What is Tape Is Late?
When trading volume is so high that the ticker quotes are lagging behind to keep up with reporting the trades, we say the tape is late.
How Does Tape Is Late Work?
Let's say that trading volume on the NYSE quintuples one day after the government announces a sweeping tax reform and monetary policy change that prove very beneficial for some companies and very detrimental for other companies. As a result, investors scramble to get out of certain sectors and into other sectors. The trading volume is exceptionally high, and the computerized real-time ticker system can only report the trades in linear, sequential order. In turn, there is a 13-minute delay between when a trade occurs and when the rest of the world finds out what the price of the trade was. The tape is late.
Why Does Tape Is Late Matter?
Advances in technology and a variety of trading platforms mean that the tape is hardly ever late these days. Back when the ticker was physically printed on ticker tape, late tape was more of a problem. Regardless, delays in reporting trading information creates information gaps that can cost (or make) investors money because this information is the basis on which many other trades are made.