Academic backtesting used advantages unavailable to actual floor traders, raising the adoption question

Evidence

Galai had, of course, all the advantages of the academic. He was investigating hypothetical trading strategies using past price data supplied on punched cards by the Chicago Board Options Exchange. He had available to him programming assistance and the University of Chicago’s powerful computers. Could the Black-Scholes-Merton model be used not in these favorable circumstances but in the bodily hubbub of a trading floor? — Donald MacKenzie, An Engine, Not a Camera, 711

Categorization

• XREF: The gap between idealized academic computation and ‘the bodily hubbub of a trading floor’ sets up the material/technological dimension of performativity — how models must be made practically usable to shape markets. — connects to: Spreading’s robustness to volatility estimates made it viable for floor traders — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 734

Broader Connections

• Spreading’s robustness to volatility estimates made it viable for floor traders #qualifies (0.85) — Donald MacKenzie, An Engine, Not a Camera, 734