Video Shows How Insane Trading Goes Right Before Important Data Drops

Two days ago there was some strange trading activity before the May Consumer Confidence number came out. There was an explosion in SPY (the SPDR Sector S&P ETF), the eMini (electronically traded futures) and hundreds of other stocks 1/4 second before the number came out.

In trading time, that’s forever.

Eric Hunsader the CEO of market research firm Nanex, told Business Insider that the strange activity was most likely a case of ‘banging the beehive.‘ That’s the phrase traders use to describe what happens when a high frequency trader sends out a barrage of orders before right before a key event (like a report), impacting price and forcing everyone in the market to move their positions.

It’s wild stuff, and seeing it in action is even wilder. Today, Nanex posted a video of trading in the SPY ahead of the Consumer Confidence number. You can check it out below. It shows a half second before the 10:00 am announcement, slowed down for 5:39.

You’ll note activity explodes at 9:59:59.755.

Also, just FYI, the little colourful bars are exchanges.

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