[namwen]

Wasn't this mostly stopped in NY when the Exchange set up a server building and allowed firms equal access? They had been buying up the real estate around the exchange for amounts much high than the property's value and it was becoming a bit of a problem. Now they are all in the same building and everyone has the exact same amount of cable running from their server to the exchange.

[evanb]

This move halted the land rush around the fiber access points in New York. But suppose a firm trades both on the NYSE and CHX in Chicago. If there's a price difference on the same stock in the two exchanges, you can buy low and sell high for a brief period (a few ms): if your machines in the NYSE building and CHX building can communicate that price difference faster than anybody else, nobody knows there's a discrepancy to be taken advantage of.

[stumm]

Changes in commodities prices in Chicago will have "known" affects on stock prices in NYC. If you can get the information between the two cities faster, then despite this equal access in the last leg you can still take advantage of knowing before the others.