Where Physics Meets Finance
Pioneering research into the fundamental physical constraints that shape modern financial markets
The Space Finance Institute is a research organization dedicated to exploring the intersection of physics, technology, and financial markets. We investigate how fundamental physical laws—particularly the finite speed of light—impact the structure, efficiency, and fairness of global financial systems.
As markets become increasingly automated and globally distributed, understanding these physical constraints becomes critical for market design, regulation, and technological innovation. Our work bridges theoretical physics, financial economics, and market microstructure to address questions that are becoming increasingly relevant in the age of high-frequency trading and global financial networks.
Rigorous academic inquiry into physical constraints in finance
Informing market design and regulatory frameworks
Advancing understanding of market infrastructure
Our interdisciplinary research program examines the physical foundations of financial markets through multiple lenses:
Analyzing how the finite speed of light creates fundamental limits on market synchronization, arbitrage opportunities, and information propagation across global exchanges.
Investigating how physical latency affects price discovery, liquidity provision, and the competitive dynamics of high-frequency trading strategies.
Examining spatial aspects of market efficiency and how physical distance creates persistent arbitrage opportunities that cannot be eliminated.
Exploring how physics-based market constraints should inform regulatory frameworks, fairness standards, and market access policies.
Developing frameworks for next-generation market infrastructure that explicitly accounts for physical and technological limitations.
This paper examines the fundamental physical constraints imposed by the speed of light on financial market operations. As markets become increasingly automated and geographically distributed, the finite speed at which information can travel becomes a critical factor in market microstructure, arbitrage opportunities, and regulatory frameworks.
We demonstrate that light-speed constraints create unavoidable latency differentials between market participants based on their physical location, analyze the implications for market fairness and efficiency, and propose regulatory frameworks that explicitly account for these physical realities.
Download PDF →The Space Finance Institute welcomes collaboration, dialogue, and engagement from researchers, industry practitioners, regulators, and anyone interested in the physical foundations of financial markets.
Partner with us on interdisciplinary research projects exploring the intersection of physics, technology, and finance.
Invite our researchers to speak at conferences, workshops, or provide expert consultation on market infrastructure and physics-based constraints.
Contact us for commentary on market structure, high-frequency trading, and the role of technology in modern financial systems.
For all inquiries, please reach out via the contact information provided in our publications or connect with us through professional networks.