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Flash Boys - Michael Lewis


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Bloomberg View columnist Barry Ritholtz interviews Brad Katsuyama, President and Chief Executive Officer of IEX Group, formerly the Global Head of Electronic Sales and Trading at RBC Capital Markets. They discuss dark pools. This interview aired on Bloomberg Radio.

 

http://www.bloomberg.com/podcasts/masters-in-business/

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I find Michael Lewis to be pompous, self important, sensationalist prick. Despite his proclaimed self-righteousness, he fit Salomon very well.

 

So you work in HFT, eh?

 

I don't have to answer this, but no.

 

And my opinion about him was the same before "Flash Boys"

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I find Michael Lewis to be pompous, self important, sensationalist prick. Despite his proclaimed self-righteousness, he fit Salomon very well.

 

So you work in HFT, eh?

 

I don't have to answer this, but no.

 

And my opinion about him was the same before "Flash Boys"

 

Opinions are opinions, no worries.

 

But you have to admit, someone just had to ask, it was too obvious  :D

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Bloomberg View columnist Barry Ritholtz interviews Brad Katsuyama, President and Chief Executive Officer of IEX Group, formerly the Global Head of Electronic Sales and Trading at RBC Capital Markets. They discuss dark pools. This interview aired on Bloomberg Radio.

 

http://www.bloomberg.com/podcasts/masters-in-business/

 

Listened. Good one.

 

http://overca.st/CDUXxQs-Q

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Just finished listening to this one.  I've read three of Lewis' books now, and each time I feel increasingly uneasy with his representations.  I get the impression that he presents a version of the truth, but it is a potentially dangerous, one-sided version.  That said, I have trouble believing HFT is doing a whole lot of good for the world.

 

Following on to that, has anyone read this counterpoint?

 

Flash Boys: Not So Fast: An Insider's Perspective on High-Frequency Trading

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I've read three of Lewis' books now, and each time I feel increasingly uneasy with his representations.  I get the impression that he presents a version of the truth, but it is a potentially dangerous, one-sided version.

 

Exactly my feeling about him.

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  • 4 weeks later...

He writes entertaining novels.

;)

 

He writes entertaining novels.

 

There. Fixed that for ya.  8)

 

It was "entertaining" as I've become engrossed in the story and read it rather quickly.  Don't get bored out of my mind.  Didn't particularly enjoy this one that much however.

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  • 2 weeks later...

Listened. A character-driven view with mostly one side of the story. Could've been without the recurring "so much money stolen" rants. And I would've liked some finance-characters to complete the tech rebels viewpoint. We'll can't get it all...I liked it overall.

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Listened. A character-driven view with mostly one side of the story. Could've been without the recurring "so much money stolen" rants. And I would've liked some finance-characters to complete the tech rebels viewpoint. We'll can't get it all...I liked it overall.

 

When the book came out and there was a huge media ruckus, we got the other side of the story. Everyone attacked Lewis, and their arguments basically amounted to nothing. Either they tried to act like Lewis was against all electronic, high-speed trading, and he isn't ("the spreads are smaller now!" yeah, but not because of front-runners and people sniffing your orders). Or they talked about liquidity and such, which is BS for the kind of HFT that Lewis went after (they actually mostly provide fake liquidity that disappears when someone needs it).

 

So sometimes when you don't get the other side, it's because they don't have anything to say that would make them look good. They do it for the money, that's it. The best they can hope for is to confuse the public and muddy the waters and hope that the money tap isn't turned off too soon. There's no hidden positive reason for that specific kind of HFT to exist (or if there is, I haven't found it yet).

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So sometimes when you don't get the other side, it's because they don't have anything to say that would make them look good. They do it for the money, that's it. The best they can hope for is to confuse the public and muddy the waters and hope that the money tap isn't turned off too soon. There's no hidden positive reason for that specific kind of HFT to exist (or if there is, I haven't found it yet).

 

Agreed, it doesn't add much value. IEX seems to be doing pretty good since the book came out. Record market share a couple of days ago: http://www.iextrading.com/insight/stats/

 

Btw, this book taught me that microwave communication can be faster than fiber optics. Particularly affects my shares in Effnet.com which does header compression and has some tower manufacturers as customers.

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Wanted to point out for those who want a broker that doesn't sell your orders to HFT firms and doesn't route you first through their own dark pools even if that's not the best execution for you; Interactive Brokers has a policy of not selling order flow to 'internalizers' and other third parties. They also connect with the IEX exchange (you can use their smart routing algo and let it find the best execution, or you can specify that you want to go to IEX directly).

 

I know most here are probably not big enough for that to make a big difference, but if on principle you don't want to support brokers who are complicit with the worst kind of HFT practices, going with Interactive Brokers might be a way (along with the low cost benefits).

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