Author of the recently published book, Flash Boys: A Wall Street Revolt, Michael Lewis, was on CBS’ 60 Minutes for claims against Wall Street. On 60 Minutes last Sunday, Lewis stated, “They are able to identify your desire to buy shares in Microsoft and buy them in front of you and sell them back to you at a higher price”. According to Reuters, the method stock markets are using to get an upper hand is something called High-frequency trading (HFT).
“High-frequency trading (HFT) is a practice carried out by many banks and proprietary trading firms using sophisticated computer programs to send gobs of orders into the market, executing a small portion of them when opportunities arise to capitalize on price imbalances, or to make markets. HFT makes up more than half of all U.S. trading volume.
The trading methods and technology that make HFT possible are all legal, and the stock exchanges HFT firms trade on are highly regulated. But Lewis said these firms are using their speed advantage to profit at the expense of other market participants to the tune of tens of billions of dollars.”
Find out more by watching this video link of Michael Lewis on 60 Minutes sharing his knowledge about this scandal. What do you believe? Will you still put your money in the stock market? Why or why not?!