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This is how fortunes are made. By taking advantage of loopholes in the regulatory mechanism.
After seeing some of their posts earlier and comparing it to live data I record at the colocations, I've concluded that they have clock issues which makes these types of anomalies appear frequently. Or they have a bad data vendor. Interestingly enough, even the regulators don't have good (only millisecond-resolution) trade data.
Since it takes a while to digest the report after having seen it, chances are that they were in possession of the report far earlier than T-400ms but waited until they were in a time window where they knew the regulators would not come after them. This is how fortunes are made. By taking advantage of loopholes in the regulatory mechanism.
After seeing some of their posts earlier and comparing it to live data I record at the colocations, I've concluded that they have clock issues which makes these types of anomalies appear frequently. Or they have a bad data vendor. Interestingly enough, even the regulators don't have good (only millisecond-resolution) trade data.
These are charted with CQS (official) timestamps. Try again.
The trading before the official announcement is a concrete proof, if this is official, and bug/error free. But then again, this is not my forte.
If you saw a bunch of activity happening milliseconds before it should, why would you be the other party to someone you suspect is committing fraud? You will be the primary victim of the fraud.
A pico or nano second is in this digital age is an advantage - it is the fairness of that advantage be it routing or some more underlying more sinister aspect that is the real issue here.
Since it takes a while to digest the report after having seen it, chances are that they were in possession of the report far earlier than T-400ms but waited until they were in a time window where they knew the regulators would not come after them. This is how fortunes are made. By taking advantage of loopholes in the regulatory mechanism.
I don't know the way these reports are structured, but is it regular enough where there's even a possibility that a bot could digest, analyze, and act on the information there in near real time?
Edit to clarify.
Every sell is someone else's buy, and every buy is someone else's trade. If you saw a bunch of activity happening milliseconds before it should, why would you be the other party to someone you suspect is committing fraud? You will be the primary victim of the fraud.
If no such report had come out milliseconds later, the activity wouldn't be suspect. How could a person (or in this case, given the timeframe, an algorithm) possibly distinguish this spike from a 'legitimate' spike? It doesn't make sense to blame the victim of a fraud when the victim has no way of knowing at the time that they are being defrauded.
People may have anticipated increased trading after the rapport release and may have prepared algorithms to try to gain during this event. The algorithms may have started working before the release.
I'm not saying this was actually the case, but my theory is as well supported as the claim in the post.