Flash Boys: A Wall Street Revolt- Completed Reading

I finished Flash Boys and I have to say that it was an incredible learning experience. Although it was very confusing, the book was not just interesting but I learned a lot from it, not just from reading but the research that went along with it. As a teenager, I am barely ever exposed to investing because I do not have control of my finances until I am 18. This book seemed like a good learning experience and insight on investing because this is something I am interested in doing as a career. Hopefully I will continue learning about the stock market and a few years from now, my goal is to read this book again and understand every single thing that is mentioned/talked about, without having an educated guess. Although as I have mentioned several times before that this book was very challenging, I understand what High Frequency Trading is now and the other topics that this book is based on. Now I think I can finally explain what it is: (I am going to refer to High Frequency Traders as HFC’s so it is simpler) When x investor goes to buy a stock they submit and order, lets say for the limit they will spend of $30.01 (the price for the stock). When they buy the stock, their order appears in a certain stock exchange. What the HFC’s are doing is in microseconds, finding that stock being sold for $30.00 in a different exchange, buying it and then filling x investors order to buy in the different exchange. Although this does not seem like a big deal because it is only one cent. If x investor was buying 100,000 shares (this is a lot to buy but it is an example) the HFC’s are making $1,000 and x investor is losing it. There are billions of dollars being transferred a day in the stock market, so you can start to understand how much the HFC’s are “stealing” from us. Overall, I believe that this should be illegal, in Flash Boys it is following the story of a group of people that work different jobs in Wall Street coming together to create a stock exchange where this is not a problem. Overall for anyone interested in learning about the stock market, this is a great book to read. It does take a lot of research and re-reading pages to understand the concepts but once it starts to make sense the book is really good and interesting. Hopefully they will make a movie for this book just like they did for Moneyball and Blindside (both by Michael Lewis as well).

Flash Boys: A Wall Street Result- Middle Reading

So far, this book is very good, just like I thought it would be. The only problem with it is that it is very confusing. I have probably spent multiple hours doing research to understand the terms they use in the book. Many parts of the book can be very challenging if you don’t do the research. For example, this section is from the page I am own and I think that it is a pretty good sample of the book as a whole: “The pension fund was trying to buy 100,000 shares of Microsoft could, of course, specify that the Wall Street bank not take its orders to the public exchanges at all but simply rest it, hidden, inside the dark pool. But an order hidden inside of the dark pool wasn’t very well hidden. Any decent high-frequency trader who had paid for a special connection to the pool would ping the pool with tiny buy and sell orders in every listed stock, searching for activity. Once they’d discovered the buyer of Microsoft, they’d simply wait for the moment when Microsoft ticked lower on the public exchanges and sell it to the pension fund in the dark pool at the stale, higher “best” price (as Rich Gates’s tests had demonstrated). It was riskless, larcenous, and legal—made so by Reg NMS” (Lewis 93).  Now this may seem a little overwhelming and confusing, it was to me as well. I had to do a lot of research in order to understand what Michael Lewis was and still is saying during the book. This is probably the most difficult book I have read in a while, because the terms and the ideas being mentioned are very complex and hard to grasp right away. I am also always reading a section over twice or even three times to understand what he is saying. After me saying these things, you would expect me to not like this book because of its difficult, but I think it is great. I would try to explain what it is about but as you can see from the section above, its not the easiest thing to do and I will probably be even more confusing than the sample above because I am not an expert on this topic. Just to repeat my message, this book is great and very interesting, but it is also very challenging.

Flash Boys: A Wall Street Revolt- Before Reading

While reading some news last night, I stumbled upon an article saying that Wall Street was rigged. I clicked on it thinking it would be a pointless confusing article but instead it talked about a book that happened to be released yesterday by Michael Lewis addressing this topic called Flash Boys. This topic seemed really interesting so I read a little bit about the book and I already have read a book by Michael Lewis so I decided to get it. First off, Michael Lewis is the author of several books-turned-movies such as Moneyball and The Blind Side. I read Moneyball  and enjoyed it so I figured this would be good too, even though they are different topics. Back to the news article, I looked into how it was rigged very briefly and my mind exploded. The things that are happening are just amazing and you really don't think about them. I would try to explain the things I read now, but I do not understand all of them (partially in disbelief and partially because its confusing) so I will try to explain them in the next two blogs post about this book. Overall I am really looking forward to reading this because it got great reviews and is already number one on the Amazon Best Sellers list.