Communication Strategies for Low-Latency Trading

The possibility of latency arbitrage in financial markets has led to the deployment of high-speed communication links between distant financial centers. These links are noisy and so there is a need for coding. In this paper, we develop a gametheoretic model of trading behavior where two traders compete to capture latency arbitrage opportunities using binary signalling. Different coding schemes are strategies that trade off between reliability and latency. When one trader has a better channel, the second trader should not compete. With statistically identical channels, we find there are two different regimes of channel noise for which: there is a unique Nash equilibrium yielding ties; and there are two Nash equilibria with different winners.Comment: Will appear in IEEE International Symposium on Information Theory (ISIT), 201

Coding and Decoding Schemes for MSE and Image Transmission

In this work we explore possibilities for coding and decoding tailor-made for mean squared error evaluation of error in contexts such as image transmission. To do so, we introduce a loss function that expresses the overall performance of a coding and decoding scheme for discrete channels and that exchanges the usual goal of minimizing the error probability to that of minimizing the expected loss. In this environment we explore the possibilities of using ordered decoders to create a message-wise unequal error protection (UEP), where the most valuable information is protected by placing in its proximity information words that differ by a small valued error. We give explicit examples, using scale-of-gray images, including small-scale performance analysis and visual simulations for the BSMC.Comment: Submitted to IEEE Transactions on Information Theor

On Optimal Finite-length Binary Codes of Four Codewords for Binary Symmetric Channels

Finite-length binary codes of four codewords are studied for memoryless binary symmetric channels (BSCs) with the maximum likelihood decoding. For any block-length, best linear codes of four codewords have been explicitly characterized, but whether linear codes are better than nonlinear codes or not is unknown in general. In this paper, we show that for any block-length, there exists an optimal code of four codewords that is either linear or in a subset of nonlinear codes, called Class-I codes. Based on the analysis of Class-I codes, we derive sufficient conditions such that linear codes are optimal. For block-length less than or equal to 8, our analytical results show that linear codes are optimal. For block-length up to 300, numerical evaluations show that linear codes are optimal.Comment: accepted by ISITA 202