June 3, 2013 | Posted by
The second part of this episode of Radiolab talks about the importance of nanoseconds when it comes to profitably making trades. The importance of this small difference led to a land grab as traders tried to get as close to the NYSE’s physical trading floor, since each foot of fiber optic cable between the trader and the floor added about a nanosecond. The Exchange’s solution was to rent server space in the market. Each server is then connected to the floor by an identical length of cable. The segment also makes clear that the stock market is not just an ephemeral thing, but has a mostly ignored, but vital, material component.
The segment begins at around the 21 minute mark.