A material political economy: Automated Trading Desk and price prediction in high-frequency trading

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Abstract

This article contains the first detailed historical study of one of the new high-frequency trading (HFT) firms that have transformed many of the world’s financial markets. The study, of one of the earliest and most important such firms, Automated Trading Desk (ATD), focuses on how ATD’s algorithms predicted share price changes. The article argues that political-economic struggles are integral to the existence of some of the ‘pockets’ of predictable structure in the otherwise random movements of prices, to the availability of the data that allow algorithms to identify these pockets, and to the capacity of algorithms to use these predictions to trade profitably. The article also examines the role of HFT algorithms such as ATD’s in the epochal, fiercely contested shift in US share trading from ‘fixed-role’ markets towards ‘all-to-all’ markets.
Original languageEnglish
Pages (from-to)172-194
Number of pages23
JournalSocial Studies of Science
Volume47
Issue number2
Early online date6 Dec 2016
DOIs
Publication statusPublished - 1 Apr 2017

Keywords

  • High-frequency trading
  • HFT
  • Automated Trading Desk
  • political economy
  • prediction
  • fixed-role markets

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