Traders disclose order flow through deals to read the market as it forms

Evidence

Personal knowledge is also involved in the relationships described and defines them as business connections that are, at the same time, personal ties. The two components run together, and they also become deeply intertwined with the informational content we have described. In the deal discussed above, this informational content resides in the observations that the Zurich trader offers in lines 3 and 10–12, but it also resides in the deal itself, which contributes to the Zurich trader’s picture of the market by telling him more about how a significant market participant moves his positions and places his bets. … By linking themselves in deals with important market actors, traders are able to track the market “as it is made”; they gain bits and pieces of information before others and are able to assess future trading opportunities and constraints from the positions that their counterparties have taken. In the above deal, the Zurich trader returns the gift by offering a good price, as well as local knowledge from the trading room in Zurich and his position in the screen world. — Karin Knorr Cetina & Urs Bruegger, Global Microstructures, 140

Categorization

• XREF: Connects to the reader’s finance-ethnography knowledge of how off-screen relationship trading (e.g. floor/open-outcry studies, or the ‘information as gift’ literature on reciprocity) parallels screen-based market microstructure. — connects to: Trading-floor talk is dominated by dealing and information exchanges. — Karin Knorr Cetina & Urs Bruegger, Global Microstructures: The Virtual…, 57; Traders manipulate spreads, delays, and prices within a status-governed relational market. — Karin Knorr Cetina & Urs Bruegger, Global Microstructures: The Virtual…, 117; Market makers front-ran LTCM’s futures purchases by reading pit activity — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1070
• DEFINE: Clarifies the mechanism by which informational content is carried not only in explicit messages but in the deal itself — a useful conceptual frame for analyzing market communication.

Related

• Trading-floor talk is dominated by dealing and information exchanges. (similarity 0.83)
• Traders manipulate spreads, delays, and prices within a status-governed relational market. (similarity 0.79)
• Traders depend on continuous information commerce, not search, to act in split seconds (similarity 0.78)