Faster and More Widely Circulate…
// Posted by Shirley on 06/04/2015 (7:00 PM)
I fear losing money on the stock market as many have over the years. So reading about a faster digital way to trade that is a computerized tool seems a logic progression for investors who understand what they are doing and have need for the power and speed of trading. As I read on I was curious how the author would tie in democratization. So, now I understand that the concept is that it provides more power and gives more control to the people. Information is flowing more freely and openly than ever between individuals and countries. This flow of information requires the efforts of more than a few to accomplish as Sassan wrote. Agreeing politically can cause a shift in the way people trade and where money goes. This transformation of how trading is done will open it up to many which means more can participate and this can redistribute the wealth.
Golumbia indicates that “First, as we have seen, is the idea that the internet dissolves concentrations of power; second, that it flattens or eliminates hierarchies; third, that it creates transparency, making impossible the reliance on proprietary or hidden information, in part because such reliance inherently makes this information available to outside observers” (P. 7). I like how the author’s posits that his thesis is to be challenged.
There are many things impacting stock prices and what I gather from the article an attempt was made to try to trade faster than the negative impact could catch up. It is very hard to predict what actions a “for profit” company makes that will cause fluctuations and to what degree. Someone should have remembered that speed kills! I find it as mind boggling as the author, Adler, that a company can lose so much money in a week. This puts it in perspective how people resort to killing themselves behind mistakes that should have been challenged. How do you recover?
New word for the vocabulary – quants or “A quantitative analyst or, in financial jargon, a quant is a person who specializes in the application of mathematical and statistical methods” (Wikipedia).
Other points worth noting:
Computerization may or may not cause democratization. The internet will not totally replace other forms of media. Individuals will retain as much power as corporations on the internet. Small sites will not be overrun by larger ones. The internet is not so distributed when most information comes through only a few engines. Since it has been proven that computerized trading is more reliable, I may give it a try. HFT trade in the direction of price changes and the chance of loss is reduced.