Dona Eull-Schultz

Two weeks ago I was on holidays in Naples Florida. My sojourns south involve mornings at Starbucks, reading 4 daily newspapers, and evenings catching the late night talk shows.  

I caught a rerun of the April 1 Daily Show of Jonathan Stewart hosting Michael Lewis. Of course the topic was the new book, “Flash Boys, A Wall Street Revolt.” Lewis is a well known author with a knack for taking on topics related to the investment industry.

The Daily Show interview summarized the baseline issue with the practice of High Frequency Trading (HTF). The “traders” are computers that, in milliseconds, will buy stock just before an investor or average person, and sell it back to them for a higher price. Basically the practice inserts unnecessary middlemenin the trade where they should not be involved driving up stock prices unnecessarily.

The penny dropped for me when listening to the back and forth between Lewis and Stewart. When people physically do this type of trading, it’s “front running” and it’s illegal. But when the same practice is done by a computer, it is legal, largely because it goes unnoticed. How does that happen in 2014?

In my view the topic of High Frequency Trading (HTF) is important for all of us to learn about and make our voices heard. Read the book, watch the interview and let the Regulators know your views.

 

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