New Scientist - USA (2019-07-13)

30 | New Scientist | 13 July 2019

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IT IS 2011, a couple of years after

the Great Recession. Quantitative

analyst Vincent (Jesse Eisenberg)

and his programmer cousin Anton

(Alexander Skarsgård) have found

a way to steal a march on Wall

Street: trading a millisecond

ahead of the competition.

Where will they find this tiny,

telling pinch of extra time? They

plan to make it themselves, by

stretching an optical fibre from

Kansas City Internet Exchange

to New York in as straight a line

as possible. While everyone else

waits 17 milliseconds for their

information (the beat of a

hummingbird’s wing is the film’s

poetic, and accurate enough,

conceit), Vincent, Anton and their

backers will only have to wait 16

milliseconds. That’s time enough

to squeeze in a few thousand

algorithmically generated trades.

The trick will be to lay the cable

as straight as the law allows. Never

mind Amish farms, Appalachian

mountain ranges, loneliness,

obsession or physical frailty. They

will build this 1600-kilometre-

long, 10-centimetre-wide fibre

tunnel if it kills them.

Scripted and filmed like a true-

life story (after all, who in their

right mind would make up a

thriller about high-frequency

trading infrastructures?) The

Hummingbird Project, incredibly,

springs entirely from the head of

writer-director Kim Nguyen. It

can’t quite decide whether to be a

think piece or a buddy movie, but

it can be staggeringly funny. Salma

Hayek has indecent amounts of

fun as Eva, the cousins’ abandoned

boss. In a frantic attempt to keep

them on her payroll, at one point

she shouts: “I think we can break

the walls of perception together!”

It is one of those stories that, in

being made up, encapsulates a lot

of historical and technical insight.

Hayek’s Eva can talk “nanosecond

financial engineering” all she

wants. As a sceptical investor

notes, her style of trading is really

An American dream A drama about two cousins setting out to get seriously rich

by building a 1600-kilometre-long optical fibre link between New York and Kansas

is both funny and fascinating, says Simon Ings

“ Do you recall when it

took a microsecond to

win or lose a fortune?

What slowcoaches we

were, eight years ago”

Film

The Hummingbird

Project

Written and directed

by Kim Nguyen

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Jesse Eisenberg plays

Facebook’s founder Mark

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superlative tech just-so story.

The Big Short

Directed by Adam McKay

A meticulous takedown of

Wall Street with Steve Carell

and Christian Bale.

just scalping: profiting off small,

short-lived price anomalies

between financial exchanges.

Scalping is hard because one

hefty loss wipes out millions of

tiny profitable trades. And it is

also impossible to do without

computers because markets adjust

quicker than the eye can follow.

When world markets crashed in

2008, this took a lot of the heat. It

was easier for politicians to point

the finger at runaway tech and

artificially accelerated trading

than to challenge and dismantle

key institutions. But while trading

algorithms have caused the odd

“flash crash”, they do far more to

sustain a market economy than

to threaten it. This is why so-called

mechanical arbitrage runs over

half the trades in many markets.

Vincent and Anton’s project is

entirely reasonable in a world that

puts commercial operations as

close to market exchanges as

possible to steal millisecond

advantages over competitors.

Hanging over the cousins’ project

is a rival bid to leave fibre behind

and send financial information by

microwave (and the discussion of

“pulse-shaping algorithms” will

warm the heart of any telecoms

engineer). Today, the industry is

even more complex, with atomic

clocks to arbitrate the timing of

financial information. Financial

instruments that scalp multiple

markets are driving the creation

of strategic data centres in unlikely

places, as banks head for space

via Elon Musk’s Starlink servers.

All of which gives the film a

curiously nostalgic feel. Do you

recall when it took a thousandth

of a second to win or lose a

fortune? What slowcoaches

we were, eight years ago. ❚

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Jesse Eisenberg and

Alexander Skarsgård star

as cousins with a plan

The science of film

Simon Ings is a novelist and

science writer and a culture

editor at New Scientist.

Follow him on Instagram

@simon_ings