Professor Bierman is on vacation for the next week or so, and he asked me to keep in touch with everyone at Man vs. Machines while he takes a well-deserved break.
Now, what I don’t know about machine-markets could fill a book, although I’m learning… learning…
I’m old enough to remember it; I was working in a financial newsroom, still fairly green, when it happened.
It was a massively eye-opening experience I remember well, some 14 years later. Here’s what you need to know…
One Thursday afternoon, machines run amok blew a hole a mile-wide, trillion-dollar hole in the Big Indexes. It caused absolute mayhem for more than half an hour before the exchanges got it under control.
The culprit was… spoofing algorithms, placing around $200 million in bearish bets. It was my first introduction to the oversized role machines play in the markets and, essentially, the first time I noticed a big, digital Sword of Damocles hanging over my head.
Anyhow, I caught a great Dutch-made Backlight documentary about the Flash Crash just the other day, and I immediately thought of Bierman. It’s an older film, from 2011, but it’s a profoundly informative peek inside the black boxes that to this very day still control regular traders’ and investors’.
You can catch it right there on YouTube. I’ll share it with you all today. I’d rate this a “soft” PG myself, appropriate for most audiences, and is under 50 minutes long.
I’ll be in touch soon, and Professor Bierman will be back toward mid-month.
Enjoy the film.
Greg Madison
Editorial Director, TheoTrade