Flash Boys: A Wall Street Revolt
In milliseconds, billions of dollars can vanish from ordinary investors' retirement accounts, and no one on Wall Street wants you to know about it. From the bestselling author of The Big Short and Moneyball comes a riveting investigation into high-frequency trading, the secretive practice that has transformed the U.S. stock market into a game rigged against everyday people.
At the center of this financial thriller is Brad Katsuyama, a trader at the Royal Bank of Canada who noticed something strange: stock prices seemed to move against him the instant he tried to buy. His investigation would uncover a hidden world where supercomputers and fiber-optic cables worth hundreds of millions of dollars give elite traders an edge measured in millionths of a second.
What Katsuyama and his team found was staggering. They walked away from lucrative Wall Street careers to do something unprecedented: build a new stock exchange designed to level the playing field. The Investors Exchange, or IEX, was their answer to a system that had gone wrong.
Michael Lewis brings his signature storytelling to one of the most important financial stories of our time. With unforgettable characters and pulse-pounding narrative, Flash Boys exposes the dark corners of modern finance while celebrating the rebels who dared to fight back.
Interesting Facts
The 60 Minutes Effect: Michael Lewis appeared on 60 Minutes on March 30, 2014, just one day before the book's publication. During the interview with Steve Kroft, Lewis declared the stock market was rigged. The episode reached nearly 13 million viewers and ignited a national firestorm about high-frequency trading.
Three Hundred Million For Four Milliseconds: A company called Spread Networks spent $300 million to build an 827-mile fiber optic cable from Chicago to New Jersey. The entire project existed to shave just four milliseconds off data transmission time. Workers tunneled through the Allegheny Mountains and under rivers to keep the line as straight as possible.
FBI Investigation Launched Immediately: The day after Flash Boys was published, the FBI announced an investigation into high-frequency trading. The SEC later fined the New York Stock Exchange $4.5 million. Multiple federal and state agencies opened inquiries into practices described in the book.
Required Reading at the SEC: Flash Boys became mandatory reading at the Securities and Exchange Commission after publication. The SEC received more public comments on IEX's application to become an exchange than on all previous exchange applications in the agency's entire history combined.
Wall Street Hated The Book: Financial elites were furious at Lewis for exposing their invisible tax on investors. They accused him of simplifying complex market structures to scare the public.
The Book's Mystery Ending: Lewis concludes with an FCC license number and an invitation to investigate. He had discovered microwave towers in Pennsylvania that were replacing fiber optic lines. Readers who googled the number uncovered a tangled web of high-frequency trading firms selling speed to the very regulator meant to police them.
Microwave Beats Fiber: The $300 million Spread Networks cable was already becoming obsolete when Lewis wrote about it. Microwave signals travel 4.5 milliseconds faster than fiber optic. The arms race for speed had rendered the "revolutionary" cable yesterday's technology.
Eyeblinks And Fortunes: Lewis uses a vivid comparison to explain the speed involved. A human blink takes about 300 to 400 milliseconds. The entire high-frequency trading advantage operates in fractions of that time. Fortunes are made and lost faster than your eyes can flutter.
Quotes
"People no longer are responsible for what happens in the market, because computers make all the decisions." - Michael Lewis
"He wondered, often, what it would look like if and when the shit in question hit the fan: The stock market at bottom was rigged. The icon of global capitalism was a fraud." - Michael Lewis
"Shining a light creates shadows." - Michael Lewis
"The average investor has no hope of knowing." - Michael Lewis
"The U.S. stock market now trades inside black boxes, in heavily guarded buildings in New Jersey and Chicago. What goes on inside those black boxes is hard to say—the ticker tape that runs across the bottom of cable TV screens captures only the tiniest fraction of what occurs in the stock markets." - Michael Lewis
"The best way to manage people, he thought, was to convince them that you were good for their careers. He further believed that the only way to get people to believe that you were good for their careers was actually to be good for their careers." - Michael Lewis
"Inside a dark pool, no one but the broker who ran it had any idea what was happening." - Michael Lewis
"The world clings to its old mental picture of the stock market because it’s comforting; because it’s so hard to draw a picture of what has replaced it; and because the few people able to draw it for you have no interest in doing so." - Michael Lewis
"For geniuses, they are really dumb,” she said. “Some of them are really pampered: They can’t even put together a cardboard box. They don’t think you do something. They think you call somebody." - Michael Lewis
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