Stock Market Rigged

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The U.S. stock market is rigged in favor of high-frequency traders, stock exchanges and large Wall Street banks who have found a way to use computer-based speed trading to gain a decisive edge over everyone else, from the smallest retail investors to the biggest hedge funds, says Michael Lewis in a new blockbuster book, “Flash Boys.”

The insiders’ methods are legal but cost the rest of the market’s players tens of billions of dollars a year, according to Lewis, who spoke with Steve Kroft in his first interview about the book.

High-frequency traders have found ways to use their speed to gain an advantage that few understand, says Lewis. “They’re able to identify your desire to buy shares in Microsoft and buy them in front of you and sell them back to you at a higher price,” says Lewis. “The speed advantage that the faster traders have is milliseconds…fractions of milliseconds.”

Lewis says a former trader at the Royal Bank of Canada in New York, Brad Katsuyama, figured this out after he consistently failed to have his entire order filled at the price he wanted.

Click Here to watch the video report.

According to Wayne Morris, “We have been warning clients of this problem for the past 3 years. Our Indexed Annuities and Universal Life policies provide upside potential growth, but guarantee zero downside risk of loss.”

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Published in: on April 15, 2014 at 9:56 AM  Leave a Comment  

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