John Larkin wrote:

[snip]

I don't know the details, but there are companies that have set up
just next door to the NYSE and such, to shave milliseconds off their
transaction delays. They spot tiny differences in buy/sell
opportunities and trade stocks for literally seconds.

http://en.wikipedia.org/wiki/Program_trading

http://en.wikipedia.org/wiki/Algorithmic_trading

http://en.wikipedia.org/wiki/High-frequency_trading

You forgot:

http://en.wikipedia.org/wiki/Front_running

Legally, there's a loophole. Since high frequency trades are initiated
blindly, it is claimed that there is no front running taking place.
However, most HFTs are cancelled before completion based on an advantage in
market information propagation. So its just another form of front running
that doesn't get them the cell next to Bernie Madoff.

--
Paul Hovnanian
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Very funny, Scotty. Now beam down my pants!