Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market

Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market

by Scott Patterson

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Overview

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.

Product Details

ISBN-13: 9780307887184
Publisher: Crown Publishing Group
Publication date: 06/25/2013
Edition description: Reprint
Pages: 384
Sales rank: 194,611
Product dimensions: 5.40(w) x 7.84(h) x 0.82(d)

About the Author

SCOTT PATTERSON is a staff reporter at the Wall Street Journal, covering financial regulation from the nation's capital.

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Chapter One
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Excerpted from "Dark Pools"
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Copyright © 2013 Scott Patterson.
Excerpted by permission of The Crown Publishing Group.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents

Prologue: Light Pool 1

Part I Machines v Machines

1 Trading Machines 13

2 The Size Game 24

3 Algo Wars 40

4 0+ 47

Part II Birth of the Machine

5 Bandits 67

6 The Watcher 84

7 Monster Key 93

8 The Island 108

9 The Green Machine 125

10 Archipelago 137

11 Everyone Cares 146

12 Palace Coup 161

13 Bad Pennies 170

14 Dumb Money 178

15 Trade Bots 188

16 Crazy Numbers 209

17 "I Do Not Want To Be A Famous Person" 224

Part III Triumph of the Machine

18 The Beast 233

19 The Platform 246

20 Panic Ticks 260

21 Very Dangerous 272

Part IV Future of the Machine

22 A Rigged Game 281

23 The Big Data 297

24 Advanced Chess 311

25 Star 322

Acknowledgments 337

Notes 339

Index 347

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