Stock trading at the speed of light. What could possibly go wrong?
That question is not asked in a Forbes piece on Monday by Bruce Dorminey, entitled "Neutrinos to Give High-Frequency Traders the Millisecond Edge."
In this story, serious people seriously contemplate giving Wall Street traders particle accelerators -- yes, I said "particle accelerators" -- to create neutrinos, sub-atomic particles that move roughly at the speed of light and can pass through solid objects with nary a shrug, expressly for the purpose of high-speed trading.
Goldman Sachs CEO Lloyd Blankfein only thought he was doing God's work before. Wait until he gets the ability to create sub-atomic particles.
Using neutrinos as tiny messengers -- for example, telling a computer "You idiot! Get back in there and sell, sell!" -- would give these traders, likely operating in a Bond-villain lair on somebody's private island, a several-millisecond edge over the other poor slobs slogging along at fiber-optic speed, or roughly two-thirds the speed of light, Dorminey writes. Perhaps 44 milliseconds of time could be saved in a trade between New York and Sydney, one scientist estimates. That's like forever.
All it might take to build a particle accelerator/receiver unit, which should fit nicely in the basement of your average Manhattan office building, would be (Dr. Evil voice) one billion dollars, according to Dorminey. That's chump change for the Too Big To Fail set.
Again, this story often asks: Could we? It never asks: Should we? There is already significant controversy around the practice of high-speed trading, blamed by some for the big Flash Crash of 2010 and countless mini-flash crashes before and since. And that's even before traders gain the ability to zap their buy and sell orders through the earth and family pets at the speed of light.
It's all the SEC can do to keep up with old-timey Wall Street crime without constantly falling on its face like Inspector Clouseau, much less figuring out how to use computers for purposes other than hunting for porn. Particle accelerators? Forget about it.
And even beyond the risk of flash crashes and possible malfeasance, there is the other depressing question: Really? This is the use to which we are considering devoting our particle accelerators? So JPMorgan Chase can maybe trade that corn future a little faster than some other poor schlub, to add another penny to its massive cash pile?
And the depressing answer is: Yes. Or, at least, eventually: The Forbes piece is basically speculative, saying nobody is actually working on a trading particle accelerator just yet.
But if one of these suckers can be built, you can bet Wall Street will think hard about using it -- here or overseas, which as New York Stock Exchange chief Duncan Niederauer warned on Monday is where all the high-frequency traders will go if we bother them too much with annoying questions like what kind of risks they're creating in financial markets and whether they're going to create black holes with their particle accelerators.
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