This is mind-blowing: someone has exploited the difference between the speed of fiber-optic communications and speed-of-light communications to make a market killing! I'm not kidding:
How did they do it? No one knows yet, but it's doubtful it was a slick technical exploitation of the speed of photons or electrons. My best guess is someone had a program ready to go to do the trading for whichever way things went, and somehow got the information to a second party so they could set it up to fall within that communications speed discrepancy so they could look innocent about was technically apparently legal but in truth an immoral exploitation of the system.Last Wednesday, the Fed announced that it would not be tapering its bond buying program. This news was released at precisely 2 p.m. in Washington "as measured by the national atomic clock." It takes seven milliseconds for this information to get to Chicago. However, several huge orders that were based on the Fed's decision were placed on Chicago exchanges two to three milliseconds after 2 p.m.
Of course, there are other questions to think about, but I'm most interested in how they really did it.