This morning the monthly jobs report went out at 8:30 am — for traders, that’s like the gun going off in a sprint.
About 482 milliseconds before the shot, however, there was aggressive trading in Treasury bonds and Treasury bond futures (September 2013), according to market research firm Nanex.
Someone sold a bunch of gold futures 62 milliseconds before the number came out as well.
This same early trading nonsense happened last month ahead of the consumer credit number. It has also happened on a few occasions this year before the EIA natural gas report came out. The former case (consumer credit) is a case of batting the beehive — high frequency traders using quotes to get everyone in the market to show their positions.
The latter, according to Nanex, is more likely a case of someone getting information early. The jobs report number, said the research firm, looks more like the EIA report case.
The SEC has said that they will not investigate trades on information that are early by such small fractions of a second.
But they still make an impact. This time, as CNBC’s Eamon Javers reported, the CME was forced to halt trading for 5 seconds in the eMini (electronically traded futures), and on September 10th and 30th Treasury futures. That means the trades triggered a circuit breaker.
Check out two charts of the action below, from Nanex:
And here’s the circuit breaker getting triggered:
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