Verticals

Money never sleeps; neither do bots

As machines take over the world of investing, data analysts and coders are fast becoming the new rulers.

30 March 2020

Michael Lewis is best known as the quirky fund manager depicted playing drums in his office in the movie The Big Short. He predicted – a little too early – that the US housing market was headed down the drain, and managed to make a fortune betting against the banks. It became clear to Lewis and others that the banks were recklessly doling out mortgage loans, often to people without jobs, and then bundling these loans together and off-loading this junk as AAA-grade mortgage-backed bonds to big institutional investors. It was one of the great scandals of the early 21st century.

Lewis’ next opus was a book called Flash Boys, which explores the relatively modern phenomenon of high-frequency trading (HFT). HFT, as defined by Investopedia, is ‘a method of trading that uses powerful computer programs to transact a large number of orders in fractions of a second. It uses complex algorithms to analyse multiple markets and execute orders based on market conditions’.

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