Flash Boys : Not So Fast
In Flash Boys, Michael Lewis alleged that the entire U.S. stock market is rigged. This is an extraordinarily serious accusation. If it is true that a conspiracy of stock exchanges, banks, regulators and high-frequency traders has rigged the market, this has profound implications for every aspect of our financial system. It's rather surprising, then, that this book alleging a vast high-frequency trading conspiracy included no high-frequency traders. Flash Boys lacks a single insider's account, and it shows. Electronic trading is extremely complicated, and if you neglect to talk to any electronic traders, you're probably going to get it wrong. Flash Boys: Not So Fast, written by a former high-frequency trading executive and regulatory compliance expert, provides the missing insider's perspective on today's stock market and answers the question of whether or not Michael Lewis is right. Not So Fast reviews the alleged scams described by Lewis and applies the same rigorous analysis that real trading strategies are subjected to, methodically walking through them step by step and explaining what is actually possible in today's markets and what is not. Extensively researched and documented, Not So Fast provides a clear, accurate picture of how today's markets operate, including what works, what doesn't work, and what changes need to be made.
Stats for nerds
19recommend
48mentions
24people
2014–2025years
75% recommend15% neutral10% critical
Mentions per year
What Hacker News says
- Flash Boys is essentially fiction. You might also enjoy "Flash Boys: Not So Fast," which attempts to debunk it.
- E.g., Flash Boys: Not So Fast is one example of another side. https://www.goodreads.com/en/book/show/23570025
- Flash Boys: Not So Fast is the argument in much more depth, and should be dispositive.
- What you're talking about is not frontrunning, it's purchasing order flow for market making. Frontrunning is an illegal activity with a specific definition. Purchasing order flow is not illegal.
While we're at it, quant firms occupy a family of trading strategies which are a superset of HFT; not all quants are market making, trading intraday or pursuing low latency strategies.
With all due respect, please stop perpetuating popular finance misconceptions of the Flash Boys variety. If this is something you'd like to learn more about, I suggest you read the following:
- https://blog.headlandstech.com/2017/08/03/quantitative-tradi...
- Flash Boys: Not So Fast
- Trading and Exchanges: Market Microstructure for Practitioners, An introduction to quantitative finance by Blyth.
Avoid pop finance books that is light on numbers. If you want to understand the qualitative aspects/culture/history, books like Flash Boys or Flash Boys: Not so fast are more than sufficient. Stay away from "technical" books that are designed for layman and non-technical readers. They will handwave Black Scholes and economic math and you will simply be going through the movements without truly understanding.
Books like Reminiscences of a Stock Operator are great secondary books to supplement your primary readings. You don't give a beginning programmer Pragmatic Programmers/Clean Code/Programmers at Work when he or she can barely write a hello world, let alone a quicksort. You want a intro to programming course followed by something like SICP to lay in the foundations of abstraction and computer science. It is the same for finance. Half of the books in this thread are either financial pop science or has little relevance to somebody who wants a rigorous understanding of how the stock market system works.
Also to note, Buffet and A Random Walk Down Wall Street are books that espouse certain schools of thought on managing portfolio. Judge them by their history and backtest their theories rigorously. It is like Object Oriented Programming, fads wax and wane with time and everyone has their opinion on how trading should work so take things with a grain of salt. Lastly, trading and managing a 10 billion dollar fund is quite different from e.g. 100k in your tax free social security account due to stuff like network effects and doors that can only be opened when you have enough zeroes on your spreadsheet so what's good for the goose is not always great for the gander.
Once you are done with stock markets, get a macroeconomics textbook to understand how it ties into the federal reserve (or central bank) and how government bonds affect liquidity, that sort of thing. Again, avoid pop science books which shows up way too often on HN (this is worse with biology, another subject that this forum has a poor grasp of).
- Read the rebuttal:
Flash Boys: Not So Fast - An Insider's Perspective on High-Frequency Trading
https://www.amazon.com/Flash-Boys-Insiders-Perspective-High-...
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