Member-only story
High-Frequency Trading and the Flash Boys
“Flash Boys: A Wall Street Revolt” by Michael Lewis is a non-fiction book that investigates the rise of high-frequency trading (HFT) and its impact on the financial markets.
The book follows a group of traders, computer programmers, and academics as they work to expose the ways in which HFT can be used to exploit market inefficiencies and rig the system in favor of big Wall Street firms.
Lewis tells the story through the eyes of several key players, including Brad Katsuyama, a trader who becomes convinced that the stock market is rigged against ordinary investors. Katsuyama sets out to create a new kind of stock exchange, one that is designed to level the playing field and prevent HFT firms from taking advantage of other traders.
The book provides a detailed look at the technological arms race among traders, where milliseconds can make the difference between profit and loss.
HFT firms use sophisticated algorithms to execute trades at lightning-fast speeds, often with the help of high-speed fiber optic cables that are laid along the most direct paths between financial centers.
They also use complex market data feeds to detect and exploit tiny price differences across multiple exchanges.
