As the Stockholm Stock Exchange first computerized trading system was introduced at the beginning of 1990’s performance was second to none. The system was designed to handle about 6,000 transactions a day, with a maximum delay of a few seconds. Twenty-five years later, the stock system handle 250,000 transactions per second, with a delay of no more than 60 microseconds (0.00006 seconds). Into account for the eye’s “resolution,” or reaction time, the Exchange may, in other words rummaging up to 50 000 outlets before a person has any physical opportunity to even consider react. For this reason, many technology-oriented brokerages and trading firms to hire their computers in the Exchange server room in Lunda industrial area so as not to lose valuable time.
– It is often said that one kilometer in tow “cost” five microseconds . Would you compare the actors who have their computers locally in Lunda with actors who have their jar in Stockholm, so has the first deals done already when the price pass Bromma airport on the way into town, says a source who works with financial technology to SvD Business.
But the opportunity to react in so negligible periods of time makes the stock markets and the relevant authorities before a piquant issue. Frequently company news, as a quarterly report, is, like the actual prices a vital part of the market’s information base. The first to become aware of, for example, a profit warning, you simply take advantage of this by selling shares before the rest of the market. This is and has always been a part of securities trading rules. Just because also requires the Stockholm Stock Exchange by the listed companies to all trading participants will have access to new information at the same time.
But what is the meaning of “same time”, when the distribution time literally depends on the length of the fiber cables? The answer is that this is an unregulated and more or less unexplored area.
– We have seen that the timeframes have been shortened, but there are no rules or recommendations that specify how it should look like, says the Stockholm Stock Exchange Monitoring Officer Joakim Battle .
In practice, Battle mean, mean exchange rules to the listed companies must hire a distributor who can ensure that any new information reaches the market on “equal footing”. Cision, one of the distributors, provides a cloud-based service where customers can enter a press release which are then distributed to the market at a given time. Exactly how this works would not Cision tell you, when viewed as business secrets, but from a purely-term relationship between the company not to smaller time periods than whole seconds.
– We can not guarantee that all data is received simultaneously because it depends on how it looks on the receiving end. Our task in the market is to ensure that the information is distributed simultaneously. And with concurrency, we mean a second. We send out everything within one second, says CIO Alexander Mason.
This would possibly less problematic if there were people who sat on the receiving end. Today, these are not seldom machines. When the Riksbank in mid-July lowered the interest rate by 0.5 percentage points, cabled a press release via Cision’s cloud service a couple of seconds at 09:30. The message was received at the news agency Six o’clock 9:30:13. Within one second, the Agency had read the information machine and sent out nine news alerts.
– We have developed a software that reads through press releases and automatically generates news alerts, says Håkan Carlson, Director at Six News.
It is understood not just the news agencies that have seen the possibility of mechanical interpretation, but also market participants.
According to Svenska Dagbladet’s source can be the fastest trading firms make transactions within one ” few microseconds, “and therefore read and act on price sensitive information far faster than a thousandth of a second. Therefore occurs price changes today almost immediately, and not infrequently even before the news can be read from any screen. For long-term investors this is possibly not a big problem, but the concept of “simultaneity” seems indeed to have been a relative meaning.
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