Testing new limits of technology - bit-by-bit (New Scientist)

My favorite line in this piece is "the speed of light limitation is annoying ... " - kinda like speaking about the laws of physics and asking what they are, why they are important and who made them up?  

Our capacity to innovate and overcome physics continues to advance to dizzying realities.  Both good and bad.  Which path will advance?  Will the communication technology catch up to the computer speed?  Or will the computer just find a better and more efficient communications solution?  This bet - $300MM to shave 6 milliseconds off the time between London and New York - is looking to see the light of day and win big.  Watching and learning.  Trading on!

Light is not fast enough for high-speed stock trading

• 01 October 2011 by Jeff Hecht
• Magazine issue 2832. Subscribe and save

Stripping back automated computer trading could shave milliseconds off trades – perfect for traders out to make their millions

EVERY microsecond counts in stock trading. The New York Stock Exchange handles a third of the world's stock trading - around 22 billion messages a day. But NYSE Euronext, which operates the exchange, wants it to get even faster.

Now cable company Hibernia Atlantic is spending $300 million to build a new transatlantic cable to shave 6 milliseconds from the present 65-millisecond transit time between London and New York. It will be the first new cable to cross the Atlantic in a decade and trading firms are likely to pay premium rates to use it.

This is because even though a computer can execute millions of instructions in a microsecond, the furthest light can travel in that time - even in a vacuum - is just 330 metres. That is an age if algorithms are competing to execute the best trades.

"The speed-of-light limitation is getting annoying," Andrew Bach, head of network services at NYSE Euronext, told the European Conference on Optical Communications in Geneva, Switzerland, last week.

With global markets currently in turmoil, it might seem a strange time to worry about the speed of trades, particularly when automated trading wasimplicated in the stock market's May 2010 "flash crash". But traders still want their computers to receive trading data and place orders instantaneously. And customers will go elsewhere if a rival is faster.

READ FULL POST HERE