📚 Flash Boys by Michael Lewis
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Disclaimer: I still need to read his recent book on SBF, Going Infinite. Weird time for Michael Lewis.
This is a captivating story of the high-frequency trading (HFT) industry, written in Lewis's signature narrative style. He has an incredible ability to dissect complex financial topics for the layperson (if you've seen The Big Short you know this well). Sharp wit, vivid anecdotes, and a keen eye for the human drama behind the numbers, his writing style is a personal favorite.
The book begins and ends with the same character, Sergey Aleynikov. He is portrayed as a brilliant and principled coder who previously worked at Goldman Sachs. His journey becomes a microcosm of the broader issues Lewis addresses. Aleynikov is initially hired by Goldman Sachs to develop algorithms for high-frequency trading, where he becomes intimately familiar with the proprietary code that allows the firm to execute trades at high frequency, giving Goldman Sachs a significant advantage in the markets.
However, what makes Aleynikov's story so compelling is the moral dilemma he faces. He becomes disillusioned with the system and is troubled by the predatory nature of HFT. So does this other guy in the story, Brad Katsuyama, a co-founder of the exchange IEX. UNfortuanetly for Aleynikov, he copies Goldman Sachs' code which he wrote using open-source libraries and thinking nothing of it because of the licensing of open-source. He did this before he left Goldman, who then got the FBI involved.
This pivotal event sets the stage for a legal and ethical battle. Sergey Aleynikov is arrested, tried, and convicted, which becomes a high-profile case in the world of finance. You see Aleynikov as a sympathetic character, a whistleblower of sorts, who takes on the powerful forces of Wall Street. Brad is the guy who you could say "get's it done."
Lewis takes a partisan stance in his storytelling. He clearly sympathizes with the engineers who seek to level the playing field in the financial markets. The guys playing with the speed of light. He portrays them as underdogs in a battle against the old guard of Wall Street traders who have profited from a system rigged in their favor for years. This partisan approach adds a layer of endorsement to his storytelling. It was a nice "short" read after the the Neal Stephenson novel. Highly recommend.