Co-location

The fastest way to decrease the time it takes to get from point A to point B is, intuitively, to reduce the distance between the two points. High frequency trading firms recognized this and paid massive amounts of money to the NYSE or NASDAQ stock exchanges in order to situate their computers in the same physical room as the exchanges’ computers. While some may consider this establishing a competitive advantage, Lewis more candidly describes it as bribery. This is the first technological advancement that HFT firms sought in order to illegally front-run average investors within the digitalized stock market.