Another Reuters Special Treat For Traders: The University of Michigan Surveys Of Consumers
By Lawrence
Time and again I mentioned in my real-time chat that the University of Michigan Surveys of Consumers is not a public economic report. A proprietary research report is something owned by a private company. It has the rights and discretions to disclose the information anyway it wants to. In this case, Reuters have exclusive rights to the survey results and they can distribute it anyway they see fit, including to make a profit from the information.
Before the bot era arrived in financial markets, it used to be the case that you can get the survey results 5 minutes before the public release if you have a subscription. It sounds perfectly fair to me because it is no difference from any useful information owned by non-public analytical services. Reuters is not even obligated to release the information to the public at all.
The latest twist to this story, however, has created some very angry subscribers of the data. Reuters now offer an ultra fast, computer-algo friend version of the survey results to its special subscribers, who obviously paying a huge premium, to access the survey results 2 seconds earlier than their regular subscribers. That means, those subscribers who used to front run the other traders who have no access to the information until 5 minutes later, are now robbed by the bots that have the information 2 second before them.
Poetic justice or there is no boundary to greed?
I noticed this odd behaviour several reports ago and mentioned that in my real-time chatroom. At the time I thought the bots somehow know the information a few seconds earlier because of data leak. Price actions went wild before the prescribed 5 minutes time window from the official release time. Now I know it is not a data leak.
So next time when the University of Michigan Consumer Surveys is about to be released, you know when to stand at the sideline and let the bots duel it out themselves. There is no point to enter a fight when you have absolutely no edge at all in fighting those who have the information well ahead of you.
In other words, it’s a back-door subscription price increase? After all, who in their right mind would pay a premium for data that’s already out the door?
Well, the problem is that human traders need time to interpret the info but bots can do it in fraction of a second.
Unless the original subscribers have bots built, receiving the report 2 sec earlier won’t help them.