Wednesday, August 8, 2012

"Hot New High Frequency Trading Weapon: Drones"

From Mark Gongloff at the Huffington Post:
Drones: They're not just for killing anymore.

They're not just for killing people, I mean. Soon they will be for killing your money in the stock market, according to a must-read new Wired piece about the dramatic rise of high-frequency trading.

In the piece, Jerry Adler writes about attending the March 2012 New York Battle of the Quants, where the evil geniuses of robot trading leave the safety of their remote island laboratories to talk about their latest plans for market takeover.

One of the most troubling problems high-speed traders face is the space between places like London and New York, with annoying things like air, water, land and sharks interfering with the robots' light-speed communications.

The solution to this problem? Frickin' drones:
Unlike the New York-Chicago route, the Atlantic Ocean is a highly unsuitable environment for erecting microwave towers. On the other hand, when I raised this point at the Battle of the Quants with Alexander Dziejma, chief architect at a high-frequency trading firm called Dymaxion Capital Management, he scoffed. 
"They're doing amazing things now with drones," Dziejma said.
Sure, he said. A fleet of unmanned, solar-powered drones carrying microwave relay stations could hover at intervals across the Atlantic. I started to come up with all the reasons that was a crackpot idea, then realized I'd heard 10 crazier things since 9 am that day. "Someone will do this eventually," he said.
I have no doubt that this was not even the craziest thing Adler heard that day. Another thing these quants have on their minds is someday getting ahold of particle accelerators to create sub-atomic neutrinos that can be used to carry important messages, like "sell 10,000 shares of Facebook" at slightly faster speeds, by shooting them straight through the earth....MORE