Stock Markets are backbone of a country's economy. A lot of people depend on the stock markets to make a living. And these markets decide the future of many things in a country. So what happens when the computer systems that run these markets get compromised? Yes, Hackers have found out new ways now to control the stock markets in their favour!
Stock Markets rely on high-frequency trading networks that help the daily market transactions to complete in microseconds. Well these networks are vulnerable to hackers as they can inject tiny amounts of latency into them which can result in delaying transactions and change the course of trading in the markets. This way they can control the variations in the stock markets as they wish and earn profits in millions of dollars in a few seconds.
Rony Kay, a former IBM research fellow says:
The root of the problem is the increasing speed of networks; as they get faster and faster, our ability to actually understand events taking place within them isn't keeping up. Network monitoring technology can detect perturbations in network traffic happening in milliseconds, but when changes occur in microseconds, they're not visible.
By manipulating specific trading activities by several microseconds, an attacker could gain unfair trading advantage. And because the operation occurs outside the range of monitoring technology, it would remain invisible.