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

Beunza, Daniel and Stark, David (2008) Tools of the trade: the socio-technology of arbitrage in a Wall Street trading room. In: Pinch, Trevor and Swedberg, Richard, (eds.) Living in a Material World: Economic Sociology Meets Science and Technology Studies. Inside technology. MIT Press, Cambridge, USA, pp. 253-290. ISBN 9780262662079

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Abstract

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: Book Section
Official URL: http://mitpress.mit.edu/main/home/default.asp
Additional Information: © 2008 MIT Press
Library of Congress subject classification: E History America > E151 United States (General)
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HG Finance
Journal of Economic Literature Classification System: 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
Sets: Research centres and groups > Employment Relations and Organisational Behaviour Group
Departments > Management
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 06 Sep 2011 09:59
URL: http://eprints.lse.ac.uk/38129/

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