Capital Account Season 1 Episode 98 From Floppy Disk Crash of '87 to Flash Crash of Today With the Nanex Algo Hunter

From Floppy Disk Crash of '87 to Flash Crash of Today With the Nanex Algo Hunter is the 98th episode of Capital Account's first season. In this episode, host Lauren Lyster interviews Eric Hunsader, the founder of Nanex, a company that specializes in analyzing financial data in real-time.

The discussion begins with Hunsader recounting the infamous Black Monday crash of 1987, which occurred when he was working on Wall Street. He describes how the use of floppy disks at that time made analyzing data difficult, leading to a delay in understanding what was happening in the markets. Hunsader explains that this experience, along with the emergence of new technologies, led him to found Nanex in 2009.

Lyster and Hunsader then dive into the topic of high-frequency trading and its impact on the market. Hunsader shares his concerns about the lack of transparency in this type of trading, which he believes allows for manipulation and can lead to market volatility. He also shares a personal anecdote about how a high-frequency trading algorithm caused a flash crash in 2010.

The conversation then turns towards the technology behind Nanex, specifically the Algo Hunter, which is designed to detect suspicious trading activity. Hunsader explains how the Algo Hunter works and demonstrates how it can identify specific trades that may be indicative of market manipulation.

As the episode progresses, Lyster and Hunsader discuss the role of regulators in overseeing the financial markets. Hunsader expresses his frustration with what he perceives as a lack of action from the Securities and Exchange Commission (SEC), which he believes has allowed for illegal trading activity to continue.

Finally, Lyster and Hunsader discuss the future of the financial industry and how technology will continue to shape it. Hunsader predicts that there will be a greater emphasis on transparency and that individuals will need to be more aware of the risks involved in investing.

Overall, From Floppy Disk Crash of '87 to Flash Crash of Today With the Nanex Algo Hunter provides an engaging and informative look at the evolution of the financial industry and the role of technology in shaping it. Hunsader's insights into high-frequency trading and market manipulation offer a unique perspective on a topic that affects everyone who invests in the stock market.