Flash Boys: A Wall Street Revolt
Hardcover edition
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| Author | Michael Lewis |
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| Country | United States |
| Language | English |
| Subject | High-frequency trading |
| Genre | non-fiction |
| Publisher | W. W. Norton & Company |
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Publication date
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March 31, 2014 |
| Media type | Print, e-book |
| Pages | 288 pp. |
| ISBN | |
| Preceded by | Boomerang |
Flash Boys: A Wall Street Revolt is a book by the American writer Michael Lewis, published by W. W. Norton & Company on March 31, 2014. The book is a non-fiction investigation into the phenomenon of high-frequency trading (HFT) in the US equity market, with the author interviewing and collecting the experiences of several individuals working on Wall Street.” Lewis concludes that HFT is used as a method to front run orders placed by investors. He goes further to suggest that broad technological changes and unethical trading practices have transformed the U.S. stock market from "the world's most public, most democratic, financial market" into a "rigged" market.
The book has drawn criticism from some academics and industry experts, particularly on Lewis's grasp of HFT and other factual inaccuracies in its depiction of trading. Other critics have praised Lewis's explanations of trading concepts and concurred with his criticism of HFT; however, it is suggested that he neglects to pay attention to the larger issue of financial regulation, and had excessively simplified the relationship between various institutions in the financial market. A few executives in the industry have also responded by dismissing the book's content as "closer to fiction".
The book centers on several people, including Sergey Aleynikov, a former programmer for Goldman Sachs, and Bradley Katsuyama, the founder of IEX, the Investors' Exchange.
Flash Boys starts out describing a $300 million project from Spread Networks - the construction of an 827-mile cable that cuts straight through mountains and rivers from Chicago to New Jersey - with the sole goal of reducing the transmission time for data from 17 to 13 milliseconds.
The book takes a look at how electronic trading replaced the trading floor of screaming brokers, slamming telephones and hysteria-inducing ticker tape, and how that change impacted the market. The speed of data is a major theme in the book; the faster the data travels, the better the price of the trade. Lewis claims access to this fiber optic cable, as well as other technologies, presents an opportunity for the market to be controlled even more by the big Wall Street institutions. To counter this disadvantage to investors, Katsuyama bands together a team that sets out to develop a new exchange, called IEX, to make the playing field for trading fairer.
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