Financial markets have moved well beyond Rothschild’s carrier pigeons. The financial centers of New York and Chicago are 700 miles apart. Fiber-optic cables transmit data between them in approximately seven milliseconds. However, that is an eternity in the life of a high-frequency trader. So Spread Networks has invested $300 million building a fiber-optic cable through the Appalachian Mountains. The shorter cable reduces the time taken to transmit data to about one millisecond.
There are limits to this process. The laws of physics suggest that the speed of communication is limited by the speed of light, which takes four milliseconds to travel 700 miles. If such technology had been available, news of Wellington’s victory at Waterloo would have reached London one thousandth of a second after the result was known. A close run thing would then have taken on a quite different meaning.
An interesting question now arises. In the 21st…
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