Dark Pools: The Rise of Artificially Intelligent Trading Machines and the Looming Threat to Wall Street

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 marA 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.
Dark Pools The Rise of Artificially Intelligent Trading Machines and the Looming Threat to Wall Street 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 cov

  • Title: Dark Pools: The Rise of Artificially Intelligent Trading Machines and the Looming Threat to Wall Street
  • Author: Scott Patterson
  • ISBN: 9780307887177
  • Page: 299
  • Format: Hardcover
  • 1 thought on “Dark Pools: The Rise of Artificially Intelligent Trading Machines and the Looming Threat to Wall Street”

    1. Upfront disclaimer. I work in the industry critiqued by this book.Lets start with the good of this book. Patterson does a good job creating an entertaining narrative, telling the early days of electronic trading. While he isn't Michael Lewis, he does a passable run at the genre. The characters he introduces are interesting and he makes what could be a very boring subject easy to read about. The parts of this book where he talks about the early days of Datek and the Island electronic trading netw [...]

    2. hard to cut through the fluff to get to the facts, and the author's repeated breathless use of impressive-sounding facts ("7 *trillion* bytes") without context and meaningless but emotionally charged terms (just what is a "hunter-killer bot" is never explained) harms his credibility

    3. I'm giving this five stars - an honour I bestow on very few books. This is one of the scariest books I have read, as it explains the sham that is the financial industry today in some detail, in a way that can be understood by anyone prepared to exercise a little thought. You can probably criticise this book on matters of small detail (misunderstanding of technical terms, over-focus on personalities, the fictitious "fly on the wall" style, etc.). Such criticisms miss the main thrust of the book, [...]

    4. Please applaud Scott Patterson, a daily newspaper journalist, for making the leap into book publishing. He stands above his colleagues for completing the marathon. “Dark Pools” is an accomplishment that must be praised for shedding light on a difficult topic to visualize.But the book is a flawed product. Patterson’s book struggles to clearly express the harm deep within the plumbing of stock trading.First the title is misleading. Dark pools are a just venue for financiers who make money on [...]

    5. There was so much information in this book I had to back and reread parts of itd even so I still don't think I understood all of it. What a crazy, complex, sneaky, speedy life those traders and their algorithms and computers lead. I found this book equal parts fascinating and horrifying. I'm all for computers and machine learning, but some of this stuff is scary. So much research must have gone into this book. Most of the info and concepts were explained well so that I - the dumb layman could mo [...]

    6. The SOES bandits with Josh Levine at the helm take on the antiquated insider blue blooded good ol boys exchanges at the Nasdaq and NYSE. only to triumph and become the evil they sought to destroy. Instead of an insider market maker system they created a brain stealing industry that spends billions on optimising milliseconds. A technorati elite that competes in Gflops.Josh Levine started an arms race. That culminated today in the creation of a market so disconnected from its roots that it bears l [...]

    7. We live in an era of fraud in America. - Michael Lewis This excellent detailed account of the rise of high frequency trading reminds us yet again that human nature hasn't changed. Selfish ambition still holds sway. The only question I have is what am I to do about it when thinking of my own investment for the future?

    8. Much of the ground covered by Flash Boys, its better-known high-frequency trading counterpart, was first addressed in this book.

    9. There are a number of problems with this book that could have been solved by an author with greater technical understanding but the subject matter was interesting and novel to me enough to warrant a higher rating. Half the major issues with high frequency trading seem like they would be solved by eliminating (through law) the maker taker fees. Both parties to a trade would pay the same fee to the exchange and the incentive to spend a lot of resources making money from being the 'maker' would go [...]

    10. Some interesting information not present elsewhere mixed with outright error by an author with a talent for writing the form of narrative history. References and citations, even a bibliography or list of sources, is nonexistent. Many parts read more as rehashed newspaper headlines (and articles?) than well-written history. When the author speaks of subjects I have knowledge of, he often demonstrates a deep misunderstanding bordering on incompetence: too many stories are, I think, repeated by the [...]

    11. On May 6, 2010 at 2:32 pm, the stock market dropped 800 points in a minute, ultimately losing 9% in 15 minutes before finally recovering. I’ve just completed two books by Patterson: The Quants and Dark Pools. They both deal with the new stock traders and technologies that have taken Wall Street by storm. Patterson does a great job with interweaving the personalities behind the formulas, acronyms, and money with the events that have taken place and that are reshaping our future. The Quants is a [...]

    12. Patterson has written a fascinating and detailed history of the rise of computers and bots in the American, and now global stock markets.He has got potted histories of the major players in this business and shows how they wrestled power and control and most importantly money from the old guard who controlled the market before. He shows how the raise of computer generated trading has massively increased the churn of stocks, where the fastest to buy or sell is the one who makes the most money. The [...]

    13. "Dark Pools" started out well, with a fast pace and some very interesting information tied to a story of money and the underbelly of trading. However as the book progressed it seemed to transition from a great piece of expository writing with character, to a soap opera-like descriptive narrative lacking the educational value of the first chapters. Some passages repeated beyond "reinforcement" to the point of boring redundancy, while some passages seemed to contradict earlier points or facts. Aft [...]

    14. For the most part, this is an excellent historical account of how the current form of the markets and high-frequency trading came to be. It covers many of the people and the history of the digital revolution in trading between 1990 and when the book was published.However, I felt that some of the technical descriptions were a bit lacking in detail and sometimes conveyed a potentially inaccurate representation of technical culture and knowledge common among programmers and other technical people. [...]

    15. The author covers the material so well that even for those who aren't interested in the development of electronic trading will find the story an exciting read. He puts the context around the development and has written the definitive history on the subject.I'm a big fan of "The Singularity is Near" by Ray Kurzweil and I thought a lot of his telling of the story was influenced by Ray Kurzweil's thinking on AI and such. Near the very end of the book the author brings up Kurzweil and his thinking. [...]

    16. Having enjoyed Flash Boys, this book was suggested by a friend. I enjoyed this book for a number of reasons. First, it is well written, it's a smooth read, nothing clunky to it. Second I throughly enjoyed the context and brief overview of the history of modern trading and the switch to electronic. I also liked the characters, they were likable.My main beef with this book was the structure and the order of the individual parts of the book that make up the overall story. I found the abrupt endings [...]

    17. An accessible book with a misleading title that provides a compelling account of the history and somewhat-current (2012) state of the stock market. My issues are that it reads more like an essay collection and doesn't get into enough technical detail (Algos, algos, algos ad infinitum). The author's attempt at piecing together a Lewis-esque narrative fell incredibly short, mostly in the way of character development. As was the case in The Quants, the book unravels in the last few chapters before [...]

    18. I had previously read Michael Lewis' "Flash Boys", and quite enjoyed the story - a lot of reviews also recommended this book.I would say Dark Pools have a bit more of the background story for a lot of the high frequency trading compared to "Flash Boys".I wished the author would have delved a little more into the technical understandings of high frequency trading and the algorithms used.I thoroughly enjoyed the whole part about Josh Levine, but found the description of Sergey Aleynikov completely [...]

    19. "Dark Pools" is an awesome book that provides a story line of how "wall street" was automated over the past 20 years. It is a stunning story. From the clubby market specialists beforehand to the electronic market makers of today (which was replacing one set of "street insiders" with another), including the more recent machine learning high speed algos. The story lines are sometimes hard to follow in the book, but it is a difficult story to tell. A highly recommended read if you really want to un [...]

    20. Easy, superficial read. Says things like "[some college] was a breeding ground for tech heads" and everyone is awesome and making money hand over fist and defying industry trends because they are just super smart.Who doesn't like to read that? Sign me up. Makes me feel all like I could've invented high speed trading had I just been born 15 years earlier. Everyone in this book seems to just start a trading company and sell it for half a billion dollars unless you're one of the idiots.Also liquidi [...]

    21. Patterson sums up the contemporary state of affairs of humanity's descendent to the abysmal lows by revealing how the stock market , considered by many the guiding "Polaris" ; is in-fact rigged and infiltrated by financial behemoths and their high speed trading algorithms and downright removing all human element e.g. Traders. Basically generating "wealth" from nothing , while the average investor (the mom n pop's) have absolutely no clue and pretty much at the mercy of the "AI box" which spits b [...]

    22. This is a remarkable illustration of the insanity into which capitalism has descended. Brilliant brains have constructed systems which have no other purpose than to make obscene fortunes as parasites on the constructive activities of others. And, it appears, no one can or will stop them. Reading this book (much of the detail of which will be incomprehensible to most) we should consider how much benefit to the world could have been achieved if these men (and it is all men) had turned their brain [...]

    23. Traces electronic evolution of US financial markets via experiences of people who helped, resisted, profited and/or lost. Tells stories of rebels fighting entrenched elites and in many cases becoming new insiders.Surprising resonance with and more concrete manifestation of in particular "Economics 2.0" from Charlie Stross's "Accelerando".

    24. A fascinating account of the high speed trading evolutionI'm not an industry insider so I cannot comment on the accuracy and completeness of the story being told but it's at least a riveting book to read. The author clearly spent a lot of time collecting all the facts and weaved them into a holistic story.

    25. I suppose if you knew virtually nothing about modern financial markets and these things that are apparently called . . . com-pu-ters(?) . . . this book might be worth your time. But while there is some useful information buried amid the overwrought prose, this is mostly an exercise in source-stroking and adjective abuse.

    26. Much better context on HFT than Flash BoysI read Flash Boys and really enjoyed it, but came away not fully understanding what was going on. This book starts at the beginning of electronic trading and helps the reader understand the wider context that the shift to electronic trading and HFT occurred in.

    27. An important read. In spite of all the criticism, however, I still think the Stock Market offers an approach to personal finance that has far more potential to the average investor than the banks. No, you cannot beat the hyperfast machines and insiders, but you can do yourself and your family a lot of good. Full disclosure, I worked as a broker and remain an avid investor.

    28. Clear history of the creation of electronic equity trading exchanges, good view into HFT shops. Too much hyperbole and repetition of certain statements about the effects of HFT. Highly recommend reading this first before Flash Boys as it provides a great framework for better understanding that book (and the timing of the creation of the IEX); get them as a pair.

    29. Good history of a facet of electronic trading. Rather than vilifying electronic/algorithmic trading, it offers a fairer view. The NYSE and NASDAQ, however, do not emerge unscathed.Recommend reading this along with Michael Lewis' Flash Boys.

    30. More reading for Stockfighter.The book seemed even more entertaining to me than Flash Boys — Lewis has the better story, but this is more coherent and actually technically useful by providing some specific strategies that can be used in a trading game.

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