Teleportation is real and it’s going to disrupt banking

Last month scientists in Calgary teleported information 8.2 kilometres using quantum entanglement. They made a tiny piece of information travel faster than the speed of light. And in the high frequency trading world of investment banking, the speed of light is becoming a problem.

Algorithmic trading means the firms that can react fastest to market information make the greatest profits. The time between an event happening and the algorithm responding is called latency. Latency is measured in very low numbers. 1 millisecond of latency is equal to $100m of lost profit per year.

I found milliseconds easiest to understand as distance. If information travelled at the speed of light (which it doesn’t and probably never could through our current infrastructure) then you lose a millisecond of latency for every hundred miles you are from the exchange. To put it another way New York is 36 milliseconds away from the City.

That’s why the biggest banks buy up property close to the major stock exchanges and fill them with servers. No matter how good your start up’s software is, you can’t beat proximity. Deutche Bank’s latency is around the 1.25 microsecond mark. A microsecond is equivalent to 984 feet (thank you Grace Hopper).

Quantum Teleportation’s promise is information exchange with zero latency. This means that anyone, anywhere could trade with parity with the big banks and that the financial centres of New York, London and Singapore could be challenged by technical innovation anywhere in the world.

If you’re wondering why I’m interested — banking is not usually my sphere — 3 years ago I researched quantum entanglement and low latency trading while writing a sci-fi thriller screenplay titled Q.E.D, which if anyone’s interested in reading, is here.