REVENGE OF THE NERDS

REUTERS--The outsized growth of high-frequency trading, dark pools of liquidity and high-tech computer algorithms has fundamentally changed the game on Wall Street -- and the psychology of those who work there.

Traditional floor trading "really is an alpha-male activity," said Brett Steenbarger, and an associate professor of psychiatry at State University of New York at Syracuse and an expert in the psychology of trading. "You get these highly competitive people taking a good amount of risk ... It's like being in a locker room. In contrast, computer programmers are almost like a think tank."

Now, with high-frequency trading representing some 60 percent of U.S. stock trades, the atmosphere appears to owe as much to Arthur C. Clarke and artificial intelligence as to Gordon Gekko and the 1987 movie "Wall Street."

"They are introverts, some are socially awkward, and they don't seek publicity and they wear their socks over their pants. They are the type of guys you would see at a Star Wars convention looking for Klingons in the men's room," said Sang Lee of Aite Group.

High-frequency traders are practical, problem-solving people with an engineering background and lots of mechanical pens in their shirt pockets. "It's a very intellectually challenging field -- it's extremely exciting to develop a strategy, implement it and see it make money using taxpayer money," Steenbarger said.

WB7--I said it once and I'll say it again, Revenge of the Nerds (Part I) was the game changer.