of the UoM professor 10 years ago. http://www.marketwatch.com/story/dont-let-scandal-hurt-michigan-survey Nothing new under the sun.