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Blink 3 of 8 - The 5 AM Club
by Robin Sharma
A Wall Street Revolt
Flash Boys by Michael Lewis is a non-fiction book that explores high-frequency trading on Wall Street. It reveals how computerized trading is rigged to exploit investors and how a group of traders combated these practices to create a fairer market.
Our story begins in 2007 with Brad Katsuyama, the head of the Royal Bank of Canada’s (RBC) stock brokerage team in New York.
Brad’s job was to sell shares on public stock exchanges on behalf of large investment firms. These large firms typically wanted to sell huge quantities of shares at once and this was problematic because there usually wasn’t enough demand on the open market to buy that many shares.
Imagine, for example, an investment firm wants to sell three million shares of stock in a company called Solectron, but the stock exchanges only have demand for one million shares at, say, $3.70 a share. The investment firm could offload the first million shares at this price, but would then need to spend time and energy trying to sell the remaining two million without the price dropping too much, as it tends to do when large amounts of shares are sold.
Instead of doing this themselves, the company would sell the shares to Brad at RBC, who would handle the resale. The investment firm might sell those three million shares to RBC for $3.65 a share, giving Brad a $0.05 discount compared to the market price for helping them out. Brad would go on to sell the first million with no problem at $3.70 and then try selling the remaining two million at an average price of at least $3.63, as this would allow him to profit on the deal.
By helping match supply to demand, Brad is actually performing a valuable service to the financial system: he’s facilitating a liquid market where sellers can sell and buyers can buy with ease.
Flash Boys (2014) is an investigation into the dark underbelly of the US financial markets. It also chronicles the birth of a new stock exchange, the IEX, created to counteract a rigged system that was facilitated by technological loopholes and a lack of transparency.
Flash Boys* (2014) sheds light on the secretive world of high-frequency trading and its impact on the financial markets. Here's why this book is a must-read:
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Try Blinkist to get the key ideas from 7,500+ bestselling nonfiction titles and podcasts. Listen or read in just 15 minutes.
Get startedBlink 3 of 8 - The 5 AM Club
by Robin Sharma
What is the main message of Flash Boys*?
In the book Flash Boys*, the main message revolves around high-frequency trading and its impact on the stock market.
How long does it take to read Flash Boys*?
The estimated reading time for Flash Boys* is a few hours. With the Blinkist summary, you can grasp the key insights in just 15 minutes.
Is Flash Boys* a good book? Is it worth reading?
Flash Boys* is definitely worth reading. It sheds light on the hidden world of high-frequency trading and offers a compelling narrative that will leave you thinking.
Who is the author of Flash Boys*?
Michael Lewis is the author of Flash Boys*.