Soderstrom 1

Kade Soderstrom

Mrs. Stanford

AP English

20 March 2019

Wall Street ScumBags

Flash Boys​ uncovers what is going on behind the scenes of Wall Street and has shocked a

lot of people with their discoveries. High Frequency traders have gouged the pocket books of the

¨little guy¨ causing what people say to be the new scam of the century. Michael Lewis is able to

explain this highly technical subject in a entertaining and dramatic way. He explains the subject

through the creator of IEX Brad Katsuyama, and his journey to creating this new stock exchange.

The purpose of ​Flash Boys i​ s to expose how Wall Street has been exploiting the stock market for

monetary gain.

Behind the scene of Wall Street most people picture rowdy trade floors. Things have

changed since then; rooms full of black computer box where once trade floors full of noise and

confusion. The world of stock trading has now become digitalised. There is no need to call up a

trader and buy stock over the phone, now it is as simple as logging onto ETrade and clicking a

button. But with technology comes new strategies for Wall Street to cheat people out of their

money. The strategy used in this case is something call High Frequency Trading (HFT). The

basis of HTF is speed and coding. This is possible with the fastest route physically to the stock

exchange building, and Russian computer coders. Big Wall Street banks like Goldman Sachs and
 Soderstrom 2

Credit Suisse buy buildings across from a stock exchange such as NASDAQ and run a line from

their buildings full of their computers to the stock exchange; this allows for the shortest route the

information has to travel through the computers to the stock exchange to execute the trade. Wall

Street banks also buy the newest and fastest computers and technology as soon as they come out

which speeds up the trade by microseconds. The outcome of the speed allows big banks to

predicts the move of another investor or firm. The Russian computer coders are hired to code the

software used in these computers to travel the shortest possible distance electronically. With

HTF it is only a matter of microseconds because the fastest person to the stock exchange will

know who just bought stock and they will manipulate the price. To most people this information

is very mundane but this is not just affecting the big name banks; it is directly affecting hard

working American retirement funds.

HFT targets unsuspecting hedge fund managers and banks. These managers are in charge

of billions of dollars worth of people's life savings. The way this works is that as soon as a hedge

fund manager presses the ¨buy¨ button, the price of a stock will jump down a cent. So therefore,

the hedge fund manager is paying an extra cent for a stock. This happens because the HTF beat

the Hedge Fund manager to the stock and is able to make a quick turn over, selling him the stock

for an extra penny. This extra penny can mean the difference of ten thousand plus dollars a day

depending on the size of the buy. This happens to many hedge fund managers around the world

for long periods of time which helps the banks accumulate billions of dollars from HTF directly

from the pocket books of middle class investors. This was all explained very elaborate and in

excellent format by Michael Lewis.

 Soderstrom 3

Michael Lewis’ writing style is unique because he can turn a sophisticated subject into an

entertaining story whilst still maintaining the informational aspect. Surprisingly, for the

complexity of HTF, Michael Lewis is not an expert on the stock market; he is a journalist.

Michael Lewis was able to write this book as a narrative mainly from the point of view of Brad

Katsuyama, the CEO of IEX. IEX is a new stock exchange focused on eliminating HTF and

gaining equality for the people who are being taken advantage of. Michael Lewis used Brad as a

vice in his book to expose how Wall Street is exploiting the savings of many middle class

Americans. If this book was not the narrative it was, people would not have been interested in

reading it. Lewis wanted people to know what was happening to their money and just putting

facts in a book would not have engaged them.

Michael was able to expose the Wall Street banks with his New York times best seller

​ his was accomplished through the narrative of Katsuyama, who dedicated his life to
Flash Boy. T

stopping HFT. The language and ideas that he used to portray this complicated subject were

precise and well-fitting to the explanation of such a complex concept. His purpose was apparent

and ended up making waves in the financial industry. With this knowledge retirement fund

investors will be more knowledgeable about what is happening with their money and will chose

the correct retirement fund to invest in. The best retirement fund to invest in would be a

retirement fund that uses the stock exchange IEX. This revolution for a new fair stock exchange

started with Bradley Katsuyama and spread through the financial industry. ​Flash Boys ​spread the

word of this revolution to the public and ended the long term reign of big Wall Street banks.

Flash Boys e​ xposed Wall Street to the public and in the long term will reduce the amount of

HFT.
Soderstrom 4