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  • Author Michael Lewis argues that the U.S. stock market is rigged

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    Yesterday we reported on Michael Lewis’ claim during CBS’ “60 Minutes” this past Sunday that the U.S. stock market was “rigged.”

    Lewis’ assertion reflects the findings from his new book, “Flash Boys: A Wall Street Revolt,” which frames a picture of financial markets as being largely controlled by big banks whose high frequency trading (HFT) operations enable them to capture trading profits at the expense of the average retail trader.

    In Lewis’ view, your average trader cannot compete with computerized trading systems that receive and trade on new market data in mere milliseconds, capturing small profits on each trade which grow into large ones over billions of transactions.

    Traders at Getco, a private company with fewer than 250 employees, use powerful computers and algorithms to engage in high-frequency trading. Here, a Getco trader at his workstation. (Image Source: Carlos Javier Ortiz/The Wall Street Journal)

    As the New York Post summarized it:

    “The robots’ high-speed networks allow them to buy the stocks milliseconds in advance — enough time to push up the price for the investor that had made the original order.

    “They’re able to identify your desire to, to buy shares in Microsoft and buy them in front of you …read more

    Source: The Blaze