Book Review - Flash Boys by Michael Lewis

Flash Boys: A Wall Street Revolt by Michael Lewis
My rating: ⭐⭐⭐ (3 of 5 stars)

Why you should read this book: For an accessible description of how high-frequency trading (HFT) works, even if you are not a financial or software expert.

Why you should not read this book: Instead of an overarching coherent narrative, it's more of a collection of stories intended to paint a bigger picture of HFT and the men trying to create a "fair" marketplace.

Honest book title: Understanding High Frequency Trading through a collection of short stories.

Summary:

Michael Lewis is a master at explaining difficult concepts for the lay person. As a software engineer with no finance background, I was simultaneously amazed at his brilliantly simple descriptions of both the intricacies of building software (open source, maintainability, legacy software, etc) and how HFT exploited the stock market (dark pools, [other financial terms that I don't remember]).

Unfortunately, the many characters and people in Flash Boys seem like a mechanism for describing HFT, Thor, and all the various revolutions in Wall Street. The archs presented for individuals are brief and flat, and you don't really care much about any of the individuals. The various individuals don't seem to connect too closely with the narratives of the other individuals (spoiler - the guy looking to lay the wire in the first chapter has nothing to do with the rest of the book and is simply a device to describe the importance of speed).

Reading this the week of the historic Gamestop (GME) short squeeze, I'm not sure there's a meaningful takeaway other than "The house always wins". Am I supposed to be enraged with the reality of hedge funds skimming off the top of my investments? Given that Lewis's portayal of legislation is that it only seems to make things worse, are we to simply resign ourselves to this effective hedge fund tax? Is there a risk for HFT to crash the market and significantly damage the economy, as a few people implied in the book?

Books don't all need to have takeaways. But only textbooks leave you without feelings and emotional investment. Flash Boys, unfortunately, was a cleverly-written textbook.

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