Twitter Hoax Shows Growth in Algorithmic Trading

By Geoffrey Rogow

Wall Street Journal wonders who might have been behind the April 2013 hoax-driven “tweet crash” which sent the Dow Jones Industrial Average into a short-lived 145-point plunge. If it wasn’t driven by a major high-speed trading outfit, then by whom? Alexei Miller, Executive VP at DataArt, shares his opinion.

“…the hoax-driven “tweet crash” could go down as a turning point in the power dynamics of trading. It was perhaps a sign that technology has now handed to smaller trading shops the kind of capacity to unleash market moves that previously belonged solely to high-powered hedge funds and other hefty institutions,” writes Rogow.
“Technology in trading has developed to a state where experimenting is very cheap. It used to be the case that a new way of analyzing your portfolio was a year-long project and you had to commit to writing some big checks before you bought anything,” said Alexei Miller, executive vice president of DataArt, a custom software development company. “But now, you have an idea, and for $10,000 you can see if it works out…That used to cost a million bucks.”

View original article or download PDF