From the author of Moneyball, Michael Lewis, comes a work about Wall Street. Flash Boys makies the swagger of traders on Wolf on Wall Street look thoroughly ancient in a financial world now run by techies, grappling with the murky world of high frequency trading.
The idea of high frequency trading (HFT) relies on speed. If the trades can be made by one network faster than any of their competitors, the computer has precious milliseconds to make trades ahead of everyone else and effectively swindle investors before they’ve even noticed. The speed of the trading makes it nearly impossible to restrict, as regulators can’t even process the data to analyse the impact and haven’t legislated against the practice. Hundreds of millions are being secretly spent on gaining these milliseconds in a spirited gold rush that features top secret underground data centres and drilling through rock faces to lay the cable straight for maximum speed. By running rings around other traders, HFTs are extremely secretive and are keeping the market unstable for maximum profit. Our mental image of rolling banners of stock options and barking traders on the stock floor is about as modern as a floppy disk.
Just like Moneyball, where a coach uses an algorithm to engineer the perfect baseball team, Flash Boys demonstrates how coding can tread a fine line between legitimacy and fraud. Lewis focuses on this moral instability with his portrayal of a Canadian trader who takes on the cause of trying to protect the market from HFT tactics. He recruits a band of savvy obsessives with technological wizardry for his crusade. Despite HFT being a new phenomenon, we’re given a David and Goliath narrative that makes you root for the good guys throughout. The stonewalled anonymity – aside from the odd comic slip on LinkedIn – of people involved in HFT makes Lewis’ personal portraits of the good guys even more compelling. The haunting motif of the Twin Towers – views over the memorial and stories about the trader late for work the morning of the attacks resonate throughout – keep us focused on the human elements behind stocks and shares.
Lewis keeps the reader going through the hard work of understanding the technical side of trades with entertaining characters and a perfect sense of delivery that many non-fiction writers would benefit from. Flash Boys is a thoroughly interesting and enriching read that maintains momentum and will effectively engage a broad audience through its ability to tell an engrossing story.
Flash Boys, by Michael Lewis, is published by Penguin. RRP (hardback) is $50.00, available now.