Machine Traders and the Rigging of the U.S. Stock Market

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Introduction to Dark Pools

Dark Pools is a captivating account of the global stock market’s underground battles, revealing the rise of artificially intelligent systems, known as "bots," that execute trades in milliseconds. These bots use the cover of darkness to outmaneuver their human creators, raising concerns about the control and predictability of the market.

The Story Behind Dark Pools

The story begins with Josh Levine, an idealistic programming genius who aimed to wrest control of the market from the big exchanges that often gave giant institutions an advantage over smaller traders. Levine created a computerized trading hub called Island, where small traders could swap stocks. Over time, his invention evolved into a global electronic stock market, sending trillions of dollars in capital through a vast network of fiber-optic cables. However, the market that Levine sought to fix had turned upside down, giving birth to secretive exchanges called dark pools and a new species of trading machines that could think and act independently.

Features of Dark Pools

• Artificially Intelligent Trading Systems: The book explores the development and impact of "bots" that can execute trades in milliseconds, using advanced algorithms to outmaneuver human traders.
• The Rise of Dark Pools: It delves into the creation of secretive exchanges where these bots operate, often beyond the control and understanding of their human masters.
• Global Electronic Stock Market: The story covers the evolution of the global stock market into a complex, electronic system that handles trillions of dollars in trades.
• Insights from Renowned Figures: Endorsements from figures like Michael Lewis and Mark Cuban add credibility and insight into the world of high-frequency trading and market manipulation.

Pros of Reading Dark Pools

• In-depth Understanding of Market Dynamics: Readers gain a deep understanding of how global markets operate, especially the role of artificially intelligent trading systems.
• Insights into High-Frequency Trading: The book provides valuable insights into the strategies and impacts of high-frequency trading, which is crucial for professionals and enthusiasts alike.
• Endorsements from Industry Experts: With endorsements from notable figures like Michael Lewis and Mark Cuban, the book is recognized for its insightful and accurate portrayal of the electronic market.
• Engaging Narrative: The story is presented in an engaging manner, making complex financial concepts accessible to a broad audience.

Cons of Reading Dark Pools

• Technical Complexity: Some readers might find the technical aspects of high-frequency trading and artificial intelligence challenging to follow.
• Outdated Information: Given its publication date, some information might be outdated, and readers should be aware of more recent developments in the field.
• Limited Focus on Regulatory Aspects: The book might not delve as deeply into the regulatory challenges and potential solutions related to dark pools and high-frequency trading as some readers would like.

Publication Details

• Publisher: Crown Currency
• Publication Date: June 25, 2013
• Edition: Reprint
• Language: English
• Print Length: 384 pages
• ISBN-10: 0307887189
• ISBN-13: 978-0307887184
• Item Weight: 2.31 pounds
• Dimensions: 5.25 x 0.85 x 7.96 inches

Customer Reviews

With an average rating of 4.5 out of 5 stars from 1,299 ratings, "Dark Pools" is highly regarded by readers for its insightful look into the world of electronic trading and the impact of artificial intelligence on the global stock market.