Dark Pools: The rise of A.I. trading machines and the looming threat to Wall Street
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- Type：Epub+TxT+PDF+Mobi
- Create Date：2021-07-31 09:55:53
- Update Date：2025-09-06
- Status：finish
- Author：Scott Patterson
- ISBN：1847940986
- Environment：PC/Android/iPhone/iPad/Kindle
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Summary
In Dark Pools， Wall Street Journal reporter Scott Patterson tells the story of the group of whizzkids who applied their computer programming genius to the invention of 'robot versions of Warren Buffett'。 As they did so， they created a radically new trading system in which machines trade anonymously with other machines， making and losing fortunes in the blink of an eye。 This state-of-the-art technology has transformed the financial markets， but it has also raised some disturbing questions。 If computers are trading with each other， does that mean that people have lost control？ How can this system be monitored， let alone regulated？ And if it all comes crashing down， whose fault will it be？
Pacy， fascinating and revealing， Dark Pools takes the lid off the new-look financial markets， and comes to some chilling conclusions。
Pacy， fascinating and revealing， Dark Pools takes the lid off the new-look financial markets， and comes to some chilling conclusions。
Reviews
Charles Sunnucks
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An interesting glimpse behind the curtain of a very murky world
Rebecca Yuan
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Good overview of what/why/how algos/bots/AI entered financial markets and the implications of their presence。
Sergey
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Continuation of history of electronic trading started in the first book The Quants。Covers evolution of markets algo-trading from 1990's up to 2010's。 Continuation of history of electronic trading started in the first book The Quants。Covers evolution of markets algo-trading from 1990's up to 2010's。 。。。more
Jairo Fraga
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Rather interesting read regarding the revolution of the algos and the U。S。 stock market rigging by them。The author writes well， making the read entertaining， featuring some of Wall Street traders/programmers and how did they manage to control the markets。Tells about previously successful HFT Bodek， which was ubable to make profit anymore。 The book dwells into many stories as how high frequency trading gradually replaced floor market makers， unfortunately for them。Particularly， the star of the bo Rather interesting read regarding the revolution of the algos and the U。S。 stock market rigging by them。The author writes well， making the read entertaining， featuring some of Wall Street traders/programmers and how did they manage to control the markets。Tells about previously successful HFT Bodek， which was ubable to make profit anymore。 The book dwells into many stories as how high frequency trading gradually replaced floor market makers， unfortunately for them。Particularly， the star of the book is the some what unknown Josh Levine。 A boy with no grad to sport， but a true genius， which envisioned how this market could one day be fully electronic。 Never dropping his jeans and t-shirt at meetings with high profile people on Wall Street。 I won't spoil the many small stories inside， as they are usually not big and are easy to digest （not much technical details）。Recommended reading for anyone who is interested in the evolution of the electronic markets。 Average reading time: 6h 。。。more
Cosmictimetraveler
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Essentially a better version of Flash Boys。 It is a 5 star financial history book， but I find it very difficult to give these types of books 5 stars due to the company they would be in if I were to do so （this may be a solid book but it is no Blood Meridian。。。）。 Highly recommended for anyone currently investing in the stock market。 It will change the way you think about investing and give you an idea of what you are up against。 The only downside is it ends rather abruptly after introducing new c Essentially a better version of Flash Boys。 It is a 5 star financial history book， but I find it very difficult to give these types of books 5 stars due to the company they would be in if I were to do so （this may be a solid book but it is no Blood Meridian。。。）。 Highly recommended for anyone currently investing in the stock market。 It will change the way you think about investing and give you an idea of what you are up against。 The only downside is it ends rather abruptly after introducing new characters， but that is because this story is far from over。I listened to it on audiobook and the narrator was great， I was able to listen to it at 2x speed without difficulty。 。。。more
Kevin T。 Foley
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It is very apparent that the author is a very good writer and researched the subject matter extremely well。 At times the book was mesmerizing and then it would fall flat with too much detail and chapters that seemed to just go on and on。 Storytelling for the most part was good but then you would get mired down into some level of detail that spawned way too much complexity in my opinion。 The ending kind of fell of a cliff too。 I expected more of a conclusion versus the abrupt ending of an unfores It is very apparent that the author is a very good writer and researched the subject matter extremely well。 At times the book was mesmerizing and then it would fall flat with too much detail and chapters that seemed to just go on and on。 Storytelling for the most part was good but then you would get mired down into some level of detail that spawned way too much complexity in my opinion。 The ending kind of fell of a cliff too。 I expected more of a conclusion versus the abrupt ending of an unforeseen future。 I did learn quite a bit from this book and some things I wish I didn’t know but if you are interested in learning about why there are so many wild swings daily in the market and what may be happening to your money on a daily， weekly， etc。 basis then this book will help you and probably scare the s—t out of you too！ 。。。more
Adam Gravano
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A gripping account of the structural changes of the stock market over the last thirty years。
Rob Galbraith
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Incredible storytelling about fundamental changes to financial markets most of us missedI read this book after the controversy surrounding the Reddit trade in 2021 and it was a complete revelation。 I was quite interested in financial markets in my youth up through my mid-20s， even spending 2 years working at the Federal Reserve Board。 Having been more of a passive investor through 401k retirement plans and college 529 plans with occasional trading for personal enjoyment， I was complete unaware h Incredible storytelling about fundamental changes to financial markets most of us missedI read this book after the controversy surrounding the Reddit trade in 2021 and it was a complete revelation。 I was quite interested in financial markets in my youth up through my mid-20s， even spending 2 years working at the Federal Reserve Board。 Having been more of a passive investor through 401k retirement plans and college 529 plans with occasional trading for personal enjoyment， I was complete unaware how fundamentally financial markets have changed over the past 20 years。 While this book was published in 2012， it remains highly relevant today and is an excellent primer and modern history on how markets function today。 I compare it favorably to Flash Boys by Michael Lewis， which was also a good read but lacked some deeper explanations in favor of more narrative。 Author Scott Patterson offers both a great story and sharp insights in this book。 The character of Josh Levine in particular was fascinating and worth the price by himself。 。。。more
Dave Schumaker
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I started reading this after the recent Robinhood / GME fiasco and some Redditors mentioning why they loved everything about it because of how manipulated our markets are。I found this to be a fascinating look into the history of electronic trading。 In the mid-'90's， a talented young programmer had the idea to write a program that could place trades and manage an order book -- the first time anything like this had ever been tried。 The goal was to eliminate brokers （who acted as nothing but expens I started reading this after the recent Robinhood / GME fiasco and some Redditors mentioning why they loved everything about it because of how manipulated our markets are。I found this to be a fascinating look into the history of electronic trading。 In the mid-'90's， a talented young programmer had the idea to write a program that could place trades and manage an order book -- the first time anything like this had ever been tried。 The goal was to eliminate brokers （who acted as nothing but expensive middlemen） and democratize access to trading and investing。Little did he know， his ideas （and code） would go on to power some of the biggest exchanges in the world， form the backbone of our stock markets， and herald the age of high-frequency trading algorithms -- that ultimately prey upon average investors， manipulate markets by driving prices up or down at their beck and call and potentially make the entire system much more brittle and prone to failure。Anyway， this weaved in a number of things I find interesting and I really enjoyed this book。 。。。more
David Wilson
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Despite the author forgetting to discuss the topic of dark pools， “Dark Pools” excellently outlines the transition of our financial sector from human to machine。Enjoyable read for anyone interested in the recent history of exchanges， electronic trading， high frequency traders， algorithmic trading， or artificial intelligence in our financial markets。For those hoping to learn about Dark Pools， try looking elsewhere。
Rohan
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Far too long to merit finishing。 Suffers from the， what appears to be a genre staple， attempt to develop background character arcs for the players involved， who happen to be incredibly banal。 The actual tech is described in purple prose - "predatory algos"， "AI hunter botnets" and so on - and contributes to it's mystification rather than clarification。 Such an incredible waste all round。 Far too long to merit finishing。 Suffers from the， what appears to be a genre staple， attempt to develop background character arcs for the players involved， who happen to be incredibly banal。 The actual tech is described in purple prose - "predatory algos"， "AI hunter botnets" and so on - and contributes to it's mystification rather than clarification。 Such an incredible waste all round。 。。。more
Dominic McQuade
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An interesting overview of the birth of Dark Pools
Abhi Yerra
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Though written about 7 years ago from this review it covers the evolution of the markets to digitalization and all the pitfalls that has caused the economy。 The immense waste to shave off few microseconds of time and the complete change of the financial markets。 This was before crypto showed up so it is interesting to see how the market has further changed。
Santosh Shetty
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Great read on the markets speed demon evolution， picosecond arbitrage， AI Splash Crash reality and the Darwinian death match of the Allgos exploitation of fraction of seconds glitches in market plumbing 。
Jonathan
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5/10“At the end of World War II， the average holding period for a stock was four years。 By 2000， it was eight months。 By 2008， it was two months。 And by 2011 it was twenty-two seconds， at least according to one professor’s estimates。 One founder of a prominent high-frequency trading outfit once claimed his firm’s average holding period was a mere eleven seconds。”Unfortunately for Patterson， even the fact that was published two years prior to Flash Boys， Michael Lewis's name and superiority in st 5/10“At the end of World War II， the average holding period for a stock was four years。 By 2000， it was eight months。 By 2008， it was two months。 And by 2011 it was twenty-two seconds， at least according to one professor’s estimates。 One founder of a prominent high-frequency trading outfit once claimed his firm’s average holding period was a mere eleven seconds。”Unfortunately for Patterson， even the fact that was published two years prior to Flash Boys， Michael Lewis's name and superiority in story telling made Michaels the hit， and Patterson's an afterthought。 Their is not as much of a cohesive narrative here， so for the average readers I would recommend Flash Boys first， and Dark Pools as a coda if your interest has not been satisfied。 Essentially the issue at hand in Dark Pools is the effect that technology has had on the stock market; resulting in a world where those with the best technology receive the best outcomes。 Patterson sees this as "sub-optimal"。 I suppose the two issues I have are as follows: you cannot stop the spread of technology into an industry， you can only democratize it's access。 Secondly， this is not harming the "average" （by this Patterson means typical American who has a 401k） investor， as buying a single share for several cents more then the list price means almost nothing to them。 Instead， it has a disproportionally negative effect on large institutions who are unable to keep up with high frequency traders （HFT's）。 By all means I say， gobble up these banks and allow survival of the fittest to have its way in the market。 I say this a little tongue in cheek， as I obviously want my own investments protected。 “Just as quickly， as stocks bobbed and weaved， those orders were canceled and resubmitted at different price points—at different exchanges and dozens of other trading venues， such as dark pools （incredibly， a staggering 90 percent or more of all orders placed into the stock market were canceled）。” 。。。more
Matt Stirling
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Really enjoyed the mixture of technology and Capital Markets conspiring to solve an interesting business problem。 And the heart of the business problem reveals that human behaviour behind the competing demands within equity market evolution。 Every chapter reads like a revealing glimpse into a secret world full of fortunes and very interesting stories。
PIYU CHUNG
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Peek into the evolution of electronic trading， HFT and AIThe book describes the complex recent history of the stock market since it went electronic。 While lots people invest in the market， few know how the market has been manipulated and rigged。 I really appreciate the author’s effort to shine a light on the unfairness and danger。 It does not seem the problems have been resolved though。
Kenneth Aus
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This give useful perspectives on hft。 I've read some other books on this topic， and agree with the comments that this book gives a bit more balanced presentation of the topic。 There is a lot of interesring stories here。 This give useful perspectives on hft。 I've read some other books on this topic， and agree with the comments that this book gives a bit more balanced presentation of the topic。 There is a lot of interesring stories here。 。。。more
Vivek Verma
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Mumbo jumbo。 Some good information that could've just been an article。 Mumbo jumbo。 Some good information that could've just been an article。 。。。more
Shorya Jain
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Brilliant read， wonderful writing style。 With a chronological take， you can understand how algorithmic trading evolved， particularly in the context of dark pools。 You'll learn about the pioneers of the industry， and how they made （or broke） it。 Brilliant read， wonderful writing style。 With a chronological take， you can understand how algorithmic trading evolved， particularly in the context of dark pools。 You'll learn about the pioneers of the industry， and how they made （or broke） it。 。。。more
Me
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Every trader should read。 Cool history and good information。 Such as you ask？ Your stop loss orders is basically meaningless。
Mark Hartmann
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I’d read the author’s Quants book about a decade about and loved it。 This book was more of the same。 Great writing about the tale of how the markets when from the pit to electronic。
Prasanna
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This book was quite interesting in covering a wide breadth of financial markets and the rise of the electronic trading。 I think he does a good job of elucidating the details for someone who isn't already a mathematician or deep into the markets。 The overall narrative arc of Trading Machines with the trader not being aware of exotic order types and then being led to think that the whole system is broken doesn't really hold water however。 If a specific order type or a group of order types end up d This book was quite interesting in covering a wide breadth of financial markets and the rise of the electronic trading。 I think he does a good job of elucidating the details for someone who isn't already a mathematician or deep into the markets。 The overall narrative arc of Trading Machines with the trader not being aware of exotic order types and then being led to think that the whole system is broken doesn't really hold water however。 If a specific order type or a group of order types end up destroying your alpha， you're not really understanding the market anyway？ The real story that was new and really exciting was that of Josh Levine and how much of the modern electronic trading markets are built upon his vision and from the talent that was initially hired by Josh for Island。It makes for a great story to see that he went from an outsider to building something that totally revolutionized the market， while not holding an executive position in Datek or Island。 The deep analysis of the 2011 flash crash from the reports was also very interesting， in how it started from NYSE slowdown and eventually affected every market。 It is worth noting that these systems are complex and complex systems exhibit emergent behaviors that are hard to predict。 As more markets get linked across the world and HFT becomes more of the norm， this will likely increase。The author does approach the traders and the industry as a whole from a less favorable angle however， and it shows。 He writes time and again as a battle of bots and how trading floor is dead now。 The market making hedge funds and traders providing liquidity in the market and evening the price discrepancies aren't delved into further。 The author talks about the plumbing in the system but doesn't really go further into the details of how they work except a few handful of anecdotes that serve in the overall narrative。The final chapter makes the case that the whole market essentially serves as a dark pool from the perspective of an individual or a small time investor， and that， I agree with。 Once you see the amount of preparation and money that hedge funds spend just to get the latest data and to be ahead in the market， it's clear that the average investor clearly is the sucker in the market。 。。。more
Ozifer Eris
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Of all the stock market books I've read， this one has been the most interesting and engaging。 And though I can't use the info practically， I can at least speculate on what the 17，000 artificially intelligent trading machines may do next。 Of all the stock market books I've read， this one has been the most interesting and engaging。 And though I can't use the info practically， I can at least speculate on what the 17，000 artificially intelligent trading machines may do next。 。。。more
Andrew Chen
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good info on the development and proliferation of ECNs。 cool to hear about the origins of island， arca， bats， and direct edge。 author's prose is pretty overdramaticized。 author also displays a lack of technical knowledge which shows in the descriptions and discussion of concepts in the book。 overall a decent book for the historical element but pretty bad for the social commentary。 good info on the development and proliferation of ECNs。 cool to hear about the origins of island， arca， bats， and direct edge。 author's prose is pretty overdramaticized。 author also displays a lack of technical knowledge which shows in the descriptions and discussion of concepts in the book。 overall a decent book for the historical element but pretty bad for the social commentary。 。。。more
Elwin Kline
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"It was okay。" = 2 out of 5 stars。 I honestly only enjoyed about 30% of this book， especially the first 25% which was actually very good。。。 however it goes drastically down hill from there with the other ~70% not being very interesting at all。 It felt like a continuous loop that just kept circling around the same idea over and over again。 The book honestly could have ended at the 25% mark and it would have been perfect。 I would not recommend this book if you are looking to learn more about Artif "It was okay。" = 2 out of 5 stars。 I honestly only enjoyed about 30% of this book， especially the first 25% which was actually very good。。。 however it goes drastically down hill from there with the other ~70% not being very interesting at all。 It felt like a continuous loop that just kept circling around the same idea over and over again。 The book honestly could have ended at the 25% mark and it would have been perfect。 I would not recommend this book if you are looking to learn more about Artificial Intelligence （AI）。 Maybe if you are really into the stock market this would be more up your alley。。。 or， make you want to find a new career path entirely and question getting too involved in investing， especially in the age of AI。 。。。more
Alex Givant
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Are you planning to buy/sell stocks on market？ Read this book， so you just understand what you're facing！ Are you planning to buy/sell stocks on market？ Read this book， so you just understand what you're facing！ 。。。more
Nick
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It's a pretty good journalistic work on computational trading。 I would have enjoyed more focus on how more recent， more "creative" financial instruments interact with these systems， but it stays pretty close to its main topic of stock trading。 It's a pretty good journalistic work on computational trading。 I would have enjoyed more focus on how more recent， more "creative" financial instruments interact with these systems， but it stays pretty close to its main topic of stock trading。 。。。more
Pat Murphy
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For a fair amount of time I was reading books about investing and money for obvious reasons。 Anyway， I have slowed down on that。 However， I still have some books I picked to read still on my Goodreads "want to read" list。 Thus， this Dark Pools book。 Goodread's blurb about what the book is about is a good intro。 Basically it is the story of computers introduction to trading or investing in stocks etc。 The characters are interesting。 I think the book is well written。 By that I mean it is not diffi For a fair amount of time I was reading books about investing and money for obvious reasons。 Anyway， I have slowed down on that。 However， I still have some books I picked to read still on my Goodreads "want to read" list。 Thus， this Dark Pools book。 Goodread's blurb about what the book is about is a good intro。 Basically it is the story of computers introduction to trading or investing in stocks etc。 The characters are interesting。 I think the book is well written。 By that I mean it is not difficult to read。 The writing doesn't use a lot of terminology that is unknown to the average reader who may not know stock investment words。 Also it is written in an interesting fashion。 The characters are well described and in an interesting fashion， a little color describing personality。 The story itself held interest for me because the investment world is interesting to me。 I think it is an interesting read， but someone who has no interest in the investing world would probably not enjoy it in my opinion。 。。。more
Lynley
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