Insider Information: The Ethicality of the High Frequency Trading Industry

This study explores the ethical perceptions of employees in the financial industry. Focusing on the high frequency trading (HFT) industry, it analyses a series of interviews with HFT employees (managers, computer programmers and traders). It shows that regulations and firm rules profoundly affect HFT practices. However, they do not provide employees with answers for their ethical questions. To judge the ethicality of HFT, employees choose reference stakeholder groups and assess the way HFT impacts them. The perception that HFT has a positive effect on stakeholder groups is associated with moral satisfaction, whereas the perception that it has a negative effect is related to emotional detachment, sense of meaninglessness and turnover intent. The high variance in employees’ choices of stakeholder reference groups emphasizes the subjectivity and uncertainty that HFT ethicality entails. Therefore, this study suggests that the financial industry may lack moral leadership. It makes empirical and theoretical contributions to the ‘business ethics as practice’ theory and examines management and regulatory applications

Rise of the Androids: The Reflection of Developers’ Characteristics in Computerized Systems

Due to their speed and accuracy, computerized decision-making and data-analysis systems are often perceived to be close to the ideal of unbounded rationality. Challenging this perception, this study explores the possibility that computerized systems reflect the individual characteristics of the developers who have designed and realized them. Through the analysis of interviews with high-frequency trading system developers and a survey of software developers working in diverse industries, it shows that developers’ characteristics, which have been related to bounded rationality (e.g. experience and expertise), influence their codes’ performance and errors. Computer codes also reflect the personal circumstances of the developers (e.g. deadlines and stress), and their values. However, whereas some developers value code characteristics that are congruent with the ideal of unbounded rationality, including speed and accuracy, others aim to achieve characteristics that could be incongruent with it (e.g. code readability and modularity). Developers’ roles and organizational practices, such as testing procedures and code reviews, limit the expression of their characteristics in their codes. Nevertheless, developers can be often identified by reading the codes. Highlighting that developers transfer some of their characteristics to their codes, this study identifies elements of bounded rationality in decision-making systems and extends organizational decision-making research

Financial Applications of Human Perception of Fractal Time Series

The purpose of this thesis is to explore the interaction between people’s financial behaviour and the market’s fractal characteristics. In particular, I have been interested in the Hurst exponent, a measure of a series’ fractal dimension and autocorrelation. In Chapter 2 I show that people exhibit a high level of sensitivity to the Hurst exponent of visually presented graphs representing price series. I explain this sensitivity using two types of cues: the illuminance of the graphs, and the characteristic of the price change series. I further show that people can learn how to identify the Hurst exponents of fractal graphs when feedback about the correct values of the Hurst exponent is given. In Chapter 3 I investigate the relationship between risk perception and Hurst exponent. I show that people assess risk of investment in an asset according to the Hurst exponent of its price graph if it is presented along with its price change series. Analysis reveals that buy/sell decisions also depend on the Hurst exponent of the graphs. In Chapter 4 I study forecasts from financial graphs. I show that to produce forecasts, people imitate perceived noise and signals of data series. People’s forecasts depend on certain personality traits and dispositions. Similar results were obtained for experts. In Chapter 5 I explore the way people integrate visually presented price series with news. I find that people’s financial decisions are influenced by news more than the average trend of the graphs. In the case of positive trend, there is a correlation between financial forecasts and decisions. Finally, in Chapter 6 I show that the way people perceive fractal time series is correlated with the Hurst exponent of the graphs. I use the findings of the thesis to describe a possible mechanism which preserves the fractal nature of price series

Discovery of Two New Class II Methanol Maser Transitions in G345.01+1.79

We have used the Swedish ESO Submillimetre Telescope (SEST) to search for new class II methanol maser transitions towards the southern source G345.01+1.79. Over a period of 5 days we observed 11 known or predicted class II methanol maser transitions. Emission with the narrow line width and characteristic velocity of class II methanol masers (in this source) was detected in 8 of these transitions, two of which have not previously been reported as masers. The new class II methanol maser transitions are the 13(-3)-12(-4)E transition at 104.1 GHz and the 5(1)-4(2)E transition at 216.9 GHz. Both of these are from transition series for which there are no previous known class II methanol maser transitions. This takes the total number of known class II methanol maser series to 10, and the total number of transitions (or transition groups) to 18. The observed 104.1 GHz maser suggests the presence of two or more regions of masing gas with similar line of sight velocities, but quite different physical conditions. Although these newly discovered transitions are likely to be relatively rare, where they are observed combined studies using the Australia Telescope Compact Array and the Atacama Large Millimeter Array offer the prospect to be able to undertake multi-transition methanol maser studies with unprecedented detail.Comment: 8 pages, 3 figures, accepted for publication in ApJ Letter

The Remarkable Mid-Infrared Jet of Massive Young Stellar Object G35.20-0.74

The young massive stellar object G35.20-0.74 was observed in the mid-infrared using T-ReCS on Gemini South. Previous observations have shown that the near infrared emission has a fan-like morphology that is consistent with emission from the northern lobe of a bipolar radio jet known to be associated with this source. Mid-infrared observations presented in this paper show a monopolar jet-like morphology as well, and it is argued that the mid-infrared emission observed is dominated by thermal continuum emission from dust. The mid-infrared emission nearest the central stellar source is believed to be directly heated dust on the walls of the outflow cavity. The hydroxyl, water, and methanol masers associated with G35.20-0.74 are spatially located along these mid-infrared cavity walls. Narrow jet or outflow cavities such as this may also be the locations of the linear distribution of methanol masers that are found associated with massive young stellar objects. The fact that G35.20-0.74 has mid-infrared emission that is dominated by the outflow, rather than disk emission, is a caution to those that consider mid-infrared emission from young stellar objects as only coming from circumstellar disks.Comment: Accepted for publication in ApJ Letters; 4 pages; 2 figures; a version with full resolution images is available here: http://www.ctio.noao.edu/~debuizer

Database of Molecular Masers and Variable Stars

We present the database of maser sources in H2O, OH and SiO lines that can be used to identify and study variable stars at evolved stages. Detecting the maser emission in H2O, OH and SiO molecules toward infrared-excess objects is one of the methods of identification long-period variables (LPVs, including Miras and Semi-Regular), because these stars exhibit maser activity in their circumstellar shells. Our sample contains 1803 known LPV objects. 46% of these stars (832 objects) manifest maser emission in the line of at least one molecule: H2O, OH or SiO. We use the database of circumstellar masers in order to search for long-periodic variables which are not included in the General Catalogue of Variable Stars (GCVS). Our database contains 4806 objects (3866 objects without associations in GCVS catalog) with maser detection in at least one molecule. Therefore it is possible to use the database in order to locate and study the large sample of long-period variable stars. Entry to the database at http://maserdb.netComment: Accepted for publication in RA

Predatory trading: ethics judgments, legality judgments and investment intentions

Purpose: Predatory trading is a stock market trading technique in which certain market participants exploit information about other market participants' need to trade. Predatory trading often harms others. Hence, this paper examines the determinants and effects of financial practitioners' and lay people's judgments of predatory trading. Specifically, it investigates how the public availability and reliability of the exploited information affect their ethics and legality judgments and how the latter influence their behavioral intentions and regulation support. / Design/methodology/approach: The authors conducted two scenario judgment studies. In the first study, participants were financial practitioners, and in the second – lay people. / Findings: Practitioners often judge predatory trading to be ethical. Practitioners and lay people incorporate in their ethics and legality judgments the public availability of the exploited information but tend to discount the legal reliability criterion. Lay people justify their ethics judgments using harm, legal or profit maximization principles. Practitioners' intentions to engage in predatory trading and lay people's intentions to let predatory fund managers invest their money depend on their judgments, which influence their regulation support. / Originality/value: This paper is the first to explore people's judgments of predatory trading. It highlights that despite the harm that predatory trading involves, practitioners often judge it to be ethical. Although law tends to lag behind financial innovation, people base their judgments and hence also behavioral intentions on their interpretation of the regulation. Hence, it reveals a dark aspect of the relationship between ethics and legality judgments