The world is moving faster and faster. To stay in touch, we require more and more information, from an ever growing number of sources; 24 hr scrolling news, Weibo, Twitter and Tumblr. In the modern world the need to know first is important to us, but nowhere is it more important that in the world of business.
If proof of this was needed, then bear in mind that historians have calculated that in 16th century England fashion moved at 4 miles per year. What was trendy in London in 1500 became fashionable in York (200 miles away) in 1550. Compare that to today’s fashion industry, which is based on moving from catwalk to customer in a matter of weeks, so called ‘Fast Fashion’. One of the leading proponents of which is the retailer Zara. In January 2016, Forbes magazine named Zara’s founder Amancio Ortega as the second richest man on the planet.
Step away from retail and into the B2B world and the competition for fast and accurate price information gets worse. In October 2014, the Wall Street Journal reported how those who paid for some stock price information services were getting their market news three tenths of a second faster than the general public, and as a result making a fortune from beating the public to the trade.
In the best-selling book ‘Flash Boys’, the author Michael Lewis tells the story of how stock exchange trader Brad Katsuyama discovered that trading companies were using the speed that the electronics processed trades to their advantage. If, after hitting the ‘buy’ button, the deal was able to be completed after 4 milliseconds, then it could be blocked by a faster computer, closer to the stock exchange that could make the deal in 2 milliseconds. That 2 millisecond advantage was the difference between profit and loss. A fast blink of the eye lasts 100 milliseconds.
Clearly, if you are a trader of any product, then you need up to the minute information.
If your grandfather was a chemical trader, then he watched as oil prices rose and fell as refineries shut down or wells dried up, but today’s traders watch oil prices that change by the minute.
Chemical traders need to keep an eye on Bloomberg’s market updates, CNBC’s scrolling commodity prices and Twitter feeds (you can follow us at Spotchemi here).
But fortunately, the industrial chemical markets (which buy and sell actual chemical products, not theoretical trades), have not yet reached Wall Street’s speed standards, where milliseconds make a difference. But it is still important to keep informed, especially if you are about to sign a contract to buy or sell chemical products.
For that reason, many traders use a chemical price alert system. They select their favourite products and are sent an email, text or Twitter message if those prices change, or whenever a deal is made on the Spotchemi chemical trading hub.
Is staying informed about commodity prices on the investors market useful? You tell us. Is staying informed about actual chemical products that are being bought and sold useful? We at Spotchemi think so. Because, in today’s business world two facts always hold true; Information is Power and Time is Money.
Which do you have?