The U.S. stock market is rigged in favor of high-frequency traders,
stock exchanges and large Wall Street banks who have found a way to use
computer-based speed trading to gain a decisive edge over everyone else,
from the smallest retail investors to the biggest hedge funds, says
Michael Lewis in a new blockbuster book, “Flash Boys.”
The insiders’ methods are legal but cost the rest of the market’s
players tens of billions of dollars a year, according to Lewis, who
spoke with Steve Kroft in his first interview about the book.
High-frequency traders have found ways to use their speed to gain an
advantage that few understand, says Lewis. “They’re able to identify
your desire to buy shares in Microsoft and buy them in front of you and
sell them back to you at a higher price,” says Lewis. “The speed
advantage that the faster traders have is milliseconds…fractions of
milliseconds.”
Lewis says a former trader at the Royal Bank of Canada in New York,
Brad Katsuyama, figured this out after he consistently failed to have
his entire order filled at the price he wanted.
Click Here to watch the video report.
According to Wayne Morris, “We have been warning clients of this
problem for the past 3 years. Our Indexed Annuities and Universal Life
policies provide upside potential growth, but guarantee zero downside
risk of loss.”
