Bloomberg is reporting on a curious real estate transaction in Chicago and an antenna in an open field, that was erected in order to permit a small group of traders gain a marked advantage over everyone else.
Let’s have a look, shall we?
Tremendous, beautiful antenna, believe me
So you’re wondering, ‘what the fuck is that?’
That nondescript pole on a flat 31 acre plot of undeveloped land is in close proximity to the CME Group. It is owned by a Jump Trading affiliate called ‘World Class Wireless’, who purchased the lot for twice the going rate, or $14m.
The high tech microwave antenna is able to intercept data coming out of the CME before it makes its way to the east coast — creating an arb situation that last microseconds. It is the definition of cheating, rich, powerful people using their position to jimmy rig trades in their favor, all but guaranteed. It’s like having a time machine that can go a microsecond into the future and see prices and then trade off of the knowledge using very sophisticated high speed quants.
Nothing at all wrong with that, right? This reminds of the movie Office Space, where the main actor tried to explain his criminal plan to his girlfriend and merely taking a few pennies out of the penny tray — who couldn’t quite grasp his innocence.
Another virtuous firm, McKay Brothers LLC just won approval to build a microwave tower diagonal to the CME data center — under the name Pierce Broadband LLC — a harmless little telecom company. The approval gives them the right to build a 350ft antenna 600ft closer than their existing one — which could mean all the difference in the world, when attempting to remove pennies from the penny tray.
Webline Holdings is another penny tray grabber — with a ‘license’ to operate a microwave network stretching from the data center all the way to Carteret, NJ, where the Nasdaq data center is located. The trick here is to intercept the signal in Chicago before it gets to New Jersey.
This could all be negated if the CME simply placed a microwave antenna on their roof — all but rendering nearby antennas meaningless. But for some odd reason, they continue to relay data to nearby microwave antennas outside of the data center, which is then stolen by the aforementioned companies above, all for the purposes of rigging markets.
Please explain to me how this is legal?
If you enjoy the content at iBankCoin, please follow us on Twitter
Can’t believe OA put his name on the damn thing. Poor advertising choice.
lol
Didn’t you see Superman 3? That’s how office space ripped the salami slice idea. In fact I think they admit that very thing but I haven’t seen office space in years.
ahah
With money comes power. With power comes more money
Grand times indeed.
$14 mil for the land and they hire a cemetery dude to do the landscaping?
Lmao. I love the fledgling trees planted around it. “NOTHING SUSPICIOUS HERE”
I know what kind of tree I’d plant there. The kind with vitamins T, H and C
Meh, let them fight over fractions of pennies. Definition of zero sum. High frequency trading profits have cratered over the last few years. Co-location solves the exchange side of things, but you can never regulate how quickly people process the info once it leaves the exchange. If someone uses a faster computer processor is that not okay?
Someone should take a magnet to that thing
Now that there is a legit target for ANTIFA fags instead of garbage cans.
What a crazy story. Having read that, it makes me think the market is a banana republic with limitless possibilities of corruption and/or order.
it’s the Flash Boys (author Michael Lewis) all over again
Dear Fly,
What are your thoughts on the exchanges going to penny increments? Is this a license to steal?
What did you think of the fraction increments back then?
Would you propose nickel increments? How would that affect trading on the exchanges?
I think we should go to $0.0001 or further. Allow HFT’s to fight over smaller and smaller pieces and they will matter less and less.
Fractional increments were awesome for day trading before HFT’s. You could make a good living getting 5-6 ticks a day if the share price was low enough. Buy and offer out one tick higher.
I love how Fake News is acceptable now. I also enjoy the story-based nature of it all. Plus, further indication that the political system has sprawled from democracy to anarchy (or banana republic if that sounds better to you). Interesting times.
You evidently don’t know how big of fucking scum bags these faggots at Jump Trading are. From the sluts at the front desks to the homos that occupy their offices they are the epitome of flaming dog shit. About 10 years ago I strolled through their offices near Cabrini Green and laughed at what I saw. They offered me a job and I quickly exited the toxic premises. Its a shit show at this place.
I’m sure the DOJ is on this.
If I’m reading the article correctly, the CME would entertain selling the data before it is sent to New York; they are OK with someone having an edge if they get paid for it.
The part about receive antennas getting some signal from CME microwave paths is amusing. I wonder if CME encrypts the data? With enough bandwidth encryption should not degrade throughput time too much. CME could out engineer the eavesdroppers, but maybe they don’t want to. The eavesdroppers stoke demand for paying to come in the CME front door instead.
I think the executive task for CME is balancing income from preferred access customers with an overall need for the exchange to have credibility.
Nothing a .50 cal couldn’t take out with one well placed shot from yonder expressway.
Muzzle blast would be hell inside the car though…