When The Speed Of Light Is Too Slow: Trading at the Edge

IMO, the obvious solution to this madness is to quantize stock trades; i.e. to only allow stock prices to change once every 10 seconds.<p>As long as transactions weren't announced until the end of the period, there wouldn't be any benefit from microsecond advantages. And then stock trades would begin to go back to being based on the value of the stock, not what a model says it will do in the next 2 seconds.

It also becoming a problem in semiconductor design: at 1GHz, light will only move 30cm between cycles. Thats not a lot if your memory isn't located close to your ALU.

The midpoint locations mentioned in this article are directly applicable to Seasteading. <a href="http://seasteading.org/" rel="nofollow">http://seasteading.org/</a><p>Many of these optimal trading locations are in the ocean. The spar buoy based structures designed by the Seasteading Institute are directly applicable, as they are about the only seagoing designs that are safe for permanent habitation. (Immune even to rogue waves.)

It's funny to think that some of the physicists who've left academia to join these companies might end up being paid a fortune to work on the exact same problems that they used to be paid a pittance to work on!

If Einstein were around today, I wonder if he'd be working on Wall Street?

It's sad to see fast fiber optics (and the expertise that goes into building and running it) wasted on gaming the system in this way when a change in the rules would remove the loophole giving people incentive to do it.

The speed of light in optic fiber is about 66% of c. Is it feasible to just build a hollow reflective tube/waveguide?

Most exchanges that trade "arbitragable" instruments are in the same timezone and geographic location (NY-Chicago is one exception). There is no point having the optimal colo between TSE and NYSE because they have no overlapping hours nor do they have anything that trades on both and is fungible.<p>This research is patently academic. This is what happens when two pointy heads in ivory tower with zero empirical trading experience dream up something. Then all geeks go ga-ga talking about fiber optics and sea steading and other bs.

Maybe we could use quantum entanglement devices to allow for faster trades? Since the speed of light in the medium is 0.66c you could probably get as close to c as possible.

That cable map is at <a href="http://eu-ix.equinix.com/joomladev/images/repository/Equinix_TGMap_MTS_15.pdf" rel="nofollow">http://eu-ix.equinix.com/joomladev/images/repository/Equinix...</a>

Automated trading is almost to an equilibrium, where the costs will begin outweighing the profits.