The Ansibles are coming! The Ansibles are coming!

[NoXion]

On the "Unintended Consequences" section of the Atomic Rocket's page on Respecting Science, one of the examples given is "there will be a global stock market crash, since high-frequency trading strategies depend upon speed-of-light delays", which would be an unintended consequence of the introduction of instantaneous communications technology, or ansibles.

My question is this; given five, ten, or twenty years warning, would it be possible for market-based economies to prepare for the anticipated development of such a technology? Could the economic blow be cushioned completely, partially, or not at all?

[Ted C]

High-profile stock exchanges would probably be among the first adopters anywhere that the distances were sufficient for it to matter.

The effects of ansible communication networks on a civilization are major plot points in Elizabeth Moon's Vatta's War series.

[B5B7]

If the high-frequency trading strategies are affectable, it can be only if they are totally automated, because slowness of human reaction speeds make signal speed difference irrelevant.
Just how much of global stock market is this type of totally automated trading? How "accurate" is this trading -- ie will decision speed differentials be sufficient to have a real measurable effect?
If this automatic trading is so supreme, could this be indicative of a fundamental flaw in the financial system?
Experiments have been done that show completely random trade strategies are overall more profitable than human decisions - of course, this refers to standard shares trading.

[Simon_Jester]

If the high-frequency trading strategies are affectable, it can be only if they are totally automated

They are.

Just how much of global stock market is this type of totally automated trading?

Most.

How "accurate" is this trading -- ie will decision speed differentials be sufficient to have a real measurable effect?

Yes.

If this automatic trading is so supreme, could this be indicative of a fundamental flaw in the financial system?

Probab- [is mugged by Wall Street agents]

Experiments have been done that show completely random trade strategies are overall more profitable than human decisions - of course, this refers to standard shares trading.

Well, no wonder, given that superfast automatic robots are out there swimming through the market like sharks through the sea. Trying to be a predator doesn't work too well, when you're a tuna fish and there are sharks around.

[Vendetta]

At this point you should go and read Charles Stross' recent book Neptune's Brood, which is basically about this sort of thing (or rather: The effect on the financial structure of a hard SF universe of the potential discovery of FTL travel).

[Patroklos]

I think I am missing something here. I realize that current global communications are not instantaneous but to the human there are methods that seem so for all intents and purposes. I get that machines can percieve those delays and capitalize on them far better than the mark I human, but surely we are continually speeding up communications and a machines ability to act on them more quickly constantly. I guess what I am saying is that would there really be an actionable difference between a machine reacting to an instantaneous ansible communication from Alpha Centari to Earth vice Boston to New York via fiber optic? Isn't the limiting factor at this point the ability of the machine acting on the communication?

Even if one chain could act slightly faster than the next, how is this different than now? Given the same imputs at the same time different human stock brokers and more importantly automated systems will still beat each other in response time.

[Starglider]

That is bullshit written by someone with no knowledge of algo trading. Comma latency is only one of many sources of latency, frequently not the dominating one.