“The market is rigged, the market is rigged,” so people say. It’s been a hot topic over the past ten years, although even ten years ago it wasn’t necessarily a new idea. I believe it was the financial journalist and author, Michael Lewis (who wrote The Flashboys and The Big Short, among many other bestsellers), who brought the notion of the rigged market into mainstream conversation. In the book The Flash Boys, Lewis put forth that trading firms, the market making firms responsible for trading on behalf of large institutions, were using technology to front run their trades. This technological advantage gives them an advantage of milliseconds in the execution of trades. Amplified by the volume of trading in which they engage, it results in significant financial gains. Consequently, the market being rigged in favor of certain institutional players became a popular topic of discussion.
