One sentence summary
Flash Boys: A Wall Street Revolt by Michael Lewis is a nonfiction financial thriller that delves into the practices of the stock market and the subsequent financial revolution it ignites.
Book genre
Non-fiction financial thriller
Main topic of the book
The uncovering and fighting of financial industry practices that take advantage of unsuspecting investors.
Key ideas
- High Frequency Trading (HFT): Complex, computer-driven trading techniques used to execute orders at an incredibly high speed. Explored at length in the book to reveal the role played by HFT firms in the stock market.
- Market Fragmentation: The process of breaking down the trading process into smaller pieces. Explored to reveal how trading can be divided into milliseconds, leading to unfair advantages for certain traders.
- Dark Pools: Private, off-exchange trading operations that are used by large investors to buy and sell without having to use the public markets. Explored to reveal how dark pools are used to manipulate markets.
- Flash Boys’ Movement: A movement of investors and stock brokers who set out to expose the opaque and manipulated nature of the stock markets and to create a fairer playing field for all investors. Explored to reveal how the movement led to a transformation in the markets.
Main parts of the book and a short summary
Part One of Flash Boys introduces the concept of High Frequency Trading (HFT) and some of the tactics employed by HFT firms to gain an advantage in the stock market. It then dives into a specific story of a group of stock brokers who uncovered a manipulative scheme called the “Pump and Dump.” The group then sets out to bring awareness to these nefarious activities and works to create a more balanced playing field.
Part two goes deeper into the activities of HFT firms, creating a more detailed picture of their strategies and techniques. The segment then touches upon what is known as “market fragmentation,” which breaks down the trading process into smaller pieces and can give some traders an advantage over others.
Part three introduces the concept of “dark pools,” private, off-exchange trading operations that can be used to buy and sell without having to use the public markets. It explores how dark pools can be used to manipulate markets and how they may have an effect on manipulation tactics employed by HFT firms.
Part four looks at the beginnings of the “Flash Boys’ Movement,” a movement of investors and stock brokers that was started to expose the opaque and manipulated nature of the stock markets and to create a fairer playing field for all investors. It delves into how the movement led to a transformation in the markets and how it has impacted trading today.
Key takeaways
- High Frequency Trading is a complex, computer-driven trading technique used to execute orders at an incredibly high speed.
- Market Fragmentation can be used to give some traders an advantage over others.
- Dark Pools are private, off-exchange trading operations that can be used to buy and sell without having to use the public markets.
- The “Flash Boys’ Movement” seeks to bring awareness to the opaque and manipulated nature of the stock markets.
- The movement has led to a transformation in the markets and a more balanced playing field for all investors.
Author’s background and qualifications
Michael Lewis is a bestselling author and a former Wall Street trader. He has written several best-selling books, including The Big Short, The Blind Side, and Moneyball. He has also written for magazines and websites such as The New York Times Magazine, Vanity Fair, The New Republic, and The Wall Street Journal.
Target audience
The target audience for Flash Boys: A Wall Street Revolt are investors and stock market enthusiasts interested in getting a better understanding of the workings of the stock market.
Publisher and first publication date
Flash Boys: A Wall Street Revolt was published by W. W. Norton & Company in 2014.