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Neutrino-Powered Financial Trading In Our Future? 275

Posted by Soulskill
from the a-particle-accelerator-for-every-hedge-fund dept.
An anonymous reader writes "In a new feature on the future of high-frequency trading, Wired suggests that neutrino-powered financial trading systems may be coming soon, which would enable extremely low-latency information to be transmitted directly through the center of the Earth between major financial exchanges. If finance becomes the killer app for neutrino communication technology, it may ultimately make Neutrino SETI feasible. Quoting: 'It is only a matter of time, perhaps a few decades, says Alexander Wissner-Gross, a Harvard physicist, before some hedge fund decides it needs a particle accelerator to generate neutrinos, and then everyone will want one. Yes, they travel slower than light, but they indisputably can tunnel through the earth, cutting thousands of miles off an intercontinental message. And just a few days before the Battle of the Quants, right before the bad news about faster-than-light neutrinos, researchers announced they had sent a message by neutrino from the Fermilab accelerator in Chicago to a detector a kilometer away. According to Dan Stancil of North Carolina State University, the signal traveled at "very close to" the speed of light. Unfortunately, the data rate was only about 0.1 bits per second, meaning it would be useless for much more than sending a yes/no signal. "With the right modulation scheme, this could be increased by at least one or two orders of magnitude," Stancil said, adding "I don’t know of a compelling commercial application." But we’ve all heard the (apocryphal) story that Thomas J. Watson of IBM predicted "a world market for maybe five computers."'"
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Neutrino-Powered Financial Trading In Our Future?

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  • by fustakrakich (1673220) on Saturday August 04, 2012 @11:30PM (#40882915) Journal

    'tis goen through the planet core.

  • Who needs fast data rates? No need to send the entire stock exchange of information through this thing. If you can have the price information for two or three key stocks even a half second before everyone else I suspect you could make a killing. Pick a different stock every day, or a couple times a day. They say the throughput could be increased a couple levels right now with the right coding scheme? Give it five years and I bet they can get another order of magnitude out of that. 100 bits would be more tha

    • Re: (Score:2, Informative)

      by hakey (1227664)
      Hong Kong to US is about 150ms latency using conventional technology verizon [verizonbusiness.com]. So taking your own example of needing 100 bits to transmit a useful message (I don't know if that is realistic), the message would need to be transmitted faster than 666bps just to break even with existing communications. Given the cost of neutrino detectors and the current state of technology it just doesn't seem likely.
      • by hakey (1227664)
        I forgot the latency through the earth which is about 42ms. So actually you would need to transmit at 100b / (150ms - 42ms) = 952bps just to break even.
    • by Lehk228 (705449)
      even less than that would be needed, watch a single stock, when it goes up more than X send a neutrino burst
    • by Shavano (2541114)
      One bit of information might be enough. Sell or don't sell.
      • Re: (Score:2, Insightful)

        by Anonymous Coward

        How the fuck do you reach that conclusion? No sell = 0 and sell = 1? With absolutely no way whatever to detect whether it's valid data?

        Actually yeah, Knight would probably buy one of those...

        • by NFN_NLN (633283)

          How the fuck do you reach that conclusion? No sell = 0 and sell = 1? With absolutely no way whatever to detect whether it's valid data?

          Actually yeah, Knight would probably buy one of those...

          It's the Texas Hold'em strategy of stock trading.

          Quantities, limits, stop loss, ... that's old skool thinking. The new paradigm in trading is ALL or NOTHING.
          Either you sell everything or you plow your entire bankroll into one stock, 0 or 1 my friend, black or white. :)

      • by sco08y (615665)

        One bit of information might be enough. Sell or don't sell.

        It's usually buy, sell or hold, but really you want a specific number, which could be very detailed if you're doing microtransactions. And you probably need a few bits to identify which stock you're selling, and all this needs a carrier of some sort. The expensive part, though, is probably securing the transmission.

  • by rossdee (243626) on Saturday August 04, 2012 @11:41PM (#40882991)

    Neutrinos still only go at c
    What we need is tachyon communication for stock trading

    • by mark-t (151149)

      That's true.

      But by travelling straight through the earth instead of being bounced around it from satellite to satellite, the total distance is perhaps only a hundredth as far, and so the information can be thus relayed proportionally faster.

    • by Immerman (2627577)

      My god, you're brilliant! Lets get the only people today who have an immediate financial interest in FTL communications to fund the groundbreaking research needed for it. They'd finally do something useful for a change!

      My money's still on quantum entangling as the mechanism though, as far as I've heard nobody has any reason to believe tachyons actually exist.

  • Depressing (Score:5, Insightful)

    by Anonymous Coward on Saturday August 04, 2012 @11:46PM (#40883033)

    Some of our highest technological achievements end up being used to do one of two things: manipulate capital markets, or blow people up. Expect a neutrino-powered civilian obliterator any day now.

  • It's still higher than that of within the same building or block as the exchange.

    Unless the trading exchange is located at the centre of the Earth. Now there's an idea...

  • by hawks5999 (588198) on Saturday August 04, 2012 @11:49PM (#40883067)
    What a Knightmare!
  • by Dyinobal (1427207) on Saturday August 04, 2012 @11:50PM (#40883073)
    I find it depressing for some reason, that we would develop a technology specifically so a few guys will be able to trade stocks .0000001 second faster.
    • Someone has to develop it. It ain't gonna come out of pure research. If we're being robbed blind by these fuckers, the least they can do is develop advanced communications systems that the rest of us can use.
    • by dabblah (18703) on Sunday August 05, 2012 @12:56AM (#40883543) Homepage

      It's worse than depressing. There is no socially redeeming value to high frequency trading. At best the practice steals a small amount of value from any affected fundamental (or non high speed technical for that matter...) trade. At worst, it may have caused the flash crash or be able to trigger a similar event.

      If we as a world collectively had reasonable securities laws, the idea of high frequency trading would soon become moot. For the right to host the capital markets, the exchanges should be required to be neutral to latency, and certainly not co-host high frequency trading with the exchange computer systems. Also, a very small Pigovian tax on financial transactions would clean up a lot of undesirable activity in the securities markets, this included, while being a source of revenue proximate to provision of a societal good (that being regulation for efficiency sake of the capital markets).

  • by PPH (736903) on Sunday August 05, 2012 @12:01AM (#40883165)

    Funnel all the orders through one old guy wearing green eye shades with a ledger book and a Marchant calculator [wikipedia.org].

    • by Immerman (2627577)

      I give 'em three weeks before they successfully start overclocking him. And another month until he becomes so godlike that he takes over the world and institutes mandatory double-entry-accounting lessons with pass-or-vaporize exams. (he is an accountant after all...)

  • by fermion (181285) on Sunday August 05, 2012 @12:14AM (#40883253) Homepage Journal
    Clearly this is why the financial industry is in such a constant state of crisis. They are basically dumb, believing what any says, as long it might make then a buck. The more stupid, outlandish, and gibberish compliant the idea is, the more they like it.

    I mean really, if they wanted near zero latency communication, they should just come to me for some basic technology. For instance, a basic, yet expensive, path is telepaths. Right now we would simple takes twins or triplets or whatever, test them for basic ability, and then train them. Pay each 100K a year to be on staff for a few year, then replace then as needed. This would be a great job for someone right out of high school. For the longer term we would go to some country with low regulation and genetically engineer the telepaths. At first this would be just selective breeding and early training, but eventually we should have labs set up to create telepaths on demand. Pay for their room and board, keep them on for 10 years, then send them on their way with a couple million in trust.

    A more expensive and lower bandwidth method would be quantum entanglement. Chang the spin on one particle, it's entangled particle will immediately be changed as well. A 8 bit system could be built, An alternating all up then all down could be sent as a metronome, then an STX, then a certain amount of datadata, then and ETX, then a check sequence, then an EOT. Speed would be limited on by how long one must hold a state for reading. The advantage here is that there is absolutely not latency.

    You see, there are always simple solutions when one thinks about it.

    • Lol. For a moment, I thought you were serious.
      I don't see why quantum entanglement would be more expensive and lower bandwidth though. This could be done with simple, mass produced consumer electronics/optics. Too bad it doesn't allow actual information transfer.
  • by Alex Belits (437) * on Sunday August 05, 2012 @12:23AM (#40883341) Homepage

    This is absolutely disgusting, and any society where such a thing is a feasible way of extracting profit, is completely morally bankrupt.

    And we thought, nuclear war is the worst thing that can come from fundamental Physics research. Now nuclear war seeme to be a valid solution to the society that is run by financial companies who run DoS and man in the midle attack on all trade and production, to extract money from everyone.

    • by khallow (566160)
      A great, useful excuse for developing an awesome technology and you're "disgusted"?

      Now nuclear war seeme to be a valid solution to the society that is run by financial companies who run DoS and man in the midle attack on all trade and production, to extract money from everyone.

      I find it remarkable how so much of society doesn't have even a stone age level understanding of trade. You don't enter into a trade because you want to make some financial company rich. You do so to buy or sell something you want or need. As long as you get what you want for the price that you want, it doesn't matter what middle men or DoS gamers are on your market.

      And well, that's how the stock market works. You buy what

  • by gweihir (88907) on Sunday August 05, 2012 @12:25AM (#40883353)

    Look at the effort used in detecting them at this time. This is just a writer with some imagination but no understanding of the facts.

  • by jmerlin (1010641) on Sunday August 05, 2012 @12:43AM (#40883461)
    should involve regulations that limit the rate at which trades can be made or that put a cost on high-frequency trades such as to remove their profit incentives. It's an investment market, we don't need thieves grabbing mismatched buy/sell orders and sitting in the middle shaving pennies off transactions. You know all those movies where someone proposes "rounding" sub-penny transaction losses down to the nearest penny and adding them all to a bank account? Someone on Wall Street saw that and said "bro, we can totally do this lulz! Just give us a way to trade faster than anyone else, and we'll make BILLIONS!" How is this still legal? I mean by every definition this is theft. I, for one, don't want to see us trying to come up with technologies to help these billionaires continue robbing you, me, and everyone else.
    • by shentino (1139071)

      It may not be theft but I'd certainly consider it insider trading.

      The information they use is not available to the general public.

      • by jmerlin (1010641)
        Scalping in HFT is basically the same as someone walking over to your table and picking up the tip left for the restaurant because it's technically more than the bill says you should have paid. I don't care what legal bullshit anyone wants to claim, it's theft. It forces me to pay more for a stock because the difference wasn't refunded, or the seller to eat just the value they were willing to sell at instead of the difference in the event that they found a buyer at a higher rate than expected. Those are
  • It fails to state just how not good we are at detecting neutrinos. If all the matter across the interior of the planet doesn't stop/defelct the neutrino, some little foot long antenna or something isn't going to either. They're not nearly that easily detectable. Let's see...what do I know of that we have right now that already solves this problem? Oh yeah, entangled particles. I think the record is like 10 feet away from each other but if we can get them 15,000 miles away from each other, tada, a delay
  • by khallow (566160) on Sunday August 05, 2012 @01:34AM (#40883717)
    I think there's more mileage to be had from gravity-based communication systems. For example, take the "Mach Lorentz Thruster". It's basically a capacitor that is oscillated back and forth very rapidly with synchronized cycles of charging and discharging.

    The original reason for it was to generate a net thrust by charging the capacity pushing it in one direction, discharging it, and then pushing it back again. This generates a net force since a charged capacitor by relativity has slightly more mass than a discharged capacitor.

    One side effect though is that if you already have a gravity signal of the appropriate frequency, then such an oscillating system can pick up that signal. In other words, the MLT can produce a gravity based signal and pick up a gravity based signal. All in theory, of course. But at least it's progressed to the point where one can generate detectable levels of thrust with it. One could probably generate the gravity signal merely by vibrating a massive weight at the right frequency.

    Now one such MLT acts so I understand a lot like a dipole antenna. I think it should be possible to make a large phased array of these things and have an ability to detect gravity signals of a tuned frequency, more or less what would be wanted for communication. And it should have better gain by a very large amount (like pretty much everything else does) than a corresponding antenna for neutrinos.
    • by physburn (1095481)
      hmm, yes mass and energy are same thing, but that c squared factor means you don't get much gravity per Joule. How much energy have you got in one of those capacitors, yes the electricity moves fast, at the 1/3 c. But if you want a gravity of detectable quantities, i think you'd be better off wiggling a massive object quickly.
      • by Splab (574204)

        Not sure how those suggestions could ever be faster than just using fiber optics going around the surface...

  • Either I don't understand the consequences of a neutrino:nucleon reaction cross-section on the order of 10^-43 m^2, or a technology writer is bafflegabbing.
  • Seriously, why do people need information faster than even the general public can get it?

    This doesn't benefit anyone except HFTers that front run based on insider information.

    This is just a case of parasites inventing a sharper proboscis.

  • the stupid casino will crash and burn before we get to that !
  • by ByteSlicer (735276) on Sunday August 05, 2012 @04:34AM (#40884579)

    With the right modulation scheme, this could be increased by at least one or two orders of magnitude

    Sure. If anyone ever figures out how to modulate a neutrino beam. Now we're having problems already just detecting them.
    I suppose it would be theoretically possible to modulate the accelerator beams, but with the energies involved, I suspect that will be quite a challenge too.
    And then there is the small matter of latency. The neutrino beam may be fast, but the whole process of converting the information stream in a modulated beam, and then analyzing the data at the detectors to find the few neutrinos that didn't come from the sun, will take probably more time than sending the data through fiber optics would.

    • Actually, that's easy, and has been done: http://arxiv.org/abs/1203.2847 [arxiv.org]

      (Full disclosure: I'm an author on that paper)

      Modulation (strictly speaking) isn't required. To make the system work, you only need semi-reliable one-bit fast communication, and slow communication otherwise. On the slow channel:
      "I'll be ready to send a neutrino pulse at 12:00:00.000000"
      "Send me a neutrino bunch at 12:00:00.000000 if it would be profitable to buy "
      Then the beamline simply pulses or doesn't-pulse the beam at that time, de

  • 1. Queue all orders
    2. Delay. 1 second? 2 seconds? Even maybe 5 seconds.
    3. Randomise the queue
    4. Execute all orders
    5. Goto 1

    Kills front running, probably kills HFC. Basically strategy proofs the whole thing. Somebody cryptomath geek can probably finess the protocol some more, but this is the basic plan.

    • How about: 1. Tear down the whole stock market and replace it with something else Surely HFC demonstrates that the stock market has almost no relevance to real world economics, and exists purely as a means for people who are already rich to basically extract rents.
  • Financial trading has always sat at the crossroads between capitalism and gambling. Tying a gigantic roulette wheel to our economy is obviously risky -- and has led to real national disaster on countless occasions. So why do we allow it? Because the capitalists and traders have convinced most of us that free financial markets lead to optimal financial decisionmaking, reward for innovation, and prosperity for all.

    But even if we take as a given, the argument completely falls apart when we're talking about

    • by gl4ss (559668)

      this part of stock market doesn't lead to any financing though.

      since the trades are done on already made investments.

  • Is caused when everyone has their pension money in high frequency neutrino trading, and then a nearby supernova accidentally tells all the traders on the planet to sell everything fast...
  • high-frequency trading is simply a way to take advantage, arbitrage-like, of failures in market-making. sooner or later, market-makers (and clients, for pete's sake!) will realize this, and simply make HF trading irrelevant. OTOH it may take neutrino-based networking for market makers to do this ;)

    besides, if we're looking for exotic physics to leverage, wouldn't entanglement be even better?

  • This kind of technology uptake always starts with the porn industry, and then spreads to others. Wall Street might be second, at best.

It is impossible to travel faster than light, and certainly not desirable, as one's hat keeps blowing off. -- Woody Allen

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