Public Power Daily Logo

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.


Be the first to rate this item!

Please Sign in to rate this.


  Add Your Comment

(1000 of 1000 characters remaining)

Senior Vice President, Publishing 
Jeanne Wickline LaBella

Editorial Director
Robert Varela

Editor, Public Power Daily
Jeannine Anderson

Communications Assistant
Fallon W. Forbush

Manager, Integrated Media 
David L. Blaylock

Integrated Media Editor 
Laura D’Alessandro