"How about a nice game of chess?"
—WOPR computer in War Games
There used to be two market structures for U.S. equity traders to contend with: the NYSE (for listed stocks) and NASDAQ. Recent counts put the number at roughly 40. Many are sources of dark liquidity, which sounds like red wine, but actually refers to market systems that allow (or require) hidden interest.
This chapter goes into more depth on the flowering of electronic market access. Programs that started out as simple electronic order pads so brokers wouldn't have to bother with their paper slips for small orders are now complex software entities that game against each other in an ever more complex and fragmented equity market.
Here we look at how the meanest, smartest algorithms (aka algos) on the street got that way, and at the even meaner, smarter algorithms that will replace them. The Cold War is history, but there's an arms race underway in algo trading. It started in the 1980s, and shows no signs of slowing down.