The Washington Post reports:
One of the most feared men on Wall Street recently gave a tour of his offices with confident glee. From one window on the 44th floor, there is a view of the Statue of Liberty. On the other side is One World Trade Center.
Brad Katsuyama, 38, has the only enclosed office on the floor, but he rarely uses it. Dressed in jeans and wearing a fleece vest, he slides easily among his nearly 70 employees.
“This is where the action is,” he says, pointing to a desk in the middle of a crowded room.
From here, Katsuyama has drawn the attention of some of the biggest names on Wall Street with his four-year-old company, Investors’ Exchange, or IEX. The idea behind the company is simple: Provide a venue for investors who want to buy or sell stocks where sophisticated high-frequency traders, who can make thousands of trades in a blink of an eye, do not have the advantage.
The firm was the hero of Michael Lewis’s 2014 book “Flash Boys: A Wall Street Revolt,” which argued that the markets are rigged against mom-and-pop investors. Stock exchanges once dominated by screaming brokers, scrambling to get the best price on a stock, have been taken over by computers and traders using complex algorithms to find an advantage — measured in fractions of a second. High-frequency traders, Lewis argued, could always stay a step ahead.
The book rankled many on Wall Street and thrust IEX into the spotlight.
Now, IEX could soon be competing against some of the oldest names on Wall Street, including the New York Stock Exchange, which is more than 200 years old. The Securities and Exchange Commission is expected to approve IEX’s application to become a registered stock exchange as early as Friday, a move that could shake up the institutions that have long dominated the way stocks are bought and sold.
There's more:
Among its most strident opponents is Citadel, a massive hedge fund and securities dealer. “As the largest market maker, the efficient functioning of the market is incredibly important to us,” said Jamil Nazarali, head of execution services at Citadel Securities, the market making business of Citadel, which accounts for up to 15 percent of stocks traded on some days.
At the center of the debate is the value of 350 microseconds. (One microsecond is one millionth of a second. It is also about 1/1,000th of how long it takes to blink.)
That is how long IEX would delay every order to buy or sell a stock.
An article , well worth your time.
