Speed Of Light


Feb 23, 2019



Feb 23, 2019



The high-frequency trading (“HFT”) industry has continued to accelerate since Michael Lewis’s Flash Boys exposed HFTs whoscalp” small amounts of money from trades.

Back in 2011, the computers featured in Flash Boys could execute a trade in five microseconds (or five-millionths of a second). However, the FT has revealed that the data is now moving 60x faster. The transmission has gotten so fast that they are bumping up against the limits of the speed of light!

A finance professor at the University of Edinburgh recently explored the comical implications of the HFT war for speed. In one example, he investigated HFTs fighting in a Chicago suburb, trying to put their towers as close as possible to a nearby data center run by CME.

But it’s not just HFTs that remain controversial here. The big stock exchanges benefit tremendously by charging massive fees to connect. IEX, the upstart exchange featured in Flash Boys, claims to charge 10x to 19x less for access to market data. To call attention to the issue, they are even commencing with their first TV ad on CNBC.

So as the Masters of the Universe race towards trading at the speed of light, we all need to remember that until time travel becomes a reality we're all kinda stuck with the physics we've been dealt with - namely, that light can only move at 30cm a nanosecond.


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