Weird, Unsettling Graph of the Day

June 7th, 2013 at 12:19 pm

CNBC’s intrepid Eamon Javers just tweeted this a few minutes ago.  It shows three quick burst of gold trades, all downward movements, taking place 62 milliseconds before the release of the jobs numbers at 8:30 this morning.

I’m not sure what to make of it, but it looks an awful lot like some gold traders have found a way to get the jobs number at 8:29:59:838.  The better-than-expected payroll number led them to short gold which is down 2.4% so far today.  There could be other explanations, but I can’t think of them.

Can you?

 

golddrop

Source: Eamon Javers, CNBC

Update: Here’s a Javers piece from earlier this week about a similar mishap involving millisecond trading advantages caused by clock synchronization issues…fascinating and problematic stuff at the cutting-edge intersection of information delivery and automated trading.

 

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7 comments in reply to "Weird, Unsettling Graph of the Day"

  1. rjs says:

    happens all the time…zero hedge documented that someone had the ISM manufacturing data milliseconds before the surprise negative 49.0 print…


  2. jfw says:

    Would be helpful to have more than 2 seconds of data to know whether or not this is actually just normal flux.


  3. Peter Schaeffer says:

    Could be that the gold traders were actually reacting to other market activity. In other words, the leak might have been to folks in the bond, oil, interest rate, securities, etc. markets who initiated trades in response to leaked information. The automated systems that trade gold might have been responding to what they observed elsewhere.


  4. Joe Smith says:

    Rather than someone getting information a few milliseconds ahead and being able to react to it, it seems more likely that someone has figured out how to falsify the time stamp on their trades.


  5. Noni Mausa says:

    So, to prevent this sort of thing, maybe release such information on a Sunday? Would that help?


  6. ezra abrams says:

    what do we need, statistically, to make sense of this ?
    thre are probably 100 markets like gold, and probably 50-100 news announcements per week
    to the probability of something odd, just by chance, is quite high
    at a minimum, you need to look at gold trades for the last month or so..


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