Posted by Less99 on April 04, 2014 at 16:14:30:
In Reply to: Re: New book “Flash Boys: A Wall Street Revolt" posted by FrankP on April 04, 2014 at 15:55:02:
: : A new book “Flash Boys: A Wall Street Revolt by Michael Lewis says the U.S. stock market is rigged to hurt the average investor and benefit high frequency traders. He says computer-based high-speed trading gives them the ability to identify your desire to buy shares in any stock, buy the shares fractions of milliseconds in front of you, and then sell them back to you at a higher price.
: I'm not sure what the big deal is. Hasn't speed always been a tool of Wall Street traders, all the way back to the days when the brokers had news tickers and stocks tickers? It was the latest technology of the day. They would watch those tickers print out paper tapes with the breaking news, and if it was news that might affect a particular stock, they would run across the street to the New York Stock Exchange and put in a quick order. The high frequency traders of today are just doing the same thing.
No, it is not the same. Speed is not the real issue here - using speed to frontrun is. A better comparison would be if your old-time broker got the news flash and ran across the street to put in his order but somebody found out what he was about to do and bought the stock in front of him in order to sell it to him at a higher price.