Scott Patterson: Dark Pools, Kartoniert / Broschiert

Kurzbeschreibung

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.

Rezension

"Far more comprehensive and persuasive [than even Michael Lewis' Flashboys ]."
--James Stewart, New York Times Book Review

"An excellent history of the early electronic traders" - Michael Lewis

"Scott Patterson's Dark Pools is about the most important financial issue no one talks about - how high-frequency traders have rigged the market."
--Mark Cuban

"Remarkable...even long-time participants in electronic markets will learn a lot from this book."
--Forbes

"Richly reported...an invaluable piece of timely journalism that should be read by regulators and anyone with a cent in the stock market...You will never look at the opening bell in the same way."
--Financial Times

"An engaging narrative... DARK POOLS is easily the most entertaining and accessible book to cover the new world of stock trading ."
--Fortune

"An education in how markets work, packaged in a thriller worthy of Michael Crichton.... Dark Pools is one of those rare books that is a great summer beach read and a useful trading manual."
--Minyanville. com

"Very enjoyable....a good story of how innovators destroy the old guard."
--BusinessInsider. com

" Dark Pools relays an epic tangle of hacktivists, old-school floor exchanges and traders – all wrestling to game the machines... The stories engage from chapter to chapter, bringing the reader from the outside in."
--Seeking Alpha

" An entertaining account of the key battles in the "algo wars" and the colorful math geeks who fight them - some of whom are now fighting to rein in the monsters they created. Dark Pools is an alarming account."
--Canadian Business

" Dark Pools is a must read for all serious investors. Patterson's methodically researched book exposes the core problems in today's securities market...His findings should serve as a blueprint for the SEC."
--Blair Hull, founder of Hull Trading and Ketchum Trading

From the Hardcover edition.

Klappentext

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.

Auszüge aus dem Buch

Chapter One

Trading Machines

A rising winter sun cast pale golden light into the otherwise dark and quiet office in downtown Stamford, Connecticut. Haim Bodek, the founder of Trading Machines LLC, squinted at the light through red-thatched eyes and returned his gaze to a stack of five flat-screens on his desk. The only sound in the room was the low hum of dozens of Dell computer towers and several Alienware Area-51 gaming computers.

The sound of the Machine.

It was December 2009. Bodek hadn't been up all night swilling fine wines and schmoozing with deep-pocketed clients at four-star restaurants in Manhattan. He didn't need to. His firm traded for its own account, and Bodek answered only to himself and to a few wealthy partners who'd bankrolled the firm.

He wouldn't have it any other way. No twitchy investors pulling cash every time the market dipped. And no prying questions about the state-of-the-art Machine he'd created.

No one knew how the Machine worked but Bodek.

But now the Machine wasn't working. Even worse, Bodek wasn't sure why. That's why he'd been up all night. If he didn't solve the problem, it could destroy Trading Machines--and his career.

What made the Machine tick was a series of complex algorithms that collectively reflected a two decades' tradition of elite trading strategies. Bodek had personally designed the algos using a branch of artificial intelligence called expert systems. The approach boiled down the knowledge gained by experts in market analysis and crunched incoming market data in order to make incredibly accurate predictions. It combined various models that financial engineers had used over the years to price options--contracts that give the holder the "option" to buy or sell a stock at a particular price within a certain time frame--with new twists on strategies that savvy traders had once used to -haggle over prices in the pits.

But many of those old-school strategies, geared with cutting-edge AI upgrades that permitted them to compete head-to-head in the electronic crowd, were nearly unrecognizable now. The market had entered a phase of such rapid mind-throttling change that even the most advanced traders were in a fog.

The problem that threatened Trading Machines, Bodek believed, was a bug hidden in the data driving his ranks of algos, hundreds of thousands of lines of code used by the computer-driven trading outfit that he'd launched with sky's-the-limit dreams in late 2007. The code told the Machine when to trade, what to trade, and how to trade it, all with split-second timing.

Bodek, whose seriously pale skin, high forehead, and piercing blue eyes gave him the appearance of a Russian chess master, was a wizard of data. It was the air he breathed, the currency of his profession. An expert in artificial intelligence, he'd made a career of crunching masses of numbers, finding form inside chaos. To discover order in the ocean of information that made up the market required incredible computer power and ingenious trading systems.

Bodek had both. He was so skilled at discovering patterns in the market's daily ebb and flow that he'd risen to the top of the trading world, working first at an elite Chicago firm, packed with math and physics Ph. D.s, called Hull Trading, then inside an elite quantitative derivatives operation at Goldman Sachs, before taking over a powerful global desk at UBS, the giant Swiss bank. In 2007, he broke out on his own and convinced twenty-five top-notch traders, programmers, and quants (an industry term for mathematicians who use quantitative techniques to predict markets) from across Wall Street to join him. He set up shop in Stamford and launched Trading Machines just as signs emerged of an impending global financial crisis. It had amounted to one of the most ambitious trading proje