Michael M. Lewis

Argues that post-crisis Wall Street continues to be controlled by large banks and explains how a small, diverse group of Wall Street men have banded together to reform the financial markets.

A Wall Street Revolt

Flash Boys

Michael Lewis

matej yangwao

** spoiler alert **
           Good intro book if you're want to understand front running, rebate arbitrage and slow market arbitrage.
Especially if you're coming from web3 space and know from history perspective what's had been before MEV on Ethereum and why it's real opportunity run arbitrage and front run others.


>The speed of light in fiber allows a trader to send an order to New York from Chicago and back in 12 milliseconds.

>The fastest route traders have been able to access moves at 14.65 milliseconds on what they refer to as The Gold Route.

>The transformation of the stock market is such that what you see on your screen is an illusion due to changes that occur in milliseconds.

>Someone out there was using the fact that stock market orders arrived at different times at different exchanges to front-run orders from one market to another.

>He knew how information moved between different locations; it traveled in a zig-zag path from one telecom carrier to the next. During a call from New York to Florida, for instance, information moves through multiple pieces of equipment.

>Sergey Aleynikov joined Goldman Sachs to solve three major issues. First, he was to create a means by which translated data from the 13 public exchanges could be viewed as though it was coming from a single stream.

>Front running refers to a situation where a trader running on high-frequency equipment identifies your trading choices from one place and races you to the next place.

>Rebate arbitrage was the second fraudulent trading activity they recognized. This activity involved using the increased complexity of Wall Street to make trades without providing the corresponding liquidity.

>The third and worst trick they identified was “slow market arbitrage.” It occurred when a high-frequency trader was able to see changes in stock exchange rates on one machine and make transactions on another.

The Times, Observer, Financial Times, New Statesman and Times Literary Supplement Books of the Year 2014Michael Lewis, the Master of the Big Story, is back with Flash BoysIf you thought Wall Street was about alpha males standing in trading pits hollering at each other, think again. That world is dead.Now, the world's money is traded by computer code, inside black boxes in heavily guarded buildings. Even the experts entrusted with your cash don't know what's happening to it. And the very few who do aren't about to tell - because they're making a killing.This is a market that's rigged, out of control and out of sight; a market in which the chief need is for speed; and in which traders would sell their grandmothers for a microsecond. Blink, and you'll miss it.In Flash Boys, Michael Lewis tells the explosive story of how one group of ingenious oddballs and misfits set out to expose what was going on. It's the story of what it's like to declare war on some of the richest and most powerful people in the world. It's about taking on an entire system. And it's about the madness that has taken hold of the financial markets today.You won't believe it until you've read it.'I read Michael Lewis for the same reasons I watch Tiger Woods. I'll never play like that. But it's good to be reminded every now and again what genius looks like' - Malcolm Gladwell'Probably the best current writer in America' - Tom WolfeMichael Lewis was born in New Orleans and educated at Princeton University and the London School of Economics. He has written several books including the New York Times bestsellers Liar's Poker, widely considered the book that defined Wall Street during the 1980s, Boomerang and The Big Short, 'probably the single best piece of financial journalism ever written' (Reuters). Lewis is contributing writer for The New York Times Magazine and also writes for Vanity Fair and Portfolio magazine.

Rohit Arondekar

What I really loved about this book was the writing. The narrative was focused on Brad Katsuyama and how he along with others discovered the means through which High-Frequency Trading(HFT) firms were milking the stock market. I had heard of HFT and flash crashes especially the one involving Knight Capital Group but like most financial and economic events didn't probe deeper. 

After reading Flash Boys I have a slightly better understanding of what HFT firms primarily do by which I mean what their main advantage is over traditional traders. Although the book was focused on Brad and the founding of IEX there was still quite a lot of insights and information. What I found interesting is how one of Brad's partner investigated the history and found that this kind of greedy trading strategies have been in use for a long time. Like bugs in a piece of software code, they get patched until the fix is exploited to find more bugs.

I have mixed feelings about HFT and probably need to read more. In a dark way I think it's nice that physicists, mathematicians and scientists are making tons of money even though the means are more than unfair.

I'm looking forward to reading more books by Michael Lewis and also on the topic of HFT.

Chris Raastad

I love this book. It's a perfect balance of techie and thriller. I received this book after we hosted a "Break the Banks" hackathon right in front of the charging bull a stone throw from Wall Street. This book is a deep dive into the "problem" of high-frequency trading, and how the key players built IEX as a solution. It's a fascinating story and definitely worth a read if you're interested in technology or finance.

Cindy Lieberman

Well written although somewhat repetitive narrative about corrupt (yet legal) Wall Street trading practices.

Maggie Delano

As someone completely unfamiliar with High Frequency Trading (HFT) before reading this book, I found this book easy to digest. After reading it, I have an understanding of the gist of HFT strategies and how HFT firms take advantage of investors. It's even more clear to me now how incentivized banks are to screw the people they claim to represent, and how hard it is to change those incentives. 

Michael Lewis introduces a series of individuals chapter by chapter, as these individuals all come together to start and build the IEX stock exchange - an alternative exchange that uses information elucidated earlier in the book to create an exchange that defangs high frequency traders. 

While I found the narrative structure to be very compelling and fun to read, it is inherently limited in scope to the people Lewis is writing about. I still feel just in the dark about who is really to blame for HFT as I was before reading the book. I would have liked to see more of an "inside story." The individuals working for IEX are all cast as outsiders working together to solve the puzzle of HFT, rather than as clear authorities on the subject.

I also found Lewis' portrayal of some of the characters to be over the top. He frames some of the individuals' paths to their employment at IEX as a patriotic "call of duty" post-9/11 that I found to be pretty excessive. Effective for story telling, sure, but less so for reporting on the facts.

Overall, I found this book to be a fun, easy read and a nice introduction to the topic of HFT. However, if I really wanted more of the facts, I might look elsewhere.

#1 New York Times Bestseller — With a new Afterword "Guaranteed to make blood boil." —Janet Maslin, New York Times In Michael Lewis's game-changing bestseller, a small group of Wall Street iconoclasts realize that the U.S. stock market has been rigged for the benefit of insiders. They band together—some of them walking away from seven-figure salaries—to investigate, expose, and reform the insidious new ways that Wall Street generates profits. If you have any contact with the market, even a retirement account, this story is happening to you.

Flash Boys: A Wall Street Revolt

Chris Aldrich

Read in two all-too-quick sittings. The world needs more excellent non-fiction writers like this who can take complex stories and tell them so well. I agree wholeheartedly with his overarching thesis that our economic system should be not only more transparent, but easier to understand for the everyday citizen.

Omar Fernandez

Great to understand high frequency trading and how within wall street the tendency is to chat the system rather than fixing it.

Adam

If you ever listened to the Radiolab episode about high frequency trading, you should give this a listen. Lewis goes into much more detail on the same subject, including the concept of "dark pools" which I was unaware of. It's crazy how differeny things are from when I learned about the stock market in high school, but this one does an entertaining job of explaining why.

Flash Boys A Wall Street Revolt

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