Reply to post:

Twitter shares soar after buyout story appears on bogus Bloomberg site


Much trading is now done at very high speed, to capitalise on changes in the market. It's not about buying some shares and watching the company grow, it's about developing the most effective algorithms and getting information to feed into them the quickest.

It's a bit of an arms race and what you can see is when there is some spike, other algorithms will kick in to buy stock that is trending up quickly - the assumption (by the algorithm's creators) being that there is some good news in the market driving that.

So, not all the people forcing that price up necessarily had the news in question.

That said, there are services that will scour everything and publish it so some who did see this news didn't necessarily see it from the website. Traders also forward stories to each other so it all gets around.

AND, the point is that it really doesn't matter if the story was fake or not - to the big traders. What matters is that there were two changes in th share price, both of which could be capitalised on if one has the right algorithms and gets the information quickly enough - there are plenty of those who would have sold it higher than they bought it an earned a tidy gain.

Longer-term investors would have been unaffected as the price corrected so it's really only the high-speed traders who weren't quite speedy enough or whose algorithms were set differently who would have been negatively affected.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2022