Stock Trading: The Race to Zero

Between the NYSE data center in Mahwah, N.J., and the Nasdaq center 35 miles away, lasers are now deployed strategically atop office and apartment buildings. They're the first wave of a network patterned after U.S. Air Force aerial communications. As the WSJ explains, it's all about high-frequency trading:

It is the latest salvo in the "race to zero," traders' term for their efforts to whittle away the difference between the speed their orders travel at and the speed of light. Zero, the point at which that difference would disappear, has become a kind of holy grail to computerized traders, for whom nanoseconds—billionths of a second—can spell the difference between profit and loss in their algorithm-driven trades.

For a briefing on how high-frequency trading came to be, see the Deal Professor. Before 2007 stocks generally traded on The New York Stock Exchange or Nasdaq. Then the SEC changed the trading rules. Current result: 13 public stock exchanges and 45 "dark pools" where most trades for long-term investors are made.

 The race to zero must be lucrative, but couldn't grown men and their algorithms find more constructive work?