It’s almost unimaginable in this age of fiber optic lines, satellite transmissions and wireless everything that physical space can still present barriers to competition. But in the race to place trades in low latency/ high frequency environments, the ability to shave 115 miles off the journey information must travel from Chicago to New York, it would save two milliseconds from the round trip and place a high frequency firm at a huge advantage over its competition.

Don’t worry if none of this sounds familiar. The methods for reducing latency are still as cloaked in secrecy today as they were in Napoleonic times when bankers Francois and Joseph Blanc bribed operators of Claude Chappe’s 1793 invention, the semaphore telegraph, to tip them as to whether the Paris Bourse was trading up or down. By the time they were caught, in 1834, the brothers had made a bundle. They had simply to note whether packages arriving by coach from Paris to Bordeaux were wrapped in gray or white paper, and instantly they’d knew whether to buy or sell their shares — nearly a day before the papers could carry the news. Today, latency secrets are more confined to who has the best equipment or where the best unused telecommunication lines are, than unpublished market news.

The hidden weapons of big name hedge funds and proprietary trading desks at mainly sellside firms are closely guarded, says Kevin McPartland, an analyst with the Tabb Group, and author of “Long-Distance Latency: Straightest and Fastest Equals Profit” (June 2010). For the past decade, firms have pursued a combination of sophisticated trading technology and faster networks in a race to the top. Still, up until this year’s Flash Crash, the public was largely unaware. “With things calming down in equities, the topic’s been brought to the top of people’s minds,” says McPartland.

“Ten years ago firms would rely on telecom providers to advise them,” he says. Now the same firms are hiring away those experts to get the jump on the competition and also ensure it won’t figure out their strategy. Telecom experts are paid well for their closed-mouth discretion, sources tell us. Also fueling the need for secrecy is that although “there’s tons of connectivity,” as McPartland says, there is “very little in the fastest” modes. One reason is that between trading centers such as New York to Chicago and London to Frankfurt, there are many places where lines can’t be dug — through mountains, across rivers, under churches, for example.