2014/01/13 by James J. Angel, Angel, James J. · 1 citation
Economics, Econometrics and Finance · #Complex Systems and Time Series Analysis #Economic theories and models #FOS: Economics and business #Financial Markets and Investment Strategies #Trading and Market Microstructure (q-fin.TR)
paper · pdf · doi:10.48550/arxiv.1401.2982
openalex publication_date 2014/01/13 · openalex created_date 2022/08/06 · openalex updated_date 2026/07/28
Modern physics has demonstrated that matter behaves very differently as it\napproaches the speed of light. This paper explores the implications of modern\nphysics to the operation and regulation of financial markets. Information\ncannot move faster than the speed of light. The geographic separation of market\ncenters means that relativistic considerations need to be taken into account in\nthe regulation of markets. Observers in different locations may simultaneously\nobserve different best prices. Regulators may not be able to determine which\ntransactions occurred first, leading to problems with best execution and\ntrade-through rules. Catastrophic software glitches can quantum tunnel through\nseemingly impregnable quality control procedures.\n