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Tools of the trade: the socio-technology of arbitrage in a Wall Street trading room

Beunza, Daniel and Stark, David (2004) Tools of the trade: the socio-technology of arbitrage in a Wall Street trading room. Industrial and Corporate Change, 13 (2). pp. 369-400. ISSN 0960-6491

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Identification Number: 10.1093/icc/dth015


To analyze the organization of trading in the era of quantitative finance we conduct an ethnography of arbitrage, the trading strategy that best exemplifies finance in the wake of the quantitative revolution. In contrast to value and momentum investing, we argue, arbitrage involves an art of association—the construction of comparability across different assets. In place of essential or relational characteristics, the peculiar valuation that takes place in arbitrage is based on an operation that makes something the measure of something else—associating securities to each other. The process of recognizing opportunities and the practices of making novel associations are shaped by the specific socio-spatial and socio-technical configurations of the trading room. Calculation is distributed across persons and instruments as the trading room organizes interaction among diverse principles of valuation.

Item Type: Article
Official URL:
Additional Information: © 2004 ICC Association
Divisions: Management
Subjects: E History America > E151 United States (General)
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HG Finance
JEL classification: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods and Programming > C65 - Miscellaneous Mathematical Tools
G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking; Venture Capital; Brokerage; Rating Agencies
Date Deposited: 06 Sep 2011 09:51
Last Modified: 20 Oct 2021 01:39

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