How the Speed of a Trade Got Down to Nearly the Speed of Light – Odd Lots

How the Speed of a Trade Got Down to Nearly the Speed of Light – Odd Lots — Transcript

Market views

Bullish

HFT— High-frequency trading firms continue to have competitive advantages over banks due to their agile structure and ability to quickly adopt new technology, with the speed race continuing despite physical limitations.
MARKETMAKING— Market making firms provide essential liquidity to markets by populating order books, which is viewed as beneficial for market structure and continues to be profitable.
AIMODELS— Despite diminishing returns, massive capital continues flowing into AI infrastructure as firms cannot afford to fall behind in the AI arms race.

Bearish

TRADFI— Traditional banks are structurally disadvantaged in electronic trading due to bureaucratic IT departments and slow decision-making processes that prevent them from competing with nimble HFT firms.
LATENCY— The speed race in trading is reaching diminishing returns as firms approach physical limits like the speed of light, with the rate of improvement slowing down due to economic constraints.

Not investment advice.