The multi-billion dollar race for faster trading is mostly just fighting over a software glitch.
April 16, 2026
Original Paper
Random Queue Priority in Continuous Limit Order Books:Evidence from a Large-Scale Controlled Simulation
SSRN · 6574208
The Takeaway
High-frequency traders spend fortunes on microwave towers and fiber optics to shave microseconds off their speed, assuming it makes the market more efficient. However, over a third of that speed advantage is just a mechanical quirk of the 'first-come, first-served' rule used by exchanges. It’s a massive arms race for a prize that only exists because of how the exchange's software queues orders, not because of better market intelligence. For the average investor, this means billions of dollars are being burned on technology that doesn't actually help find better prices—it just wins a line-standing contest. It reveals that the heart of modern finance is less about 'smart money' and more about an expensive, unnecessary race to the front of a line.
From the abstract
Standard measures of execution quality in financial markets are not mechanism-neutral. Under thecontinuous limit order book (CLOB), queue position is allocated by arrival time, embedding asystematic transfer from slower to faster participants into commonly used metrics such as slippage.We isolate this bias using a controlled dual-engine exchange in which identical order flow isprocessed simultaneously under price-time priority and randomized queue priority. The gap inexecution quality between fa