The U.S. stock market is rigged, with elite traders buying access to a high-speed network that allows them to figure out what you’ve just ordered, order it first, then raise the price before your order is complete.
And according to Michael Lewis, author of a new book about high-frequency trading called “Flash Boys,” this form of “front running” is completely legal.
“The insiders are able to move faster than you,” Lewis said on “60 Minutes” on Sunday night. “They’re able to see your order and play it against other orders in ways that you don’t understand. They’re able to front run your order.”
“One hedge fund manager said, ‘I was running a hedge fund that was $9 billion and that we figured that the, just our inability to, to make the trades the market said we should be able to make was costing us $300 million a year.’ That was $300 million a year in someone else’s pocket,” Lewis said.
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