3 ms·

I think that the unethical (illegal?) problem is already inked in black and white where the three tiers of market information recipients exist. I didn't make t

by deveac 13y ago

I think that the unethical (illegal?) problem is already inked in black and white where the three tiers of market information recipients exist. I didn't make that clear at all in my comment, but yeah, I agree that the 4th tier is definitely speculation at this point. I agree that it would be interesting to look for the payout skew for the numbers; that would just verify an additional transgression in my book. Unfortunately nobody reads my book so to speak :)

theorique 13y ago
It's neither illegal nor unethical for a private entity to invest money and manpower to compile statistical data, to release it in a staggered fashion, and to charge purchasers for early access.
- Incinr8r 13y ago
  It sounds innocuous enough with absolutely no context, but the fact is that they are selling market-moving data, and they know it. They know exactly what staggered release of this data does: create an uneven playing field for all but the wealthiest investors. This causes the creation of false profits that don't come from actual risk, or underlying value of securities, but by screwing retail investors, pension funds, and anyone else who doesn't start off with absurd amounts of money to begin with. Sure sounds unethical to me.
  - theorique 13y ago
    Of course they are selling market moving data. If it weren't market-moving, why would anybody pay a premium price for it? Just because something is market-moving does not make it "material, non-public information" about a specific company. And just because something is market-moving doesn't mean that a trader or hedge fund or whoever makes use of this data will gamble correctly and win every time. You see people paying for privileged access to information all over the place. For example, on a slower time scale, industry analysts hawk expensive monthly newsletters or one-time reports. Bloomberg terminals provide news feeds and market data for the bargain price of ~$2000 a month.
    - Incinr8r 13y ago
      I'm no financial or legal expert, but by market moving I am referring to data that moves the aggregate market in a fairly predictable direction. If jobs or the consumer confidence numbers go up, the market follows and vice versa. If your system gets this data before everyone else you essentially have a money-printing machine (at the expense of everyone else). If you report data that's valuable because the federal government uses it in monetary policy decisions, then just push it to your customers as soon as its available for a flat rate. When a company intentionally holds back data to make money on an incremental time difference, I'm sorry, that seems scammy and unethical to me. As to Bloomberg consoles, that seems like a slightly different case, but if they similarly tier, then it is also unethical IMO. Don't pit your customers against each other.
      - theorique 13y ago
        In the trading game, there are very few things that move the broad market in a predictable direction. Simple correlation and causality get very, very hazy. It's not a simple matter of: * get data a little early * go long on the index * profit! A trader could execute all possible best-practices, and the numbers go the 'wrong' way. Or they go the 'right' way for a while, but then turn around as other traders cash out. Regardless, there's no guaranteed profit just because you have paid for early access. The presence of risk-taking traders on all different time scales in secondary markets means that there's liquidity and accurate price-formation at a range of different time scales. At the very shortest time-scales, all customers are already against each other - it's the nature of a very liquid market, where A's gain is B's loss and vice versa. But all this churning activity means that if you want to cash out your Apple stock, there's going to be a buyer right there on the other side, at all times. Without a deep reserve of risk traders willing to take the other side of every trade, liquidity is lost and capital is less likely to be attracted to the public markets.
- oijaf888 13y ago
  Isn't the University of Michigan a public entity?
  - theorique 13y ago
    True. Although this isn't really germane to the main point of whether they (via Thomson Reuters distribution channel) are doing a bad thing by charging high prices for early access. Apparently UM gets a $1M/year or so through their distribution deal with Thomson Reuters in order to perform this research.
- 001sky 13y ago
  "It's neither illegal nor unethical for a private entity to invest money and manpower to compile <news articles>, to release it in a staggered fashion..." etc. Actually, it is illegal to manipulate markets through selective disclosure. People have gone to jail for trading off of pre-published news articles. Not sure what your point is, if you consider data market moving, its news.

by deveac 13y ago

theorique 13y ago

It's neither illegal nor unethical for a private entity to invest money and manpower to compile statistical data, to release it in a staggered fashion, and to charge purchasers for early access.

Incinr8r 13y ago
It sounds innocuous enough with absolutely no context, but the fact is that they are selling market-moving data, and they know it. They know exactly what staggered release of this data does: create an uneven playing field for all but the wealthiest investors. This causes the creation of false profits that don't come from actual risk, or underlying value of securities, but by screwing retail investors, pension funds, and anyone else who doesn't start off with absurd amounts of money to begin with. Sure sounds unethical to me.
- theorique 13y ago
  Of course they are selling market moving data. If it weren't market-moving, why would anybody pay a premium price for it? Just because something is market-moving does not make it "material, non-public information" about a specific company. And just because something is market-moving doesn't mean that a trader or hedge fund or whoever makes use of this data will gamble correctly and win every time. You see people paying for privileged access to information all over the place. For example, on a slower time scale, industry analysts hawk expensive monthly newsletters or one-time reports. Bloomberg terminals provide news feeds and market data for the bargain price of ~$2000 a month.
  - Incinr8r 13y ago
    I'm no financial or legal expert, but by market moving I am referring to data that moves the aggregate market in a fairly predictable direction. If jobs or the consumer confidence numbers go up, the market follows and vice versa. If your system gets this data before everyone else you essentially have a money-printing machine (at the expense of everyone else). If you report data that's valuable because the federal government uses it in monetary policy decisions, then just push it to your customers as soon as its available for a flat rate. When a company intentionally holds back data to make money on an incremental time difference, I'm sorry, that seems scammy and unethical to me. As to Bloomberg consoles, that seems like a slightly different case, but if they similarly tier, then it is also unethical IMO. Don't pit your customers against each other.
    - theorique 13y ago
      In the trading game, there are very few things that move the broad market in a predictable direction. Simple correlation and causality get very, very hazy. It's not a simple matter of: * get data a little early * go long on the index * profit! A trader could execute all possible best-practices, and the numbers go the 'wrong' way. Or they go the 'right' way for a while, but then turn around as other traders cash out. Regardless, there's no guaranteed profit just because you have paid for early access. The presence of risk-taking traders on all different time scales in secondary markets means that there's liquidity and accurate price-formation at a range of different time scales. At the very shortest time-scales, all customers are already against each other - it's the nature of a very liquid market, where A's gain is B's loss and vice versa. But all this churning activity means that if you want to cash out your Apple stock, there's going to be a buyer right there on the other side, at all times. Without a deep reserve of risk traders willing to take the other side of every trade, liquidity is lost and capital is less likely to be attracted to the public markets.
oijaf888 13y ago
Isn't the University of Michigan a public entity?
- theorique 13y ago
  True. Although this isn't really germane to the main point of whether they (via Thomson Reuters distribution channel) are doing a bad thing by charging high prices for early access. Apparently UM gets a $1M/year or so through their distribution deal with Thomson Reuters in order to perform this research.
001sky 13y ago
"It's neither illegal nor unethical for a private entity to invest money and manpower to compile <news articles>, to release it in a staggered fashion..." etc. Actually, it is illegal to manipulate markets through selective disclosure. People have gone to jail for trading off of pre-published news articles. Not sure what your point is, if you consider data market moving, its news.