In his book "Flash Boys," author Michael Lewis explains how investors are disadvantaged without access to high-frequency trade technology.
What's the advantage of speed?
In the above video, Lewis explains how an extra millisecond allows high-frequency traders to exploit computerized trading in the U.S. stock market. By "beating" investors to exchanges, Lewis argues that high-frequency traders can buy stocks and quickly sell them back at higher prices.
Billions have been spent by Wall Street firms and stock exchanges to gain the advantage of a millisecond. "Is it a scam?" 60 Minutes correspondent Steve Kroft asks. It's bigger than a scam, Lewis says.
Lewis further explains, in the video below, how ordinary investors are affected and argues that high-frequency traders have created instability in the stock market -- for everyone.
How ordinary investors are getting "screwed"00:42 A reoccurring metaphor Lewis uses in his book "Flash Boys" is one of "prey and predators." According to Lewis, the prey is "anybody who's actually an investor in the stock market."
