Algorithmic Trading and a Normative Reconfiguration of Financial Trading

Jakob Arnoldi:

 ‘Algorithmic Trading and a Normative Reconfiguration of Financial Trading’

17 February, 3–5 pm, Porcelænshaven 18B, Room 3.135
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In this presentation I discuss the use of algorithmic models in finance (algo trading). Algo trading is widespread, but also somewhat controversial, in modern financial markets. It is a form of automated trading technology which critics among other things claim can lead to market manipulation. Drawing on three cases, this article shows that manipulation more likely happens in the reverse way, meaning that human traders attempt to make algorithms ‘make mistakes’ by ‘misleading’ them. Thus, it is algorithmic models, not humans, which are the victims of manipulation. Such manipulation poses challenges for security exchanges. The article analyses these challenges and argues that we witness a new post-social form of human-technology interaction that is leading to a reconfiguration of the regulation of financial markets.

Jakob Arnoldi is Professor at Department of Business Administration, School of Business and Social Sciences, Aarhus University. He has published several articles on financial markets and is also author of Alles Geld Verdampft (Suhrkamp, 2009) on the financial crisis.

The talk is part of the Crowd Dynamics and Financial Markets research colloquium