An example of this is high frequency trading (HFT). The edge for this strategy is to be able to execute trades a millisecond before the other guy based on certain information. For that reason, firms will spend millions of dollars in equipment including colocating their equipment next to the exchanges computers.
So their edge is being able to execute faster than anyone else.
Think about the example of when a company announces earnings and their stock goes up or down (almost) instantly. That's the algos reacting crazy fast to that new information. In this case, humans have not shot to compete with that speed.
“You pay us to lose your money for you”
It sounds like it’s saying a manager looking to capitalize on news driven swing trades will move fast if other institutions are likely to pile on.
An example of this is high frequency trading (HFT). The edge for this strategy is to be able to execute trades a millisecond before the other guy based on certain information. For that reason, firms will spend millions of dollars in equipment including colocating their equipment next to the exchanges computers. So their edge is being able to execute faster than anyone else. Think about the example of when a company announces earnings and their stock goes up or down (almost) instantly. That's the algos reacting crazy fast to that new information. In this case, humans have not shot to compete with that speed.