INFOGRAPHIC: How High-Frequency Trading Took Over Wall Street

Joel Anderson |

High-frequeny traders (HFTs) are among the hottest topics on Wall Street these days. This is due in no small part to the release of Flash Boys, the most recent book from author of Moneyball and The Blind Side Michael Lewis. In the book, Lewis details how, by hook or by crook, HFTs have managed to seize control of the stock market and are extracting billions of dollars from average investors by way of arbitrage created by being fractions of a second faster than everyone else.

But how did we get to this point? When did we go from handwritten orders getting carried to a crowded exchange floor to angry CEOs arguing about the nature of stock trading in front of a mostly-empty New York Stock Exchange?

Well, this infographic from Investoo.com provides a lengthy (though far from complete) history of how we got to the point where it made sense to build a $300 million cable from New York to Chicago just to shave a few miliseconds off of the time it would take information to travel between the two places. Because the only way of getting the markets to a state where they're truly fair and equitable is likely going to require some knowledge of how they got so far from that place to begin with.

 

 

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