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Dark Pools: The Rise of Artificially Intelligent Trading Machines and the Looming Threat to Wall Street
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Dark Pools: The Rise of Artificially Intelligent Trading Machines and the Looming Threat to Wall Street

4.05 of 5 stars 4.05  ·  rating details  ·  777 ratings  ·  90 reviews
A news-breaking account of the global stock market’s subterranean battles, Dark Pools portrays the rise of the “bots”– artificially intelligent systems that execute trades in milliseconds and use the cover of darkness to out-maneuver the humans who’ve created them.

In the beginning was Josh Levine, an idealistic programming genius who dreamed of wresting control of the mark
ebook, 368 pages
Published June 12th 2012 by Crown Publishing Group (first published January 1st 2012)
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Upfront disclaimer. I work in the industry critiqued by this book.

Lets start with the good of this book. Patterson does a good job creating an entertaining narrative, telling the early days of electronic trading. While he isn't Michael Lewis, he does a passable run at the genre. The characters he introduces are interesting and he makes what could be a very boring subject easy to read about. The parts of this book where he talks about the early days of Datek and the Island electronic trading netw
Hugh Ashton
I'm giving this five stars - an honour I bestow on very few books. This is one of the scariest books I have read, as it explains the sham that is the financial industry today in some detail, in a way that can be understood by anyone prepared to exercise a little thought.

You can probably criticise this book on matters of small detail (misunderstanding of technical terms, over-focus on personalities, the fictitious "fly on the wall" style, etc.). Such criticisms miss the main thrust of the book,
Paul Cheney
Patterson has written a fascinating and detailed history of the rise of computers and bots in the American, and now global stock markets.

He has got potted histories of the major players in this business and shows how they wrestled power and control and most importantly money from the old guard who controlled the market before. He shows how the raise of computer generated trading has massively increased the churn of stocks, where the fastest to buy or sell is the one who makes the most money. The
Mar 31, 2013 Nancy marked it as did-not-finish  ·  review of another edition
I "won" this book in a goodreads giveaway in July of 2012. It has yet to arrive (as of March 2013) even though I followed up in fall of 2012 and was told that I would get a copy. It is possible that one copy was "lost in the mail" but two? I have won other first read giveaways books and in all those cases I got the book. In one case I was sent the wrong book (Fountain of Age: Stories) but was immediately sent the right book (At the Mouth of the River of Bees: Stories when I contacted the publish ...more
Please applaud Scott Patterson, a daily newspaper journalist, for making the leap into book publishing. He stands above his colleagues for completing the marathon. “Dark Pools” is an accomplishment that must be praised for shedding light on a difficult topic to visualize.

But the book is a flawed product. Patterson’s book struggles to clearly express the harm deep within the plumbing of stock trading.
First the title is misleading. Dark pools are a just venue for financiers who make money on the b
The author covers the material so well that even for those who aren't interested in the development of electronic trading will find the story an exciting read. He puts the context around the development and has written the definitive history on the subject.

I'm a big fan of "The Singularity is Near" by Ray Kurzweil and I thought a lot of his telling of the story was influenced by Ray Kurzweil's thinking on AI and such. Near the very end of the book the author brings up Kurzweil and his thinking.
Torsten Tomas
Scott Patterson is awesome. I loved his book The Quants, and this follows right along with it. I think he's as good as Michael Lewis or Mark Bowden.
Matias Singers
I had previously read Michael Lewis' "Flash Boys", and quite enjoyed the story - a lot of reviews also recommended this book.

I would say Dark Pools have a bit more of the background story for a lot of the high frequency trading compared to "Flash Boys".
I wished the author would have delved a little more into the technical understandings of high frequency trading and the algorithms used.

I thoroughly enjoyed the whole part about Josh Levine, but found the description of Sergey Aleynikov completely
I won this on first reads. I am eager to receive it.
Jane Walker
This is a remarkable illustration of the insanity into which capitalism has descended. Brilliant brains have constructed systems which have no other purpose than to make obscene fortunes as parasites on the constructive activities of others. And, it appears, no one can or will stop them. Reading this book (much of the detail of which will be incomprehensible to most) we should consider how much benefit to the world could have been achieved if these men (and it is all men) had turned their brain ...more
Thomson Kneeland
Great and easy read, I'd highly recommend this to anyone looking for insight into HFT's and the birth of electronic trading and algorithms. Details various players, their struggles with the exchanges and more. Non-abstruse, easily readable in story form for anyone to read. Kind of an abrupt ending, would have liked to have heard more analysis from the players on the future of HFT/trading, etc. All in all, from what I can tell, this is a much more balanced account of dark pools and HFT than Micha ...more
Dumb book. Although Patterson has written competently for the WSJ (albeit often in collaboration & always under editorial supervision), Dark Pools, like The Quants (2010), is more of a chatty, superficial survey of industry-insider views than a straight-up explanation of what is going on.

Patterson deploys a novelistic style of writing known as free indirect discourse, which licenses him to read the minds of characters that he's never met and to recount long-ago conversations that he never wi
In the 1953 science fiction story "Watchbird" by Robert Sheckley, the police try to control murder by releasing a swarm of drones that administer an electric shock to any would-be murderer. The problem was that the drones' AI got its own ideas about what constitutes murder (slaughtering a cow? fishing? harvesting grain? turning off a radio?), so the drones themselves became wanton murderers. The only way to control them was to release a new batch of drones, also equipped with AI, set on killing ...more
By Scott Patterson; Grade: A
When I first accepted this book, I was apprehensive, to say the least. And the reason for that was the fact that my knowledge about the stock market is painfully limited. No exaggeration there. But then, I’m always up for a challenge, and how could I back down from this one? So I studied a little on the internet. Didn’t understand much, but hey, I tried! I decided to start the book based on the little I had understood.
A news-breaking account of the global stock market
By Martin Hutchinson

It’s a quarter-century since computerized program trading led to Black Monday on the U.S. stock market. A new and more advanced generation of arcane algorithms now threatens capital markets. That is the lesson of “Dark Pools,” a new book on machine-based equity trading by the Wall Street Journal’s Scott Patterson. The book is a great read – and raises an important question: could the trading machines destroy the capital markets?

Patterson provides a lively account of the growt
Matteo Cesari
I was searching some documents about the topic of "Dark Pools" for my academic studies when I found this book.
When I read the teaser of the book, I understood that it wouldn't have explained me academically the dynamics of the phenomenon, but I was interested all the same so I bought it on ebook.
To my utter disappointment, I discovered that this book does not talk at all about dark pools, but (as the author himself writes in the notes at the END of the book) because "I argue in this book that th
David Kinchen
If you want to understand the stock market as it is today -- only a few years since it's been taken over "Invasion of the Body Snatchers" style by computer geniuses -- you'll have to read Scott Patterson's "Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market," the paperback edition of a hardback published in 2012 by Crown Business, an imprint of the Crown Publishing group of Random House.

"Dark Pools" is the fascinating -- and often very scary -- story of how gl
Dark Pooks is about algorithmic/high frequency trading (not the same thing, but there are times when you can use them interchangeably), its history, its risks, and its benefits to the market. The basic message is: algorithmic trading is risky (to the economy) and unfair (to fellow market participants). But the old way was, too. Plus really big jerks were trying to suppress 3rd party electronic access to the exchanges.

I'm torn about how to rate this. In terms of overall quality/genre (airport boo
Fred P
Everyone needs to understand the implications of electronic trading on our economic markets. With the explosion of global derivatives, a six trillion dollar speculative market, a lot of money is being moved electronically, and those with the fastest technology reap the rewards.

This is the story of how the NASDAQ and the NYSE stock trading floors were superseded by electronic trading. With that change, a new market developed based on skimming pennies off trades by jumping ahead in the trading or
Eric Piotrowski
There is no more important book to read about how stock markets have changed in the past 50 years. With clear explanations that don't skimp on the details, Patterson does a superb service to the average person in illuminating (ha ha) the hidden world of high-frequency trading.

I've been following this trend for several years, and I'm thrilled by the candor uncovered in these pages, as well as the concentrated treasure chest of sheer information. We get intriguing mini-biographies of the key playe
After his success in “The Quants” Patterson continues down the rabbit hole of mathematical and sciency economics and finance with his book “Dark Pools”.

Patterson describes the rise of electronic trading and High Frequency Trading (HFT).

It is a fascinating read and you get a glimpse into the world that is already dominating our financial markets. More than 70% of all trades today are made by computers and their algorithms.
In the book you get to know what exchanges are, which purpose they serve, h
I really liked this book. It gives a pretty complete and interesting description of the tidal wave of computers that hit Wall Street in the last 20 years and the changes that resulted. Some good, some pretty bad. I highly recommend this book to people that are interested in the history of finance. Not a how to book of dark pools.... maybe more of an encouragement to stay away. I would read this before reading the "Flash Boys" for continuity.
For the most part, this is an excellent historical account of how the current form of the markets and high-frequency trading came to be. It covers many of the people and the history of the digital revolution in trading between 1990 and when the book was published.

However, I felt that some of the technical descriptions were a bit lacking in detail and sometimes conveyed a potentially inaccurate representation of technical culture and knowledge common among programmers and other technical people.
Covers some very interesting topics such as the early days of Datek, Island and Archipelago but, other than a few passing mentions, completely steers clear of describing and outlining how private market dark pools actually work. Also the Sergey Aleynikov story reads like a press release from GS and the US Attorney's Office. Michael Lewis' "Flash Boys" is a much better "first" read on this topic.
Nancy Bradli
It's interesting that I'm just finishing up reading this book in the week that Knight Capital had a "software glitch" that caused the prices of 148 stocks to go haywire. Perhaps we should be paying closer attention to the "plumbing" of the stock market. If it's true that the structure of the markets has fundamentally changed due to computer algorithms, then the SEC and Congress should be jumping all over this situation to correct these imbalances in order to restore faith in our markets. This bo ...more
hard to cut through the fluff to get to the facts, and the author's repeated breathless use of impressive-sounding facts ("7 *trillion* bytes") without context and meaningless but emotionally charged terms (just what is a "hunter-killer bot" is never explained) harms his credibility
Is Josh Levine the Dr. Frankenstein or Dr. Oppenheimer of the modern stock market? Neither is a perfect analogy but Levine is the inventor of the Island stock trading platform that lead to the proliferation of ECN stock exchanges. These exchanges morphed into the High Frequency Trading systems and quantitative traders that exterminated the human floor traders and market makers. The book is a solid history of the change in stock trading over the last two decades without getting bogged down in the ...more
Kenneth Sylvain
Reads a lot like a Micheal Wells or John Grimsham nonfiction. Fascinating history of the rise of algorithmic trading and provides an interest introduction to market structure. The author does a respectable job of sounding far less doomsayer-like than the title would suggest.
This is one of the best books about finance and financial markets I have read. It includes enough information about how our financial markets function to make the rest of the story intelligible, and explains how electronic "dark pools" came to exist and how they function, and how automated trading using artificial intelligence software has become the largest part of the financial markets today. If the book were just an abstract presentation of the topic it no doubt would be dull, but it has the ...more
Yes, it's yet another finance book that shows the incredible influence of Michael Lewis-style writing, with a highly edited focus on individual histories accompanied by didactic asides on simplified explanations of financial concepts. But Patterson doesn't appear to be too trapped in the cult of personality and does a nice job of occasionally widening the focus. For example, I was pleased to read the discussions of how regulations interacted with the market forces, going so far as to specify whi ...more
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I'm the author of a new book called Dark Pools, as well as a New York Times best-seller called The Quants. I'm a reporter for The Wall Street Journal, covering financial regulation from Washington, D.C. I've also written for the New York Times, Rolling Stone and Mother Earth News. I have a masters of arts degree from James Madison University and currently live in Alexandria, Virginia.
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“The Algo Wars were leaving a path of destruction in their wake. “HFT algos reduce the value of resting orders and increase the value of how fast orders can be placed and cancelled,” wrote Nanex researcher Eric Hunsader. “This results in the illusion of liquidity. We can’t understand why this is allowed to continue, because at the core, it is pure manipulation.” 0 likes
“The morning of the offering, NYSE officials on the floor passed out silver bells emblazoned with NYX on the handle. Traders were told to ring them with abandon at the open. While they were billed as a shiny memento, their true purpose—to drown out the expected chorus of boos and catcalls from disaffected specialists—spoke volumes about the turmoil behind the scenes.” 0 likes
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