Throwing Rocks At The Google Bus: How Growth Became The Enemy Of Prosperity - Plot & Excerpts
Professional traders face similar challenges in the digitized environment. Like those in other disrupted industries, many finance workers have been replaced by networks and computers. Human stockbrokers, in addition to providing access to markets, used to be responsible for giving clients the best information on a stock or sector, as well as advice and numbers on allocations and future earnings. Trades then went through the specialists—designated market makers—who owned a pool of a particular stock, which they used to fill orders when there was no ready counterparty. They were required to serve as buyers of last resort, preventing a stock from crashing unnecessarily due to a temporary lack of liquidity. Yes, they made money doing this, exploiting their privileged position on the trading floor to buy low and sell high. But their activity reduced volatility and kept markets more consistently liquid and orderly. Thanks to the net, customers can now access markets—or at least virtual trading desks—directly.
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