Neutrinos to Give High-Frequency Traders the Millisecond Edge

Particularly in that the government and the Fed try to control the financial markets by funneling money in and out of the stock and bond markets, they have essentially become Federal government enterprises. As such, they should be regulated so that participants have equal access at equal speeds. ~ Ilene

Eighty some years after Wolfgang Pauli first postulated its existence, the lowly neutrino is now on the cusp of being harnessed to facilitate automated high-frequency trading through earth itself. That is, if this weakly-interacting, electrically-neutral subatomic particle can be successfully time-encoded and pointed from one financial center to another.

Trading floor of the New York Stock Exchange a few years before the arrival of computer-driven information technology. Credit: Wikicommons

The idea is that by sending neutrino-based buy-and-sell messages via a 10,000 km shortcut through earth; high-velocity traders could handily beat their competitors.

Most neutrinos are leftover relics of thermal reactions that took place during the Big Bang, some 13.7 billion years ago. Today, however, they’re artificially generated inside nuclear reactors, or in particle accelerators like those at Europe’s CERN outside Geneva and the U.S.’ Fermilab near Chicago.

“To produce encoded neutrinos, you would need an accelerator which you can control, in order to accelerate protons to high energy, then slam them into a target and let the resulting secondary particles decay into neutrinos,” said John Learned, a particle physicist at the University of Hawaii at Manoa. “The higher the energy, the better the neutrinos would point.”

Because neutrinos travel at the speed of light, traders using the technology would on average have a nearly 30 millisecond time advantage, with participating London and Sydney brokerages garnering a full 44 milliseconds.

Subatomic particles caught in the process of radioactive decay. Credit: CERN

High-frequency traders are notoriously secretive about divulging trading times even to colleagues within their own firms, since any such time-dependent trading edge can be fleeting. But many programmed trades are now known to take place within milliseconds or less.

Continue reading: Neutrinos to Give High-Frequency Traders the Millisecond Edge – Forbes.

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