MWE SHORT: Bill Harts – Modern Markets Initiative: How a Small Group of Traders Improved Markets for All

“The most liquid stocks in the world used to trade at a minimum spread of one-eighth, but was quite often trading at a quarter spread. If you were an average retail investor buying 100 shares, you would have been paying an extra $25 for that stock, just in terms of the spread costs (putting commission aside). Today, that quarter spread is less than a penny.”

The 2014 release of Michael Lewis’ book “Flash Boys” unleashed widespread criticism of the automated trading community amid Lewis’ assertion that markets are “rigged” against small investors. According to Bill Harts, CEO of the Modern Markets Initiative, nothing could be further from the truth.

He says retail investors have never had it so good. Just as Amazon drove down the cost of books, so too did electronic trading drive down the costs associated with investments.

He says, yeah, the automated trading community is mad about the Flash Boys controversy, but that the general public should be mad, too. Those who fled the market in the aftermath of the book’s release left tremendous opportunity on the table.



Other MarketsWiki Education Series’


MWE SHORT: Ben Van Vliet – The Nature of Competition

MWE SHORT: Ben Van Vliet – The Nature of Competition

“You can’t tell Derrick Rose or LeBron James he’s not allowed to fake out an opponent.”

Ben Van Vliet, Assistant Professor and Associate Director at the Illinois Institute of Technology, discusses the nature of competition in the financial industry and the impact of deception in the markets.