Flash boys redux
I’ve just finished Flash Boys and given that I commented on it before reading it, I figured it was only fair to follow up.
Here are my thoughts:
1) it is a good book. Very well written, a lovely narrative and great linkages.
2) it is not as biased as some people maintain.
3) Lewis starts off talking about the predatory practices of HFTs but soon discovers it’s conventional banks and their dark pools which may be the bigger problem.
4) things that I learned or were shocked by: the level of ignorance among money managers about market structure in general. This includes Brad Katsuyama’s original understanding. The talk of ignorance dominates. Which made me think about the first time I encountered HFT.
I’ll tell the story because I think it’s interesting. It was in 2005 when I was at Platts, albeit all thanks to a serendipitous encounter with an “algo” programmer in the communal gardens of the block I was living in.
My bicycle was broken and this nice guy, in his late 20s I would guess, who was also from my block and hanging around in the garden offered to help me with it. He knew about gears and chains and fixed it quite nicely. But it took a while, during which we struck up a conversation about what he did in his day job. He said he was an “algorithmic trader”. I was like “what the hell is that?” He said: “oh nobody knows about it now, but it’s going to become the next big thing. There are only a handful of people in London who know how to do it.”See also at FT Alphaville:
He then explained what it was and that because he was so sought after and there were so few people doing it he could freelance, going from one bank to the other as they bid over his skills....MUCH MORE
Come with me if you want to trade
