Merrill Lynch
Trading in the blink of an eye
The challenge
A bank shows a share or bond price on a 'digital platform' where it is highly visible to anyone who wants to buy or sell. The quicker a bank can react to new prices the better. Traders slower than you will still be showing the old prices so you can buy them and sell them to another trader at a profit.
The following table shows how prices of shares are displayed, so that investors can decide whether to buy or sell.
| Symbol | Name | Price | +/- 24hrs | +/- 7days | +/- | Trade |
|---|---|---|---|---|---|---|
| AB | Abbots Borne | 772.75 | -21.25 | -26.50 |  |
Buy/Sell |
| BE | British & European PLC | 488.25 | -5.50 | -1.10 | |
Buy/Sell |
| CG | Central Greeve | 830.00 | 8.00 | 16.00 |  |
Buy/Sell |
| FR | Friday PLC | 570.00 | -2.50 | -2.50 | |
Buy/Sell |
| NX | Nalnex | 416.88 | -3.63 | -12.50 | |
Buy/Sell |
| NG | Nor Q Group | 554.00 | 1.00 | 2.50 | |
Buy/Sell |
| MZ | Mercury Zest PLC | 690.50 | -5.50 | -10.75 | |
Buy/Sell |
| OO | Optical One PLC | 302.75 | 0.00 | -1.00 | |
Buy/Sell |
| PJ | Present Trading | 387.25 | -5.50 | -10.50 | |
Buy/Sell |
| YG | Yebded Group | 172.30 | 13.80 | 8.70 | |
Buy/Sell |
It´s all in the timing.
An experienced stockbroker can make speedy calculations.
Working out new bond prices usually takes between 1/10 -1/2 a second.
Merrill Lynch knew this was still too slow to consistently beat other traders.
The bank needed to find a way of speeding up their trading reaction time even more.
What do you think?
How could Merrill Lynch speed up their trading reaction time?