Flash Boys: A Wall Street Revolt is a 2014 economic nonfiction book by financial journalist Michael Lewis. Flash Boys investigates Wall Street’s desire to maximize profits and the ramifications of this profit-seeking behavior on the broader economy. Flash Boys follows investor Brad Katsuyama’s quest to establish the Investor’s Exchange (IEX) to mitigate the effects of High-Frequency Trading (HFT), a Wall Street profit-maximizing trading practice at the heart of Lewis’s investigation. Through Katsuyama’s story, Lewis explores The Culture of the Stock Market and the Desire for a Purposeful Life that drives the investors of the stock market, as well as the practical limits of Reform Versus Revolution for trading practices that frequently throw the global economy into disarray.

Michael Lewis is a prolific author whose works explore financial crises and finance capitalism. Lewis is well-known for taking extraordinarily complex concepts, often based on quantitative data, and making them comprehensible to the general reader and wrapping them up in an entertaining true story. Lewis’s unique blend of narrative storytelling and data analysis has led to film adaptations of several of his works.

This study guide uses the 2014 hardcover W. W. Norton edition.

Content Warning: The author’s occasional use of profanity and strong language is preserved in direct quotations in this study guide.

Summary

High-Frequency Trading (HFT) is a relatively new Wall Street practice that emerged from the shift to digital-only stock trading platforms. Brad Katsuyama is Lewis’s protagonist and guide to the world of high frequency trading. Katsuyama is a touch too nice to fit into a cutthroat world like Wall Street. While working at the Royal Bank of Canada’s Wall Street office, Katsuyama discovers that the prices of stocks move at the very instant he tries to buy them. Someone is able to register Katsuyama’s intent to buy a certain amount of stock at a certain price and then drive up the price, all in the time it took for the digital signal to travel from one location to another. Katsuyama puts together a team of technicians, programmers, Wall Street veterans, systems analysts, and national puzzle champions to solve this conundrum. The team discovers that high frequency traders (HFTs) have built incredibly fast supercomputers capable of analyzing and reacting to data across stock exchanges far more quickly than humans. Armed with this informational advantage, HFTs can make investments with near certainty of success, profiting themselves at the expense of ordinary investors.

Lewis’s interest in high-frequency trading began with Sergey Aleynikov in 2009, a former Goldman Sachs programmer sent to prison for stealing his employer’s proprietary computer code. Aleynikov was at the forefront of Goldman’s HFT technology. His swift arrest and prosecution suggested that he took something of exceptional value. As Katsuyama and his team develop plans to create their own stock exchange with a unique set of rules capable of blunting the advantages of HFTs, Lewis occasionally pauses the narrative to revisit the story of Aleynikov, whom Lewis comes to regard as an unfortunate victim of a cruel system that spares accountability for those who truly deserve it. The narrative follows Katsuyama and his team as they learn more about the scope and precise workings of HFT as they mount their unlikely quest to challenge HFTs and the entire Wall Street infrastructure that helped spawn them. The complementary story of Aleynikov illustrates that Wall Street’s corruption is endemic, and that regardless of how much one group of decent men might succeed, the true positions of power belong to the corrupt and the cynical.