How a retail investor can trade economic data
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If you weren’t convinced before, you should be now.
It’s always been known that institutional firms have faster connections and quicker execution than retail investors, giving them a decided advantage when trading market-moving economic news.
But now, with revelations the University of Michigan’s consumer sentiment report, and other economic data, gets sold to some investors early, what can a retail investor do?
“Retail investors who think they can be good short-term traders are kidding themselves,” said Cromwell Coulson, president and CEO of OTC Markets Group Inc. “They should consider economic reports as part of their overall investment strategy, but the idea that we have a level playing field for intelligence and retail investors can in the short term out-trade professional high-frequency traders is wrong.”
Coulson’s comments reflect the view of many market observers after it became widely known that high-frequency computerized traders pay large fees to have access to the University of Michigan’s often market-moving consumer sentiment report two seconds before anyone else.
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