Summary

"Flash Boys: A Wall Street Revolt" by Michael Lewis exposes the high-frequency trading (HFT) arms race that has transformed the U.S. stock market. Lewis meticulously details how HFT firms, armed with cutting-edge technology and complex algorithms, exploit minute discrepancies in market prices, gaining an edge over ordinary investors. The book follows a group of Wall Street insiders who uncover the rigged nature of the market and band together to create a fairer exchange, IEX. It delves into the origins of HFT, tracing it back to the 1987 stock market crash and subsequent regulations that inadvertently paved the way for electronic front-running. The narrative highlights the conflicts of interest within large banks, the opacity of dark pools, and the systemic issues caused by regulations like Reg NMS, which prioritize speed over fairness. Through vivid anecdotes and in-depth explanations, Lewis illustrates the technical intricacies of HFT, including the significance of milliseconds and the various predatory strategies employed by these firms. The book also explores the personal stories of individuals caught in the HFT web, from a Goldman Sachs programmer wrongly accused of stealing code to the visionary team behind IEX, who risk their careers to fight for market integrity. Overall, "Flash Boys" is a compelling exposé of the shadowy world of high-frequency trading, offering a glimpse into the technicalities, the personalities, and the profound impact it has on financial markets and the investing public.