ABSTRACT
In recent years, concerns have been raised over erratic behavior in increasingly high-speed automated markets. Especially the act of spoofing has been an issue of regulatory concern. Regulators read the incentives of single traders and look for motivations in order to judge whether a crime was committed. High-frequency traders are being charged with accusations of intentionally manipulating the markets to act in their favor. With the rise of high-frequency trading (HFT), financial trades are executed by interacting algorithms acting and responding to one another at a time scale that far surpasses human perception. This chapter develops a sociological approach to HFT taking the social interaction between algorithms into consideration. Based on interviews and ethnographic observations among high-frequency traders, the chapter argues that the use of high-speed algorithms and their interactional features creates a situation where spoofing becomes a fundamental mode of operation and not an immoral act that regulators can attribute to one single individual. This calls for a new critical agenda, which has consequences for how we might understand the regulation of algorithmic finance and the possibility of holding non-intentional actors such as interacting algorithms accountable for their actions.
