Huge market trades
In September 2013, the Federal Reserve announced their interest rate decision at 2pm in Washington. 2.03 milliseconds afterwards , several huge orders valued at US$600 million were placed on the Chicago exchange.
What is this activity evidence of?
The straight line distance from Chicago to Washington is approximately 600 miles or 950 kilometers.
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1 solution
It would take 9 5 0 × 1 0 0 0 / ( 2 . 9 9 8 × 1 0 8 ) = 3 . 1 milliseconds of traveling at the speed of light, for information from Washington to reach Chicago. In reality, it would take more time in order to do so, due to how fast computers can encode and decode the information, and that the cables are not perfectly straight. Nanex estimates that currently the quickest time is 7 milliseconds for news to travel between Chicago and Washington .
As such, the Federal Trade Commission concluded that this is due to insider trading, where the suspicion is that some reporter(s) who were given early access to the information at 1:50pm, successfully leaked it out.
See the article on CNBC .