Floor Rules

This insightful book, Floor Rules, uncovers the dual nature of market regulations and the influence of insider rules on financial systems.

In Floor Rules, Mark W. Geiger provides a fascinating exploration of the hidden dynamics that govern financial markets. He argues that the perception of markets as chaotic and irrational stems from the coexistence of two distinct sets of rules: the official regulations established by authorities and the unofficial, often unwritten, floor rules that insiders adhere to. While breaking official rules can result in penalties, violating floor rules leads to social ostracism, illustrating the importance of these informal guidelines in maintaining order among traders.

Geiger delves into compelling narratives of market disruptions where these insider rules played a pivotal role, shedding light on how they shape the behavior of market participants. By focusing on the norms, customs, and values of the insiders, Floor Rules reveals the intricate web of influence wielded by a small group of individuals who dominate trading environments. This examination challenges the notion that financial markets operate in a purely rational manner, instead highlighting the complexities that underlie their functioning.

Through a historical lens, the book traces the evolution of the culture surrounding financial markets, offering insights into how these practices have developed over time. Geiger's analysis also addresses the implications of technological advancements on this unique culture, prompting readers to consider how the future of trading may be affected. Floor Rules ultimately provides a nuanced understanding of the self-governing nature of markets, making it a thought-provoking read for anyone interested in finance and economics.