The FBI is investigating whether high-frequency trading firms on Wall Street are manipulating the market and putting the average investor at even more of disadvantage when investing. The probe was sparked by new claims and interviews in Michael Lewis’s new book Flash Boys.
High-frequency trading is nothing new, but the computer algorithms used in the process have gotten more complex. These algorithms allow the firms to essentially see what other investors plan to do and jump in front of them to get ahead of trends.
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The big firms say that Lewis’s book is misleading, arguing algorithms are innovative and positive for the economy.
