Automating Finance: Infrastructures, Engineers, and the Making of Electronic Markets

374 Pages·2019·18.303 MB·English

by  Juan Pablo Pardo-Guerra

Automating Finance
Trading floors are a thing of the past. Thanks to a combination of
computers,high-speednetworks,andalgorithms,millionsoffinancial
transactions now happen in fractions of a second. This book studies
the automation of stock markets in the United Kingdom and the
United States of America, identifying the invisible actors, devices,
andpoliticsthatwerecentraltothecreationofelectronictrading.In
addition to offering a detailed account of how stock exchanges
wrestled with technology, the book also invites readers to rethink
the nature of markets in modern societies. Markets, it argues, are
sitesforthecreationofrelations,andinstudyinghowtheserelations
changedthroughtechnology,thebookhighlightsthesources,dynam-
ics,andconsequencesofautomation.Inthisrespect,thebookisboth
a history of automation in finance and a sociological analysis of the
wayinwhichautomationgraduallychangedthelivesandworkofkey
financialactors.
  - is Assistant Professor in Sociology at
theUniversityof California, SanDiego.Buildingonanearlyinterest
in econophysics and artificial financial markets, his work covers the
history of technology in financial markets, the sociology of art
markets,andtheuseofcomputationalmethodsinsocialscience.

Automating Finance
Infrastructures, Engineers, and the
Making of Electronic Markets
   
-
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DOI:10.1017/9781108677585
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Firstpublished2019
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Title:Automatingfinance:infrastructures,engineers,andthemakingofelectronic
markets/JuanPabloPardo-Guerra,UniversityofCalifornia,SanDiego.
Description:Cambridge,UnitedKingdom;NewYork,NY:Cambridge
UniversityPress,2019.|Includesbibliographicalreferencesandindex.
Identifiers:LCCN2018057972|ISBN9781108496421(hardback:alk.paper)
Subjects:LCSH:Finance–Technologicalinnovations.|Securities–Data
processing.|Electronictradingofsecurities.|Capitalmarket.
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Contents
ListofFigures pageviii
Preface xi
Acknowledgments xiv
1 Markets in Milliseconds 1
2 Infrastructures of Kinship 27
3 The Power of Invisibility 82
4 The Hubris ofPlatforms 120
5 The Wizardsof King Street 163
6 MakingMoralMarkets 207
7 RabbitsGuarding the Lettuce 248
8 Infrastructures, Kinship, and Queues 301
Appendix: ANoteonSources 324
Bibliography 327
Index 352
vii
Figures
1.1 PosterbyPeterBennett,c.1986/1987,representing
thefutureoftradingandstockexchanges page15
2.1 EtchingoftheinterioroftheLondonStock
Exchange,c.1870 51
2.2 Etchingof“TheClearingHouse”fromWalter
Thornbury’s“TheStockExchange,”inOldand
NewLondon(1878) 59
2.3 “Threetapswithahammer–Proclaimingadefaulter
ontheLondonStockExchange” 65
3.1 LondonStockExchange,ThrogmortonStreet–
TheTradingFloor,c.1960 92
3.2 EarlypricedisseminationsystemattheLondonStock
Exchange,c.1955 94
3.3 AlanBusseyandprojectmanagerSylviaBriggs,testing
theMPDS 96
3.4 AtypicalscreenoftheMPDS 98
3.5 TonyCareyinfrontofanMPDSmaintenancevan 99
3.6 Changesintheorganizationalstructureofthe
LondonStockExchange,1967–1975 100
4.1 JohnScannelltestingtheExchangePriceInformation
Computer 127
4.2 Hexagonalpitchesonthetradingfloorofthenew
buildingoftheLondonStockExchange,c.1974 131
4.3 AtypicalSEAQscreen 144
4.4 Triggerpage 146
4.5 Thehexagonalpitchesofthetradingfloor,
equippedwithscreensforthenewmarketplace 155
4.6 Numberofemployees,profits,andlossesatthe
LondonStockExchangebetween1986and1991 158
viii