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Submission + - Stock trades to exploit speed of light (bbc.co.uk)

SpuriousLogic writes: Financial institutions may soon change what they trade or where they do their trading because of the speed of light.

"High-frequency trading" carried out by computers often depends on differing prices of a financial instrument in two geographically-separated markets.

Exactly how far the signals have to go can make a difference in such trades.

Alexander Wissner-Gross told the American Physical Society meeting that financial institutions are looking at ways to exploit the light-speed trick.

Dr Wissner-Gross, of Harvard University, said that the latencies — essentially, the time delay for a signal to wing its way from one global financial centre to another — advantaged some locations for some trades and different locations for others.

There is a vast market for ever-faster fibre-optic cables to try to physically "get there faster" but Dr Wissner-Gross said that the purely technological approach to gaining an advantage was reaching a limit.

Trades now travel at nearly 90% of the ultimate speed limit set by physics, the speed of light in the cables.

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Stock trades to exploit speed of light

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