Author Michael Lewis Explains Stock Market Rigged By High Frequency Trading

| by Will Hagle

Acclaimed author and journalist Michael Lewis has written a new book about the American financial industry. The book, entitled Flash Boys: Wall Street Revolt, was published today through W.W. Norton & Company. 

In anticipation of the book’s publication, Lewis appeared on 60 Minutes this Sunday to discuss the ways in which the stock market has been rigged to benefit insiders of the financial world. 

Lewis spoke about the effect of high-speed electronic trading firms that profit from using an unfair speed advantage to purchase and resell stocks after anticipating orders.

“They are able to identify your desire to buy shares in Microsoft and buy them in front of you and sell them back to you at a higher price,” Lewis said, “This speed advantage that the faster traders have is milliseconds, some of it is fractions of milliseconds.” 

According to the Guardian, this type of high-frequency trading comprises more than half of all U.S. trading volume. Firms with this technology are able to anticipate a stock order and more quickly purchase those stocks from other exchanges, selling them back to the buyer at a slightly higher cost. 

Flash Boys focuses on a group of Wall St traders that discover the flaws in high speed trading and set out to reform the practice in order to make trading more transparent.

Flash Boys is not the first financial book Lewis has written, as his semi-autobiographical book Liar’s Poker described his own experiences as a Wall Street bond salesman while The Big Short detailed the housing and credit bubble of the late 2000s.