[kqr]

Can you provide a source to this statement? The redundancy needed to transmit at desirable reliability with 50 % packet loss would, I imagine, very quickly eat into any millisecond gains -- even with theoretically optimal coding.

Someone more familiar with Shannon than I could probably quickly back-of-the-napkin this.

[hylaride]

Financial companies have taken and upgraded/invested in microwave links because they can be comparatively economical to get "as the crow flies" distances between sites:

https://www.latimes.com/business/la-fi-high-speed-trading-20...

https://arstechnica.com/information-technology/2016/11/priva...

https://en.wikipedia.org/wiki/TD-2#Reemergence

I'm not sure about the high packet loss statement, but it wouldn't suprise me that it's true if the latency is lower enough to get to take advantage of arbitrage opportunities often enough to justify the cost.

[londons_explore]

Traders wouldn't use redundancy etc. Whenever a packet with info arrives, they would trade on that info (eg. "$MSFT stock is about to go down, so buy before it drops!"). If there is packet loss, then some info is lost, and therefore some profitable trading opportunities are missed. But thats okay.

There are thousands of such opportunities each second - they can come from consumer 'order flow' - ie. information that someone would like to buy a stock tells you the price will slightly rise, so go buy ahead of them and sell after them in some remote location.

[sandworm101]

There is also a market for stocks that trade on different exchanges, resulting in fleeting differences in price between exchanges. Those who learn of price moves first can take advantage of such differences. In such cases, all you need to transmit is the current stock price. The local machine can then decide to buy or sell.