In the hyper-competitive world of high-frequency trading (HFT), where fortunes are made in fractions of a second, a new battlefront has opened over an advantage so small it is almost unimaginable: 3.2 billionths of a second. A fierce dispute has erupted at one of the world's largest futures exchanges, Eurex, exposing how traders are now fighting over nanosecond edges, a million times faster than the millisecond races of the past.
The Nanosecond Arms Race
The controversy centres on an obscure technical tactic. According to complaints from French trading firm Mosaic Finance, some high-speed traders have been bombarding the Frankfurt-based Eurex exchange with useless or deliberately corrupted data packets. The objective is not to trade, but to keep their electronic connections to the exchange's servers permanently "warm." This allows them to shave off roughly 3.2 nanoseconds when they finally do send a real buy or sell order, granting them a first-mover advantage over competitors.
Hugues Morin, founder of Mosaic Finance, which has filed a formal complaint with Eurex and European regulators, frames it as an unfair arms race. "An arms race is OK, but you must use legal weapons," Morin stated. Mosaic claims its own high-speed trading profits on Eurex plummeted by 90% in 2022 after rivals began employing this method, which it calls "Corrupted Speculative Triggering" (CST).
How a 3.2 Nanosecond Edge Translates to Millions
In algorithmic trading, speed is everything. Firms use complex algorithms to capture fleeting price differences between related assets. For instance, if futures for the Euro Stoxx 50 index rise, contracts for Germany's DAX index typically follow. The firm that reacts first—even by a few nanoseconds—can buy the DAX futures before they tick up and sell them at a profit instantly.
The CST technique exploits how data travels. Orders on Eurex are sent in small data packets. Each packet begins with a standard "preamble" signal, followed by the actual trade instruction. Traders using CST send the preamble in advance. If market-moving information arrives, they can instantly fill the rest of the packet with a trade order. If no opportunity arises, they send a meaningless or garbled packet to keep the line open. This pre-emptive move saves those precious nanoseconds.
Mosaic alleges that a small group of firms using this practice has raked in up to 600 million euros (nearly $700 million) in profits over three years. Eurex, meanwhile, is said to have boosted its revenue by charging these firms for ultra-fast data connections.
Exchange Response and the Regulatory Gray Area
Eurex, which is part of Germany's Deutsche Börse, has firmly rejected Mosaic's allegations. A spokeswoman said the claims are "unfounded" and that all issues raised have been repeatedly reviewed without merit. The exchange stated it enforces its rules and has tools to detect malformed data.
However, in a move that some see as an indirect response, Eurex announced a major systems upgrade on December 8, 2025. The overhaul, set to take effect in April, is expected by many traders to curtail or even end the CST practice. Other market participants view the tactic as operating in a regulatory gray area—not explicitly illegal but potentially anti-competitive.
The cat-and-mouse game is evident. Brandon Richardson, founder of Chicago-based Emergent Trading, admitted his firm uses a variant of the technique to gain a nanosecond edge. He said Eurex once detected and stopped his specific method, while other traders' variations continued to work. "They could detect my trick, but not other people's tricks," Richardson noted, arguing the practice is well-known and permissible.
People familiar with the matter also indicated that Optiver, a major Netherlands-based global trading firm, has engaged in similar strategies. Optiver declined to comment. The European Commission has also declined to comment on the complaint.
The Relentless Quest for Speed Continues
This nanosecond skirmish is the latest chapter in a decades-long evolution. In the 2000s, firms invested millions in microwave antenna networks between financial hubs like Chicago and New York to gain millisecond advantages. Today, the battle has shifted to nanoseconds—six orders of magnitude faster. A nanosecond is the time it takes for light to travel just about one foot.
While Eurex's upcoming upgrade may close this particular loophole, the financial industry has little doubt that the world's secretive high-frequency trading firms will continue their relentless quest, searching for the next microscopic hack to gain an edge in the endless race for speed and profit.
