The recent appearance by Michael Lewis on 60 Minutes and the publication of his book Flash Boys has generated a furor over the perceived inequities of high-frequency trading.
The idea that those engaged in high-frequency trading are permitted to “see” your trades, purchase stock ahead of your order and resell it to you at a higher price is clearly repugnant. There are claims that high-frequency trading permits insider trading and illegal front-running by disrupting the normal sequence of orders placed or “spoofing” fake trades to create an illusion of market activity. These allegations are deeply troubling and worthy of investigation and responsible regulation.
It will not be easy or quick to sort all this out. In the interim, new trading platforms like IEX level the playing field by depriving high-frequency traders of their information advantage. Its goal of “institutionalizing fairness in the markets” is a worthy one.
Here’s what you may not know: You have the power to game this system and make it work for you.
Read the rest of the article on The Huffington Post.