Noise
Living and Trading in Electronic Finance
We often think of finance as a glamorous world, a place where investment bankers amass huge profits in gleaming downtown skyscrapers. There's another side to finance, though – the millions of amateurs who log on to their computers every day to make their own trades. The shocking truth, however, is that less than 2% of these amateur traders make a consistent profit. Why, then, do they do it? In "Noise", Alex Preda explores the world of the people who trade even when by all measures they would be better off not trading. Based on firsthand observations, interviews with traders and brokers, and on international direct trading experience, Preda's fascinating ethnography investigates how ordinary people take up financial trading, how they form communities of their own behind their computer screens, and how electronic finance encourages them to trade more and more frequently. Along the way, Preda finds the answer to the paradox of amateur trading – the traders aren't so much seeking monetary rewards in the financial markets, rather the trading itself helps them to fulfill their own personal goals and aspirations.
About the Author
Alex Preda is professor at King's College London. He is the author of "Framing Finance: The Boundaries of Markets and Modern Capitalism", also published by the University of Chicago Press, and co-editor of the "Oxford Handbook of the Sociology of Finance".
Reviews
"Preda's 'Noise' is a most rare volume. In elegant writing, Preda is able to explain the complexity of electronic trading, revealing that what has often been described as random perturbations, enacted by ignorant traders, is, in fact, highly organized, intensely social, and fully cultural. What might be described as mere noise, seemingly unintelligible, is integral to how markets operate, and, in Preda's telling, markets could not operate efficiently without such seeming inefficiency. This book is truly eye-opening in its willingness to overturn the assumptions of a rationalist market fundamentalism. It is a most important contribution to economic sociology and the understanding of finance" – Gary Alan Fine, author of "Players and Pawns: How Chess Builds Community and Culture"
"With keen insight and elegant style, Preda takes us into a memorable exploration of twenty-first century electronic finance. Challenging stereotypes of atomistic financial markets, 'Noise' captures with fascinating ethnographic detail the connected social world of traders. A welcome contribution to the sociology of economic life, the book will also engage a general audience eager to understand how finance really works" – Viviana A. Zelizer, author of "Economic Lives: How Culture Shapes the Economy"
"What leads normal people to trade stocks with their own money, even though they are likely to lose? If they keep losing, why don't they quit? And how do we connect with people for whom some of their most important actions consist of tapping at a keyboard and staring at a screen? Preda reveals the hidden abode of the 'noise trader' in a sympathetic first-person account of this durable and even essential part of our financial markets" – Jerry Davis, author of "The Vanishing American Corporation"
