ShmoopTube

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Finance a la shmoop what is program trading? okay well watch two episodes of

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Big Bang Theory if you first watch one episode of Keeping Up with the [Man and woman watching TV]

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Kardashians deal alright no different kind of program trading, program trades

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in a Wall Street sense are run by a computer program, hence the catchy name

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and it's also called the black box like a program kicks out that if the S&P 500

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is down 0.3 percent in an hour and the US dollar has risen relative to the

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pound and goog is outperforming the tech index and the moon is in the seventh

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house and Jupiter is aligned with Mars then short a million shares of GE like

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that would be something that the box would tell you or something like that

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and there are a ton of weird mathy things behind the rationale for each of [Math formulas appear]

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these trades some of it makes sense to normal people but most of it needs three

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PhDs in math and physics and other stuff to translate rationally

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well the dangerous thing here about program trades is that usually there is

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no human involved when they execute a trade that is it's just computers

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talking to other computers but thankfully computers never have glitches [Computer chip blowing off steam]

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right they never have mistakes and things generally always run smoothly

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when computers are involved right well this is a really smart way to manage

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your retirement money just give it all to a black box and assume the guys who

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wrote the algorithm knew what they were doing or maybe not [Hacker using a PC]

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