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Date Finished: December 18th, 2017
Reading Time: Three days
I almost pulled the trigger on reading this book several times. I always held off due to tepid reviews. This was mostly a good thing only because, in the meantime, I’ve been able to spend my entire adult working life at a trading firm. The semblance of interest I had in the industry four years ago has become daily exposure which has allowed me to consume and critique Inside the Black Box while not coming off as a nimrod.
If there’s a reason to be disappointed that it took me so long to read this, it’s that I hate knowing that I was swayed by reviews written by people who, in aggregate, misled me regarding the quality of the book. Most negative reviews are nonsensical.
The title promises a simple guide and that’s what Rishi Narang delivers. There aren’t deep dives into market microstructure, regulatory issues, or the nuts and bolts of specific trading strategies. There aren’t lectures on Knight Capital or LTCM (though the companies appear somewhat frequently) and the author doesn’t stoop to referencing as many books as possible just to show you how smart he is. Though he does provide an elegant distinction between high-frequency trading and ultra-high-frequency trading, a topic I have struggled to explain clearly for some time. If you’re a true-to-life quant, this might not be much more than a refresher, but there is something everyone can take away from this book.
For me, the book filled in most of the blanks in my understanding of the industry. Reading about market microstructure is not fun—even when supplemented with related work experience—and the popular novels I’ve read haven’t taught me much at all (while often offering critiques that Narang rebuffs quite well). This book managed to combine the flow and enjoyability of a novel with the lasting value of a more academic work. It should be near the top of the summer reading list for every firm in the industry.