April 2 (Bloomberg) — “Flash Boys: A Wall Street Revolt” Author Michael Lewis discusses his book, trading and the stock market on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)
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How one man took on Wall Street and won
But the biggest boost for IEX was the March 2014 release of the book Flash Boys by financial journalist Michael Lewis.
Brad says it changed his life but more importantly, it helped the public understand the issue.
Before Flash Boys was released the company struggled to attract new talent. “We had to find people who really believed in what we were doing,” he says.
But after Flash Boys became a best-seller, IEX started to receive hundreds of application letters, and it was able to raise $75m (£53m) from investors.
.. Jeff Sprecher, the chief executive of Intercontinental Exchange, the company that owns the New York Stock Exchange, even went as far as calling IEX’s approach “un-American”.
.. One of the numerous benefits of becoming an official stock exchange is that traders are legally bound to send orders to it if the stock prices listed there are better than other markets.
IEX Group Gains Approval for Stock Exchange
IEX is run by the people at the center of the Michael Lewis book, “Flash Boys: A Wall Street Revolt,” which profiles the early efforts of the IEX team to create a trading exchange that would be somewhat shielded from high-frequency traders.
.. Other exchanges and trading firms had urged the S.E.C. to reject the IEX application to become an exchange.
.. The most novel and controversial feature of the IEX exchange is a so-called speed bump that would slow down trading slightly to throw off traders that rely only on speed.
.. The speed bump slows trades down by only 350 microseconds — or millionths of a second — but that is an eternity in a stock exchange universe in which computers can buy and sell stocks in nanoseconds — or billionths of a second.
.. IEX won support — and financial backing — from several large mutual fund companies, which said that the exchange would help them trade more cheaply and efficiently, as well as from hundreds of small investors, many of whom read “Flash Boys” and wrote in to the S.E.C.
.. In a letter written in May, Nasdaq’s lawyers suggested that the S.E.C. could face a lawsuit if it approved the IEX application.