Tools of the Trade: the Socio-Technology of Arbitrage in a Wall Street Trading Room' , won the 20... more Tools of the Trade: the Socio-Technology of Arbitrage in a Wall Street Trading Room' , won the 2005 Outstanding Paper of the Communications and Information Technology division of the American Sociological Association. Iain Hardie studied history at Gonville and Caius College, Cambridge and spent eighteen years in the investment banking industry in London and Hong Kong, specializing in bond issuance for emerging-market governments. He is now a Research Fellow at the University of Edinburgh. His main interest is in the governance issues raised by the influence of global markets on government policy, particularly in emerging markets. Donald MacKenzie works in science and technology studies and in the social studies of finance. He holds a personal chair in sociology at the University of Edinburgh, where he has taught since 1975. His books include Inventing accuracy: A historical sociology of nuclear missile guidance (Cambridge, MA: MIT Press, 1981) and An engine, not a camera: How financial models shape markets (Cambridge, MA: MIT Press, forthcoming spring 2006).
ABSTRACT Describes the addition of environmental, social and governance (ESG) performance indicat... more ABSTRACT Describes the addition of environmental, social and governance (ESG) performance indicators to the Bloomberg terminal. The initiative grew out of Bloomberg's broader sustainability initiatives and is an example of how committed employees can create positive social change within organizations. Issues highlighted in the case for discussion include: How can committed employees implement an innovative sustainability initiative within a large corporation? How can ESG data be more strategic for both Bloomberg and investors? And finally: How should the ESG data industry be structured, and what impact does ESG data have on the future institutionalization of sustainability? Learning Objective: To examine organizational and institutional change process in the sustainability domain, and secondly the importance and economic impact of environmental, social and governance (ESG) metrics for diverse corporate stakeholders.
Our task in this paper is to analyze the organization of trading in the era of quantitative finan... more Our task in this paper is to analyze the organization of trading in the era of quantitative finance. To do so, we conduct an ethnography of arbitrage, the trading strategy that best exemplifies finance in the wa ke of the quantitative revolution. In contrast to value and momentum investing, we argue, arbitrage involves an art of association -the construction of equivalence (comparability) of properties across different assets. In place of essential or relationa l 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.
Our task in this paper is to analyze the organization of trading in the era of quantitative finan... more Our task in this paper is to analyze the organization of trading in the era of quantitative finance. To do so, 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 equivalence (comparability) of properties 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.
In 1999, Carruthers and Stinchcombe provided the classic discussion of 'the social structure of l... more In 1999, Carruthers and Stinchcombe provided the classic discussion of 'the social structure of liquidity': the institutional arrangements that support markets in which 'exchange occurs easily and frequently ' (1999, p. 353). Our argument in this paper is that the material aspects of these arrangementsand particularly the materiality of prices -need far closer attention than they normally receive. We develop this argument by highlighting two features of new assemblages that have been created in financial markets since 1999.
How does an organization cope with extreme uncertainty? In this paper we study the case of a Wall... more How does an organization cope with extreme uncertainty? In this paper we study the case of a Wall Street investment bank that lost its entire office and trading technology in the terrorist attack of September 11 th . The traders survived, but were forced into a mandatory exile to a makeshift trading room in the suburbs. In the six months the traders spent there, they had to navigate successive waves of uncertainty, including existential anxiety (will I die in the next attack?), questions of professional identity (what does it mean to be a Wall Street trader outside Wall Street?), uncertainty about the future of the firm (will it fold?), and ambiguities about the future re-location of the firm. In contrast with the well-studied strategic challenge of dealing with uncertainty in the environment, the company had to deal with fears and insecurities inside as well as outside it. To overcome then, it took care to help traders maintain their identities and ability to engage in sense-making by restoring the network of people, tools, and places that constituted them.
How do organizations cope with extraordinary crisis? In this paper we study the case of a Wall St... more How do organizations cope with extraordinary crisis? In this paper we study the case of a Wall Street investment bank that lost its entire office and trading technology in the terrorist attack of September 11. th The paper documents the six months the traders spent in a makeshift trading room in the New Jersey suburbs as they had to deal with fears and insecurities inside the company as well as outside it: anxiety about additional attacks, questions of professional identity, doubts about the future of the firm, and ambiguities about the future re-location of the trading room. The trading room did not face one crisisthe immediate aftermath of September 11 th -but many. A given crisis was resolved by restoring identities; but identities, once restored, redefined the situation and lead to new crises. That is, the successive waves of crisis were produced by each success in managing crisis.
ABSTRACT How does automation reshape markets? Existing sociological studies have argued that mark... more ABSTRACT How does automation reshape markets? Existing sociological studies have argued that market automation need not entail a dilution of social relations, but the empirical evidence is inconclusive. Our multi-period ethnography of the New York Stock Exchange addresses this gap by exploring how the NYSE automated trading while preserving its floor intermediaries. Our study reports on observations in 2003 before automation was introduced, outlining the functions traditionally played by specialists and floor brokers. It then analyzes how the Exchange preserved these intermediary roles in 2006-08 as it introduced algorithmic order matching, and proposes the notion of folding to denote the process of automating a market while preserving its social structure. Finally, our analysis of the Flash Crash in 2010 suggests that folding allowed the NYSE to outperform its floorless rivals.
... L'innovazione impli-ca un tipo di ricerca particolare – non come quelle da cui si otteng... more ... L'innovazione impli-ca un tipo di ricerca particolare – non come quelle da cui si ottengono lecoordinate di un obiettivo noto o da ... Al contrario, i trader che si occupano dell'arbitrag-gio sulle obbligazioni convertibili sfruttano il valore delle «clausole di convertibilità» previste per ...
Tools of the Trade: the Socio-Technology of Arbitrage in a Wall Street Trading Room' , won the 20... more Tools of the Trade: the Socio-Technology of Arbitrage in a Wall Street Trading Room' , won the 2005 Outstanding Paper of the Communications and Information Technology division of the American Sociological Association. Iain Hardie studied history at Gonville and Caius College, Cambridge and spent eighteen years in the investment banking industry in London and Hong Kong, specializing in bond issuance for emerging-market governments. He is now a Research Fellow at the University of Edinburgh. His main interest is in the governance issues raised by the influence of global markets on government policy, particularly in emerging markets. Donald MacKenzie works in science and technology studies and in the social studies of finance. He holds a personal chair in sociology at the University of Edinburgh, where he has taught since 1975. His books include Inventing accuracy: A historical sociology of nuclear missile guidance (Cambridge, MA: MIT Press, 1981) and An engine, not a camera: How financial models shape markets (Cambridge, MA: MIT Press, forthcoming spring 2006).
ABSTRACT Describes the addition of environmental, social and governance (ESG) performance indicat... more ABSTRACT Describes the addition of environmental, social and governance (ESG) performance indicators to the Bloomberg terminal. The initiative grew out of Bloomberg's broader sustainability initiatives and is an example of how committed employees can create positive social change within organizations. Issues highlighted in the case for discussion include: How can committed employees implement an innovative sustainability initiative within a large corporation? How can ESG data be more strategic for both Bloomberg and investors? And finally: How should the ESG data industry be structured, and what impact does ESG data have on the future institutionalization of sustainability? Learning Objective: To examine organizational and institutional change process in the sustainability domain, and secondly the importance and economic impact of environmental, social and governance (ESG) metrics for diverse corporate stakeholders.
Our task in this paper is to analyze the organization of trading in the era of quantitative finan... more Our task in this paper is to analyze the organization of trading in the era of quantitative finance. To do so, we conduct an ethnography of arbitrage, the trading strategy that best exemplifies finance in the wa ke of the quantitative revolution. In contrast to value and momentum investing, we argue, arbitrage involves an art of association -the construction of equivalence (comparability) of properties across different assets. In place of essential or relationa l 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.
Our task in this paper is to analyze the organization of trading in the era of quantitative finan... more Our task in this paper is to analyze the organization of trading in the era of quantitative finance. To do so, 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 equivalence (comparability) of properties 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.
In 1999, Carruthers and Stinchcombe provided the classic discussion of 'the social structure of l... more In 1999, Carruthers and Stinchcombe provided the classic discussion of 'the social structure of liquidity': the institutional arrangements that support markets in which 'exchange occurs easily and frequently ' (1999, p. 353). Our argument in this paper is that the material aspects of these arrangementsand particularly the materiality of prices -need far closer attention than they normally receive. We develop this argument by highlighting two features of new assemblages that have been created in financial markets since 1999.
How does an organization cope with extreme uncertainty? In this paper we study the case of a Wall... more How does an organization cope with extreme uncertainty? In this paper we study the case of a Wall Street investment bank that lost its entire office and trading technology in the terrorist attack of September 11 th . The traders survived, but were forced into a mandatory exile to a makeshift trading room in the suburbs. In the six months the traders spent there, they had to navigate successive waves of uncertainty, including existential anxiety (will I die in the next attack?), questions of professional identity (what does it mean to be a Wall Street trader outside Wall Street?), uncertainty about the future of the firm (will it fold?), and ambiguities about the future re-location of the firm. In contrast with the well-studied strategic challenge of dealing with uncertainty in the environment, the company had to deal with fears and insecurities inside as well as outside it. To overcome then, it took care to help traders maintain their identities and ability to engage in sense-making by restoring the network of people, tools, and places that constituted them.
How do organizations cope with extraordinary crisis? In this paper we study the case of a Wall St... more How do organizations cope with extraordinary crisis? In this paper we study the case of a Wall Street investment bank that lost its entire office and trading technology in the terrorist attack of September 11. th The paper documents the six months the traders spent in a makeshift trading room in the New Jersey suburbs as they had to deal with fears and insecurities inside the company as well as outside it: anxiety about additional attacks, questions of professional identity, doubts about the future of the firm, and ambiguities about the future re-location of the trading room. The trading room did not face one crisisthe immediate aftermath of September 11 th -but many. A given crisis was resolved by restoring identities; but identities, once restored, redefined the situation and lead to new crises. That is, the successive waves of crisis were produced by each success in managing crisis.
ABSTRACT How does automation reshape markets? Existing sociological studies have argued that mark... more ABSTRACT How does automation reshape markets? Existing sociological studies have argued that market automation need not entail a dilution of social relations, but the empirical evidence is inconclusive. Our multi-period ethnography of the New York Stock Exchange addresses this gap by exploring how the NYSE automated trading while preserving its floor intermediaries. Our study reports on observations in 2003 before automation was introduced, outlining the functions traditionally played by specialists and floor brokers. It then analyzes how the Exchange preserved these intermediary roles in 2006-08 as it introduced algorithmic order matching, and proposes the notion of folding to denote the process of automating a market while preserving its social structure. Finally, our analysis of the Flash Crash in 2010 suggests that folding allowed the NYSE to outperform its floorless rivals.
... L'innovazione impli-ca un tipo di ricerca particolare – non come quelle da cui si otteng... more ... L'innovazione impli-ca un tipo di ricerca particolare – non come quelle da cui si ottengono lecoordinate di un obiettivo noto o da ... Al contrario, i trader che si occupano dell'arbitrag-gio sulle obbligazioni convertibili sfruttano il valore delle «clausole di convertibilità» previste per ...
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