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landrum 's review for:
Flash Boys: A Wall Street Revolt
by Michael Lewis
Engagingly written, but his thesis that HFT is somehow intrinsically dishonest is not supported by the events he describes. Clearly he should actually be mad about gross malfeasance on the part of brokers, who if HFT firms were actually evil, should be the ones responsible for figuring out if cutting secret deals with them is a Faustian bargain. He loves writing the people in large financial institutions as naive and myopic, but I think this is extremely generous when it’s very obvious brokers were willfully screwing their clients.
For a book supposedly about HFT, it’s also notable he does not actually do any broader discussion of other non-frontrunning strategies, and besides 1-2 mentions of exploiting correlation being a valid use of speed in trading, I get the impression he either does not know or does not care about the actual nature of quant finance beyond this specific set of strategies. He discusses the infrastructure for low latency between exchanges like it’s entirely for frontrunning, which is just not a reasonable assumption. Who among us really knows, but I choose to believe 9 times out of 10 these strategies are at worst harmless to the market.
Despite my disagreements with his thesis, this is an enjoyable read, if perhaps not as well presented or cohesive as The Big Short. Highly recommend.
For a book supposedly about HFT, it’s also notable he does not actually do any broader discussion of other non-frontrunning strategies, and besides 1-2 mentions of exploiting correlation being a valid use of speed in trading, I get the impression he either does not know or does not care about the actual nature of quant finance beyond this specific set of strategies. He discusses the infrastructure for low latency between exchanges like it’s entirely for frontrunning, which is just not a reasonable assumption. Who among us really knows, but I choose to believe 9 times out of 10 these strategies are at worst harmless to the market.
Despite my disagreements with his thesis, this is an enjoyable read, if perhaps not as well presented or cohesive as The Big Short. Highly recommend.