web 2.0 and wallstreet

27 March, 2007

Another part of the ‘briefing’ today was about how web 2.0 and wallstreet are related. Seems like a far stretch, but actually wallstreet turns out to be fairly connected (yes, that is an understatement). Nowadays trading takes place within (a) millisecond(s), and no that is not overstating it.

Peter Bloom and Bill Janeway took a seat on the couch, and rapidly fired interesting pieces of information about wallstreet into the audience. The pace was high and the concepts abstract. The main issue seems to be that trading information has become invaluable. This in turn means that a lot is being done to make sure that information does not fall into the hands of people (or bots for that matter) that shouldn’t know. The study in this area is called ‘behavioral finance‘.

Not just pace of this talk was high, but the pace of trading is rapidly changing. A couple of years ago guarantees for trades were in the order of seconds, now their almost at a sub-millisecond level. There are trade brokers, who operate at about 1000 trades per second. What happens is that the time to change a mistake (which sometimes happens) goes to zero. This has great implications in the world, where computers are taking over from humans.

Tim O’Reilly tried tying this back to web 2.0, which seemed a bit artificial. Although it would be interesting to be able to trade in google adwords.

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