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Scott Patterson's book "Dark Pools," explores the evolution of high-frequency trading and the rise of electronic trading platforms in the stock market. The author details the rise of individual traders and small firms, such as Datek, Island, and Archipelago, who utilized sophisticated computer programs to disrupt traditional trading practices and challenge the dominance of established institutions like the New York Stock Exchange (NYSE) and Nasdaq. Patterson examines the impact of these technological advancements on market structure and the emergence of algorithmic trading, highlighting the increasing complexity and potential for instability in the market. He also analyzes the emergence of "dark pools," private exchanges that allow large investors to trade anonymously, further obscuring the flow of orders and creating challenges for regulators seeking to understand and oversee market activity.
Scott Patterson's book "Dark Pools," explores the evolution of high-frequency trading and the rise of electronic trading platforms in the stock market. The author details the rise of individual traders and small firms, such as Datek, Island, and Archipelago, who utilized sophisticated computer programs to disrupt traditional trading practices and challenge the dominance of established institutions like the New York Stock Exchange (NYSE) and Nasdaq. Patterson examines the impact of these technological advancements on market structure and the emergence of algorithmic trading, highlighting the increasing complexity and potential for instability in the market. He also analyzes the emergence of "dark pools," private exchanges that allow large investors to trade anonymously, further obscuring the flow of orders and creating challenges for regulators seeking to understand and oversee market activity.