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HFT Microwave Tower Latency Arbitrage.

Models the extreme capital expenditure of building custom microwave transmission towers between Chicago and New Jersey to shave 3 milliseconds off trading algorithms.

## The Speed of Light Tax

When a futures contract price changes in Chicago, that information travels down a fiber optic cable to the stock exchanges in New Jersey. Light travels slower through glass than it does through the air.

### FAQ

**Q: Why did Wall Street firms spend $300 Million buying land in Pennsylvania to build radio towers?**
A: 4.6 Milliseconds. A straight-line microwave tower network can shoot data through the air faster than a fiber optic cable can carry it underground. If an HFT firm knows the price of a stock in Chicago 4.6 milliseconds faster than the public market in New York, their algorithms can buy the stock available in NY at the old price, wait 4.6 milliseconds for the market to update, and instantly sell it for a guaranteed, risk-free profit. Making 4 pennies of profit on 250,000 trades a day generates $10,000 in pure cash every 24 hours. The entire $300M infrastructure project pays for itself through pure mathematical front-running.