Mega profits from milliseconds

banker xYou’re an avid investor. You may be retired or even a professional investor. You may just be watching a business show. You hear a story about a stock – it’s breaking news. You pull up  quote and the shares are already down or up 10%. You get on Yahoo and pull up the news story and it’s time stamped 2:08pm. Just out of curiosity you pull up the trade log of the stock and you notice that trades went off on the shares at exactly 2:08, exactly when the story was released. By the time you saw or heard of the story, maybe 30 seconds had passed. Yet it’s already up 10%. You wonder how that is possible.

It’s a secret the big banks have been trying to keep quiet for a very long time. Even investors like Warren Buffett know about it and maybe even take advantage of it. And, it makes them millions, maybe even hundreds of millions of dollars all because they have information you don’t have and they get it milliseconds before you. That’s all it takes, a couple of seconds and you’re behind the real crowd.

There’s a saying on Wall Street – “if you’re not on the inside, you’re on the outside.” And, trust me, most investors are on the outside.

It’s all about access to new and how much you’re willing to pay. Companies like BusinessWire that put out press releases that companies submit or that are filled with good or bad news that can affect the price of a stock actually sell this information by way of “direct feeds” meaning that before the news hits the presses, it’s already hit the inbox of the savviest and richest investors. Oh, and Warren Buffett? HIs company, Berkshire Hathaway owns BusinessWire. Is it a wonder that the inside guys are always cleaning up?

But, it’s an open market and you can buy the same information in absolute real time as well. It’ll cost you a pretty penny though, to the tunes of thousands of dollars per month. But if you’re a big trader, it’s worth every penny.

Wall Street has been rigged for as long as I have been following it. It’s the easiest market to rig as well. Before you as an individual investor get a chance to place a trade, it goes through channels. It may seem like a blink of an eye, but there is always someone ahead of you. And, when it comes to news, there’s always someone who has it long before you do. Sometimes the information is truly illegal and the perps are caught for insider trading as we saw with Hedge Fund titan Raj Rajaratnam who was paying company executives for news about what was happening in their business on a daily basis. He’s in jail now, but you can bet when he gets out he will not be staying at a halfway house.

Getting caught on Wall Street is the exception, not the norm. It’s a self regulating body for the most part and that leaves a lot of room for wiggling. And, trying to prove malicious fraudulent intent is almost impossible to prove. The bar has been set so high, it’s no wonder executives of the big banks and firms like Countrywide never spent time in jail. Instead they are living it up, sporting nice tans, in their mansions after cashing in on the boom and bust.

While making money using insider information is certainly illegal, there are many ways to legally beat the crowd by getting to the right information first and in many cases it’s just a matter of milliseconds that can make all the difference between profits and megaprofits.

To your wealth,

Banker X.

P.S. from Midas Legacy Editor: Through his Washington contacts, Banker X exposes insider trading activity and sends appropriate specific BUY recommendations to subscribers to his C.H.I.R.P. service.

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