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Article

Transmission of Trading Orders through Communication Line with Relativistic Delay

1
Anglo-American University, Letenská 120/5, 118 00 Malá Strana, Czech Republic
2
Device Consultants, LLC, Woodland Drive, State College, PA 16804, USA
Int. J. Financial Stud. 2021, 9(1), 12; https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010012
Received: 11 January 2021 / Revised: 13 February 2021 / Accepted: 18 February 2021 / Published: 26 February 2021
(This article belongs to the Special Issue Econophysics Applications to Financial Markets Ⅱ)
The notion of “relativistic finance” became ingrained in the public imagination and has been asserted in many mass-media reports. However, despite an observed drive of the most reputable Wall Street firms to establish their servers ever closer to the trading hubs, there is surprisingly little concrete information related to the relativistic delay of the trading orders. There is an underlying assumption that faster electronics are always beneficial to the stability of the network. In this paper, the author proposes a modified M/M/G queue theory to describe the propagation of the trading signal with finite velocity. Based on this theory, we demonstrate that, even if the reaction time of the system is negligible, the propagating signal is distorted by simple acts of trading along the transmission line. View Full-Text
Keywords: network dynamics; high-frequency trading; signal processing; relativistic delay; queue theory network dynamics; high-frequency trading; signal processing; relativistic delay; queue theory
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MDPI and ACS Style

Lerner, P.B. Transmission of Trading Orders through Communication Line with Relativistic Delay. Int. J. Financial Stud. 2021, 9, 12. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010012

AMA Style

Lerner PB. Transmission of Trading Orders through Communication Line with Relativistic Delay. International Journal of Financial Studies. 2021; 9(1):12. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010012

Chicago/Turabian Style

Lerner, Peter B. 2021. "Transmission of Trading Orders through Communication Line with Relativistic Delay" International Journal of Financial Studies 9, no. 1: 12. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010012

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