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December 1, 2010

A Fast, Small World

By Michael Scotti

According to the Chinese calendar, 2010 is the year of the tiger. For Traders Magazine and its readership, 2010's defining moment was the "flash crash." On May 6, traders witnessed the fastest market correction and rebound in history. It got everyone's attention--from investors to regulators to lawmakers. The flash crash led to hearings and a regulatory report, as well as remedies from the industry like unified circuit breakers and a proposal to put collars on orders.

Michael Scotti, Editorial Director

The flash crash leads this issue's list of 2010's top stories. High-frequency trading has been another hot story. Many called into question the role these controversial rapid-fire traders played in the flash crash. Scapegoat or not, those employing HFT strategies had been under fire, and have became more visible in defending themselves.

Much of our coverage this year involved high-frequency trading. That included two cover stories, "Lying in Wait: Rapid-Fire Traders Use Pattern-Recognition Tools to Exploit Large Orders," and "Not So Fast!: Regulators and Others Question the Need to Trade at Hyper-Fast Speeds." It was great to receive pro and con comments from professionals on both sides.

My favorite trading story in the last year is a personal one. I was at a resort outside of Medellin, Colombia--a beautiful hotel in tropical Santa Fe, the old Colonial capital of the state of Antioquia. I was told that a regular there who lived in town had a brother involved in the "bolsa de valores en los Estados Unidos," or the U.S. stock market. I half paid attention--Wall Street is a big place. I eventually met the man, Victor. He was about 40 years old. To my surprise, Victor had lived in the U.S. almost his entire life. He married a local woman and had moved to Santa Fe only months earlier. He gave up a corporate sales job in the States. We hit it off. It turned out that for several years he lived in the town next to me in central New Jersey. When the conversation turned to his brother, he said Willie was a trader. When I asked what his brother traded, he responded with an answer that nearly floored me: "Stocks, he's a block trader." Of all the asset classes that exist, he was a stock guy. I sent an email to one of my staffers, who confirmed what I suspected: Victor's brother, Willie, had been in Traders Magazine's On the Move section in the last year. Small world, isn't it?

Michael Scotti

Editorial Director

 

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