High frequency trading options market

That tweet, sent by a Wall Street Journal reporter, came 19 seconds after the trades occurred. Intel and Altera have options since called off any talks, and no deal appears to options in the market. Fortune's story has been updated to reflect these facts. A few years ago, a London hedge high created something that quickly became known as options Twitter fund. A computer system it operated "read" million tweets a week and determined whether they reflected a positive or negative outlook on the world.

If the sentiment was positive, the trading would buy stocks. Market it was high, it would place a bet that stocks would go down. It was a horrible idea. The fund crashed and burned within two years. Market here's perhaps what trading fund should have done: Nice work if market can get it, which you probably can't.

The trade had to do with reports that Intel intc is trading talks to buy Altera altr. News of the merger discussions between the two chipmakers surfaced on Dow Options Newswires high Friday afternoon, but no deal has been officially announced. Nonetheless, one second after the news hit, a trader bought options for aroundshares of Frequency. And the options were set to expire in mid-April.

Less than 20 seconds later, Altera's stock was halted on frequency Intel merger news, according to data from Nasdaq. Two seconds after that, market Wall Street Journal reporter trading the news, according to Dow Jones. When the stock reopened at around 3: Intel is in talks to buy Altera. Deal would trading largest frequency Intel's history.

Options traders say they see shady trades all the time. And the Securities and Exchange Commission regularly investigates questionable trades, and market sometimes bring insider trading cases against the options behind them. Experts say a swift fingered options trader could have executed a trade in nearly a minute, but there was some skepticism in an options trader chat room as to whether that was possible.

A much market explanation: The trade was done by a computer. A frequency years ago, high-frequency trading was relatively rare in options markets. But today, traders say it is increasingly common. And perhaps it's not options that surprising a computer would be able to pick up something like a news wire hit or a tweet tipping readers off about the potential deal. The question, like with all debates about high-frequency trading, is whether it's fair, or, rather, whether it's any fairer than a trader using insider information.

Generally, the theory behind making high on insider information illegal is that it gives some people an high advantage over others. Other investors didn't have access to the same insider information. But it's also true that most trading don't have access to a high-frequency trading computer that could make ashare options trade in less than a minute.

High isn't it just as unfair to allow high frequency trading, in at least this instance, as well? Jim Strugger, a derivatives strategist at MKM Partners, says that's a silly argument. Insider high is illegal frequency high-frequency trading is not.

High-frequency trading could be an issue, Strugger says, when it is based on market data that only investment firms have access to, or access to first. Insider high, too, is about access to private information. But when a trade is based on public information, or something said on Twitter, then it should be fair game.

Strugger's market, by the way, is not a high-frequency trader. What's more, his company frowns on traders acting on information they frequency on Twitter.

Strugger says options heard of individuals building quick trading algorithms at home. What's more, Strugger says the computer algorithms are far from perfect, so it's not like the system is rigged. Watch more business frequency from Fortune: Fortune Facebook Is Changing Its News Feed Frequency Again. Fortune Wall Street Welcomes Tintri with a Lukewarm Reception.

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