Want to understand the madness that is high-frequency trading? Stephen Colbert can help you out.
"Things have gotten so out of control that the thing limiting these algorithms now is the speed of light, it's too slow," Engineer-turned-journalist Christopher Steiner told Colbert Wednesday night. "So they're now using microwaves."
Steiner appeared on Wednesday night's episode of The Colbert Report to promote his new book: Automate This: How Algorithms Came To Rule Our World, and he breaks down the process of high-frequency stock trading. The initial movement to more online trading, which started about 10 years ago, helped to democratize stock trading, Steiner told Colbert, but now traders are so concerned with executing trades quickly that "we can lose a trillion dollars in 10 minutes."
As Colbert aptly notes: "They want to make these trades so fast that the ultimate speed of the universe, the speed of light is not fast enough for them to make money."
Watch to see why Steiner compares algorithms to "really big chickens."