The practice of co-location, whereby firms deploying extremely high-speed trading strategies locate their server next to that of the exchange or trading venue, is nothing new. But according to research published last month, high frequency trading firms looking to shave every last micro-second off their trading speed ought to co-locate their servers in the wastes of the Antarctic or the middle of the Atlantic ocean.

The research paper Relativistic Statistical Arbitrage, which was published in science journal the Physical Review in November, explores how high-frequency trading firms -- which deploy trading strategies that are dependent on routing trading information around the world and across multiple exchanges and trading venues at sub-micro second speeds -- can optimise their trading infrastructure and trade even faster.