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I understand that some stock traders try to quickly act on public information to make profits, for example. In the case of scheduled releases of information, however, why do people keep buy or sell orders open during such events? Why doesn't everyone trading that stock stop, read the report, and then resume trading?

closed as primarily opinion-based by NL - Apologize to Monica, JTP - Apologise to Monica Jul 27 '15 at 22:28

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The early bird catches the worm. The first person who makes use of the information gains! That is why hedge funds pay billions of dollars to place their routers right at the center of wall street. Moreover, the information is not always correct. The article you are reading may be a rumor spread by someone on wall street.Then there is speculation and that is factored into the price. For example:- In spite of all the bad news from Greece, the market still continued to rise. This was because, everyone had an idea about what was going to happen and the price was factored in way before Greece actually defaulted. The game is way more complicated than it seems. If everyone sat down and read reports, opportunities to make millions of dollars would have been lost in those few seconds. (Please note:- I do not mean reading reports is bad)

  • Where exactly does the opportunity to make millions in the seconds after a report is released come from, if not the information in the report? – lazarusL Jul 27 '15 at 20:08
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    They do this for a living and they have a good idea of what the results of a company will be even before they come out. They also know what street expectations are, and they have all the technology( Buzzword feeds,blackboxes etc), to immediately process the results and estimate prices. These technologies are not available to the common public and when they trade large volumes of these stocks, they can make millions even if the stock moves a few cents. So, till a normal person like you or me reads a report, and calculates, these guys have already made the money and have closed their positions. – user19894 Jul 27 '15 at 20:17
  • I get that. What I don't understand is that in order for them to make that money there has to be someone on the other side of every one of those trades. Either A. the person on the other side is another institution who has read the report and has come to a different conclusion or B. the person is someone who hasn't read the report but is still trading stock in a company seconds after a report is released. My question is, why would someone choose to be in category B? – lazarusL Jul 27 '15 at 20:23
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    Because there are a lot of speculators in the market! There are a lot of people who gamble without knowing things. Why they do that is more of a psychological question. Just like there is no explanation to why most of the people play the slot machine at a casino even though their odds of winning are less. But gamblers do like volatility, and gamblers to make a quick buck (Personal experience). There is also a lot of politics(one institution may agree to buy from another institution at a high price to drive the price up and have a deal on the side). You can never be sure whats going on. – user19894 Jul 27 '15 at 20:32

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