Ofcourse I haven't read the article. The summary provides enough information: 1. The subject is arbitrage, not trading. The impact of the ideas summarized here on trading is negligable. For actual trading, latency is a much less important issue. 2. Arbitrage makes money by exploiting (and thereby reducing) inefficiencies. 3. The profits made by arbitrageurs should go down to reasonable levels, under the assumption that markets are efficient 4. The fact that arbitrageurs are still making enormous profits shows that we have much more serious issues in our financial system than the lag between exchanges

I wouldn't turn in Assange for $5 million dollars. CowboyNeal on the other hand...

Am I the only one thinking of the predicament of bomb 20 in john carpenter's brilliant dark star: cf http://www.youtube.com/watch?v=qjGRySVyTDk and http://www.youtube.com/watch?v=I9-Niv2Xh7w

A common and understandable misconception.

For the remainder of this comment, I choose shares in Google as an example. I have no position in Google, not an opinion on their current price.

Both arbitrage (making use of inconsistencies in the market) and speculation (trading for immediate short term profit, and not for long term investment) are activities that add value. It is important to understand that markets are not only there to facilitates exchanges (e.g. trading in securities), but they also play a vital role in information processing. The activity of trading feeds information into the world: If a person buys 1 share of Google for the price of x, this person is also saying "I am willing to put my money on the notion that 1 share of Google is at least x". The current price of Google is nothing else than the consensus opinion of all market participants.

The accuracy and efficiency of said consensus depends heavily on the tools available to the speculators and arbiters. Say I think that Google is currently overpriced. If the market rewards me for supplying this information, then I would do it. For instance, I could sell Google shares short (i.e. I would sell shares that I don't have, hoping to buy them later on at a lower price and thus make a profit). At the beginning of the financial crisis, a lot of governments disallowed trading short, naively expecting the market to stabilize. What actually happened ofcourse is that information exchange slowed down: if Google was indeed overpriced, this would be known much later to the world if short trading wasn't possible.

The bottom line: speculation and arbiters bring their information into the market and are rewarded for this by their profits. If the information is incorrect, they will be punished with a loss.

I counterclaim that the non-uniformedness of the opponents is of no consequence here. If a party undertakes an operation that puts civilian lives at risk, the importance of the operation must be so that it justifies taking that risk. These are the principles of proportionality and the protection of civilian lives at work.

Is this the best you can do?