Editor’s Note: This very interesting article from the Washington Post shows how policy and timing technology are inextricably intertwined. There is also an interesting video embedded in the article.
This start-up is promising a revolution, and Wall Street is pushing back
From here, Katsuyama has drawn the attention of some of the biggest names on Wall Street with his four-year-old company, Investors’ Exchange, or IEX. The idea behind the company is simple: Provide a venue for investors who want to buy or sell stocks where sophisticated high-frequency traders, who can make thousands of trades in a blink of an eye, do not have the advantage.
The firm was the hero of Michael Lewis’s 2014 book “Flash Boys: A Wall Street Revolt,” which argued that the markets are rigged against mom-and-pop investors. Stock exchanges once dominated by screaming brokers, scrambling to get the best price on a stock, have been taken over by computers and traders using complex algorithms to find an advantage — measured in fractions of a second. High-frequency traders, Lewis argued, could always stay a step ahead.