The worst stock market crash since Black Monday of October 1987 occurred during the first week of August 2007. But no one noticed. On the morning of August 6th, investment professionals were baffled with unprecedented stock patterns: There was a 30% gap between the top stocks and the worst stocks, yet the index remained unchanged. It was the industry’s first world-wide panic – by machines that were Chasing the Same Signals. In retrospect, August 2007 should have been the canary in the coal mine, because it was the first sign of the economic imbalances that lay ahead.
Published by John Wiley & Sons (Asia) Pte Ltd, “Chasing the Same Signals: How Black-Box Trading Influences Stock Markets from Wall Street to Shanghai” (ISBN: 978-0-470-82488-7) investigates how “black box” (computerized) trading has come of age and the future it portends for global equity markets.
The 2007 crisis didn’t mark the demise of black-box firms but rather the opposite. They were the first to feel the impact of the financial crisis, but were the best prepared during the aftermath. Today, more than half of all market turnover are by black-boxes. This book chronicles the black-box industry’s rise to prominence and its impact on the future of stock exchange.
Highly readable and filled with fascinating insights into the world of cyber-trading, this book will not only appeal to investment professionals but also to the laymen, non-quantitative individuals curious to understand the forces influencing market volatility and the new role black-box firms bear in the market place.
About the Author
Brian R. Brown is a Wall Street veteran in quantitative trading. He spent eight years as an executive at Morgan Stanley in Hong Kong, serving as director of pan-Asia systematic trading, where he was influential to Asian reforms that increased market efficiency and attracted global investors. Brian formerly researched and managed statistical arbitrage strategies for Trout Trading Management, one of the legendary Market Wizards. He has advised the industry's largest hedge funds on how to adapt their models in emerging markets. Brian was born in Canada and graduated from the University of Waterloo. He currently lives in Hong Kong with his wife, two children and the family dog, Hotrod.
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