HFT Controversy Reveals Technology Gaps on Wall Street
“Flash Boys,” by Michael Lewis, argues that high-frequency traders (HFTs) have been semi-secretly taking advantage of high-speed access to the stock exchanges in a way that unfairly disadvantages other traders. I don’t have a strong opinion about whether HFT is good or bad, fair or unfair; but there was nothing semi-secret about what HFTs were doing.
A large part of what Lewis discusses comes out of the uneven transition of financial trading firms to a world in which advanced computer/networking technology is absolutely critical to business. This transition requires a much higher level of technology expertise, or access to that expertise, than many firms had or have. And it requires that technology expertise be combined with a pretty deep understanding of how the business operates.
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