How a Supercomputer Is Ready to Mint Money Out of Mexico's Stock Market Benjamin Bain - Bloomberg
go to original June 9, 2016

Alberto Alonso (Susana Gonzalez/Bloomberg)

On a gated residential street about an hour’s drive south of Mexico City’s main business district lives Breogan, a $350,000 computer that Alberto Alonso built to shake up the nation’s stock market.

Alonso, 32, created the machine and the software it runs with a squad of eggheads including a trained atmospheric physicist and a robotics specialist. The algorithm the device uses automatically buys and sells shares when it spots an alluring trade, aiming to disrupt a market where business is still often done with a phone rather than a computer.

“Mexico still isn’t a place for geeks, but give me a chance,” Alonso, whose jeans and untucked shirt gave him a look closer to a grad student than Wall Street trader, said in an interview.

Alonso is seeking to transform a market that trails the rest of the world when it comes to computer-driven stock trading. While the Bolsa Mexicana de Valores SAB has actively courted algorithmic traders, the bourse is at least a decade behind the U.S. in terms of automation, according to Larry Tabb, the founder of research firm Tabb Group.

Alonso, who is operating his computer in test mode with a limited number of stocks, says that a quirk in Mexico’s market means he’ll be able to mint money with his computer once he has it fully running. About a quarter of local trading volume stems from companies that also trade in other countries - including household names like Apple Inc. and Facebook Inc. - opening up an arbitrage opportunity for computers fast enough to spot discrepancies in stock prices denominated in pesos and dollars. In theory, any gap is a chance to make money on a bet the differential will narrow.

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