Perre Peraj
Word Count: 500
From calling brokers to electronically inputting orders in the comfort of our own home, we have come a long way in technological advancements in the financial sector. And, as businesses expand and become more globalized, our markets will do the same. Although international markets may not be as developed as our markets, IT is playing a huge role in the development.
Interestingly enough, Bloomberg just published an article today about a Japanese man known as CIS, a 35-year-old day trader who preserves his anonymity but claims he made 6 billion yen after taxes in 2013 betting on Japanese stocks from his own home-computer. The role of IT proves essential to his success, for if he did not have the technology or software to trade, he would have no advantage against the other players in the market. Not only does it deem essential, but CIS took advantage byusing his friend’s order entry software to ease his order flow, which I will get into later.
The first role IT played in his success was the evolution of computers and internet connectivity. If it were not for the ease and quickness of home internet, CIS would not have been involved in the market and would probably still be playing the online fantasy video games he plays day in and out. All while professional investors went to an office in a suit and whatnot, CIS rolls out of bed, probably in pajamas, and glues his eyes on his own computer screens. The quick internet speeds allow him to easily connect to markets (Japanese markets in his case), and trade quickly.
Japan’s market is not as liquid as ours, but is still heavily monitored. CIS, within 10 minutes, became 600 million yen richer (about $5.5mn) by quickly spotting an incorrectly typed order in the market. CIS pounced on the order and was able to take advantage of the mistake Mizuho Securities Co. made.
In addition to comfort of working from his home, CIS not only glues his eyes to the stock market, but also to chat rooms with friends and other traders. These online chat rooms allowed traders to be connected with each other and share time sensitive information in seconds. It has become an online world where almost everyone knows each other through some degree of separation. Also, in some way, being an influential person sending influential messages in the chat room can definitely move the market in seconds. There are other traders glued to the chat room as well hoping to get in and out of opportunities faster than everyone else.
IT actually plays a role in building off of the need to get in and out of these opportunities as fast as possible. A man named Masahiro Kawata designed a trading interface for Japanese traders that allows for easier and faster order entry. It’s called T-Plus Plus Speedy Stock Order Tool. It is meant for the most serious day traders that allows them to shave seconds off of their order process.
Link: http://www.bloomberg.com/news/2014-09-25/mystery-man-moving-japan-made-more-than-1-million-trades.html
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