A new book by Michael Lewis, “The Flash Boys,” has gathered a lot of attention because of its scathing criticism of High-Frequency Trading (HFT), a type of electronic trading where transactions take place within millionths of a second. It argues that HFT is nothing more than a scheme designed to enrich its practitioners at the expense of everyone else.
Lewis’ premise is well argued and he may be right in painting HFT as a value-sucking parasite. However, investors must not conclude that all high-speed electronic trading is bad. In fact, it has brought real benefits that apply directly to our clients. Here are two.(Read more)
Written by: Raul Elizaldeby