Dark Pools
The Rise of the Machine Traders and the Rigging of the U.S. Stock Market
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4.2 • 9 Ratings
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- $11.99
Publisher Description
A news-breaking account of the global stock market's subterranean battles, Dark Pools portrays the rise of the "bots"--artificially intelligent systems that execute trades in milliseconds and use the cover of darkness to out-maneuver the humans who've created them.
In the beginning was Josh Levine, an idealistic programming genius who dreamed of wresting control of the market from the big exchanges that, again and again, gave the giant institutions an advantage over the little guy. Levine created a computerized trading hub named Island where small traders swapped stocks, and over time his invention morphed into a global electronic stock market that sent trillions in capital through a vast jungle of fiber-optic cables.
By then, the market that Levine had sought to fix had turned upside down, birthing secretive exchanges called dark pools and a new species of trading machines that could think, and that seemed, ominously, to be slipping the control of their human masters.
Dark Pools is the fascinating story of how global markets have been hijacked by trading robots--many so self-directed that humans can't predict what they'll do next.
Customer Reviews
A fascinating dive into high-frequency trading and market making
How did it come to be that a small handful of companies like Citadel Securities are able to leverage technology to make super fast decisions about where stock prices are going, moving in and out of positions in fractions of a second?
In Dark Pools, the sequel to the New York Times bestseller The Quants, Wall Street Journal reporter Scott Patterson dives into the early days of the world of high-frequency trading and market making. He profiles numerous traders behind the scenes who worked to upend the establishment and set the stage for the dominance of HFT today. One of those traders is Dave Cummings, founder of Tradebot and BATS Global Markets (acquired by Cboe Global Markets).
The pioneers in Patterson’s book were early in recognizing the profound impact their inventions would have on the stock market in the years to come. Retail investors are now able to buy and sell stocks commission free because of a controversial practice known as payment-for-order flow in which their orders are routed by brokers such as Robinhood, Webull, Charles Schwab, E-Trade and TD Ameritrade to HFT firms such as the aforementioned Citadel Securities to fill. Indeed the era of high-frequency traders has ramifications for all investors.
A compelling and insightful story
I'm just a retiree managing my own investments, but am always inquisitive about the way the markets work in the hopes of improving the odds of making good investments. This book provides just the kind of "behind the scenes" look at the inner workings of the stock market that i have been looking for.