High frequency trading isn't the mystery that it used to be. Take for example the "secret" location of the NYSE Euronext data center. It's right there on the left in the photo that looks like a printed circuit board. This huge facility sits next to the MacArthur Boulevard in Mahwah, New Jersey. It's function is to provide colocation space for traders seeking low latency access to the exchange's servers. This allows traders to take advantage of that extra milli- or micro-second to skim a cent or two on each trade. A few hundred thousand successful trades per day produces a lot of pennies.
The photo was most likely taken by someone standing atop a very large rainforest tree, most likely a Kapok; or it was taken from the Starship Enterprise. The latter makes more sense because if you are from Planet Mahwah and have seen this facility, you know that the area is not favorable for growing Kapoks.
Knowing the involvement of Starfleet Command, the final piece of the puzzle is now in place. To find the source of this potentially dangerous algorithm stew, you will have to look skyward, past the Earthly quants and market think-tankers. Let's go back to the future and revisit a note-worthy date in history....
Stardate 5710.5: The Enterprise has been invaded by Queen Deela of Planet Scalos. A volcanic eruption has resulted in massive death, caused infertility in the male Scalosians, and has hyper-accelerated the remaining population. This means that Deela moves really fast, (measured in micro-seconds). No one on the ship can see her; they hear only a strange buzzing occasionally.
Her mission is to use the Enterprise crew as genetic stock to rebuild the population. The Queen drugs Captain Kirk so that both of them are now in a hyper-accelerated state. The crew can be seen by Kirk, but relative to his speed, they seem as though they are not moving. The devious, and desperate Queen Deela chooses Kirk as her consort.
Interesting side note: It's not lost on a monkey that this is the only Star Trek episode where Kirk has 'relations' with an alien. The talented writers of the show no doubt took advantage of this opportunity to 'suggest' to the viewer, if you read between the lines, that Kirk's 'performance' would of had to be measured in micro-seconds. Good one guys.
Spock eventually catches on to what is happening, hyper-accelerates himself and together with Captain Kirk, sends Deela back to her planet.
What does this brief moment in history have to do with high frequency trading? True, hell has no fury like a woman scorned but that is just 'surface chatter'. Queen Deela was no doubt contacted and eventually hired by a certain global investment banking and securities firm. Her hyper-accelerated skill set was just what was needed to provide continued massive wealth generation without the risk.
Thanks to Queen Deela, the cyber wars between competing algorithms within the walls of this and other future data centers, have only just begun. These programs will soon do far more than just issue and cancel orders, take the profit, and disappear without a trace. Stay tuned.
Ed Note: It may appear that Sigmund is a die-hard Trekkie but this is not the case. Anyone knows that Captain Kirk's photon torpedo is no match for Batman's shark repellent.
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