Information quality

The quality of information is largely based on its accuracy.  Excluding others from using that information can also be valuable, such as trade secrets, patents, or copyrights.  An additional factor is the information’s timeliness: getting information before someone else allows you to use that information first.  Even fractions of a second can matter.

“CME Defect Aids Speedy Traders,” The Wall Street Journal, February 13, 2018, B1.  Five years ago, some high-frequency traders took advantage of the small time gap between (a) when they received confirmation of trades and (b) when those trades were reported to the market.  Based on this information, they deduced the direction of market movements and sold or bought, as appropriate, before that information was in the market.  The exchange fixed this.  Sort of, as the problem has reappeared, albeit much smaller.  But microseconds matter, when it’s the computers that are doing the trading.

What’s the point?  Well, what information would you pay more for to get it sooner?  Do you rely on getting information at the same time as (or before) your competitors, allowing you to use your superior skill, foresight, and industry to profit from it?

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Filed under Access, Accuracy, Controls, Data quality, Information, Internal controls, Third parties, Value

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