IDEAS home Printed from
   My bibliography  Save this paper

When Finance Meets Physics: The Impact of the Speed of Light on Financial Markets and their Regulation


  • James J. Angel


Modern physics has demonstrated that matter behaves very differently as it approaches the speed of light. This paper explores the implications of modern physics to the operation and regulation of financial markets. Information cannot move faster than the speed of light. The geographic separation of market centers means that relativistic considerations need to be taken into account in the regulation of markets. Observers in different locations may simultaneously observe different best prices. Regulators may not be able to determine which transactions occurred first, leading to problems with best execution and trade-through rules. Catastrophic software glitches can quantum tunnel through seemingly impregnable quality control procedures.

Suggested Citation

  • James J. Angel, 2014. "When Finance Meets Physics: The Impact of the Speed of Light on Financial Markets and their Regulation," Papers 1401.2982,
  • Handle: RePEc:arx:papers:1401.2982

    Download full text from publisher

    File URL:
    File Function: Latest version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Emiliano S. Pagnotta & Thomas Philippon, 2018. "Competing on Speed," Econometrica, Econometric Society, vol. 86(3), pages 1067-1115, May.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. repec:kap:jbuset:v:147:y:2018:i:4:d:10.1007_s10551-016-3391-4 is not listed on IDEAS
    2. repec:gam:jjrfmx:v:11:y:2018:i:4:p:73-:d:178877 is not listed on IDEAS
    3. Brian F. Tivnan & David Slater & James R. Thompson & Tobin A. Bergen-Hill & Carl D. Burke & Shaun M. Brady & Matthew T. K. Koehler & Matthew T. McMahon & Brendan F. Tivnan & Jason Veneman, 2018. "Price Discovery and the Accuracy of Consolidated Data Feeds in the U.S. Equity Markets," Papers 1810.11091,
    4. Craig W. Holden & Stacey Jacobsen & Avanidhar Subrahmanyam, 2014. "The Empirical Analysis of Liquidity," Foundations and Trends(R) in Finance, now publishers, vol. 8(4), pages 263-365, December.
    5. repec:taf:quantf:v:16:y:2016:i:10:p:1541-1558 is not listed on IDEAS

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:1401.2982. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (arXiv administrators). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.