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High-speed commodities traders exploit loophole, Journal reports


From the May 2, 2013 issue of Public Power Daily

Originally published May 2, 2013

By Robert Varela
Editorial Director

High-speed commodities traders are using a loophole in the Chicago Mercantile Exchange’s computer system to obtain key data a few milliseconds before the rest of the market, the Wall Street Journal reported yesterday. Companies that connect directly to the exchange’s trading computers are able to get information ahead of the market when their trades are executed, allowing them to detect that prices have gone up or down and then trade on that information, the Journal said. The CME is aware of the time gap and a relatively small group of sophisticated traders have been aware of it for years, according to the paper. Commodity Futures Trading Commission officials said the issue "isn’t currently an area of focus," the Journal said.


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Senior Vice President, Publishing 
Jeanne Wickline LaBella
202/467-2948
JLaBella@publicpower.org

Editorial Director
Robert Varela
202/467-2947
RVarela@publicpower.org

Editor, Public Power Daily
Jeannine Anderson
202/467-2977
JAnderson@publicpower.org

Communications Assistant
Fallon W. Forbush
202/467-2958
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Manager, Integrated Media 
David L. Blaylock
202/467-2946
DBlaylock@publicpower.org

Integrated Media Editor 
Laura D’Alessandro 
202/467-2955 
LDAlessandro@publicpower.org