Research papers and working papers from the Space Finance Institute
This paper examines the fundamental physical constraints imposed by the speed of light on financial market operations, high-frequency trading, and global market synchronization. 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. These differentials have profound implications for market fairness, efficiency, and design. We analyze empirical data on cross-exchange arbitrage, develop theoretical models of latency-constrained markets, and propose regulatory frameworks that explicitly account for these physical realities.
Our findings suggest that current market structures may systematically advantage certain participants in ways that cannot be eliminated through technological improvement alone, requiring fundamental rethinking of market design and regulation.
Current research projects and papers in development at the Space Finance Institute.
Analyzing how physical distance creates persistent arbitrage opportunities between futures exchanges trading identical contracts.
Developing policy recommendations for how financial regulators should account for fundamental physical constraints in market access and fairness standards.
Shorter pieces exploring specific aspects of physical constraints in finance, responses to current events, and preliminary findings.
We plan to publish research notes and commentary on current developments in market microstructure, technology, and regulation as they relate to our core research themes.
If you cite our research, please use the following format:
Cheah. (2025). When Light Speed Matters: Physical Constraints in Modern Markets. Pre-release v1.0. Available at: https://spacefinance.institute/papers/When_Light_Speed_Matters_Cheah_v1.0_PreRelease_2025-10-21.pdf
BibTeX format:
@techreport{cheah2025lightspeed,
title={When Light Speed Matters: Physical Constraints in Modern Markets},
author={Cheah},
year={2025},
month={October},
note={Pre-release version 1.0},
institution={Space Finance Institute},
url={https://spacefinance.institute/papers/When_Light_Speed_Matters_Cheah_v1.0_PreRelease_2025-10-21.pdf}
}
Interested in receiving updates about new publications, working papers, and research findings? We're developing a newsletter to keep the research community and interested practitioners informed about our latest work.
For now, follow our publications on SSRN or check back regularly for updates. You can also reach out via our contact page to be added to our mailing list.