4 ms·

FWIW: I used to work at the predecessor to Virtu Financial with Peter Kovac, who wrote an excellent counter argument book to flash boys. http://www.amazon.com/

by SEJeff 11y ago

FWIW: I used to work at the predecessor to Virtu Financial with Peter Kovac, who wrote an excellent counter argument book to flash boys. http://www.amazon.com/Flash-Boys-Insiders-Perspective-High-Frequency-ebook/dp/B00P0QI2M2 http://www.amazon.com/Flash-Boys-Insiders-Perspective-High-F... He's one of the most honest and intelligent people I've ever had the pleasure to work with in my entire career. He was at Madison Tyler while I was there roughly 4 years until the Virtu merger (at which point many of us left).

tptacek 11y ago
This book, for what it's worth, is fantastic. If you're interested in nuts-and-bolts how-stuff-works, and less in the screenplay-friendly narratives that Michael Lewis wanted to peddle, it's a much better book than Flash Boys itself was.
MichaelGG 11y ago
Yep, I mention that in the first paragraph :). I loved the book. It was fantastic. Both for explaining stuff, as well as totally smacking down Lewis's nonsense. It left me wanting to learn more. I'm currently reading Trading and Exchanges, as well as Market Microstructure in Practise (I wanted a newer book as stuff has changed in 2002 and 2010.)
gammarator 11y ago
Here's a lengthy critique of the Kovac book alleging it misreads Lewis's point: http://www.amazon.com/review/R28Y8AI4PIPYZ2/ref=cm_cr_dp_title?ie=UTF8&ASIN=B00P0QI2M2&channel=detail-glance&nodeID=133140011&store=digital-text http://www.amazon.com/review/R28Y8AI4PIPYZ2/ref=cm_cr_dp_tit... "Kovac misfires by supposing the "front-running" condemned in "Flash Boys" refers to a particular kind of abuse, and not surprisingly it's the kind he plans to refute. In common usage there are at least two meanings to the term. One common meaning is as shorthand for "front-running demand," which is what happens when someone tries to figure out whether your mutual fund or your pension fund is buying or selling stock, realizes that it will change supply-and-demand dynamics for the stock, affecting the price, and front-runs that demand to profit. Imagine if someone made a reasonable guess you needed milk, raced ahead of you to the only store in town to buy up all the milk before you got there, and then offered to sell you milk at a higher price than the store sold it to him; this is one example of front-running demand, just as described in "Flash Boys." (It's also called "trading ahead.") Another common meaning is "front-running a customer order," a type of insider trading, where a stock broker believes his own customer's order will change supply-and-demand and tries to profit from that; this is what Kovac apparently intends to refute, and it has nothing at all to do with "Flash Boys.""
- tptacek 11y ago
  This is a review written by someone who, by their own (repeated) admission, hasn't read past the introduction of the book; further, the premise of the review is that Kovac doesn't know what he's talking about vis a vis trading, which is something we know to be false.
  - SEJeff 11y ago
    Correct. Peter Kovac wrote the entire realtime risk and clearing system that is now live at Virtu (formerly California Applied Trading Science which split into EWT and Madison Tyler, which became Virtu. This is all public knowledge if you dig deep enough). Again, the source is I worked with him for several years.
- mrchicity 11y ago
  "Front-running demand" is just anticipating where prices will go. That's what all competitive trading is. At its core, that's what business in general is. Observing supply and demand playing out through public information is completely natural. The reason we have terms like "front-running" and "insider trading" and laws against those practices is because of ethical obligations between people. If I see a lot of women wearing blue dresses this season, and buy more anticipating they'll sell for a profit, that's just business. If my accountant also works for the shop on the next block and tells me they're about to buy lots of blue dresses this season, that's unethical.

by SEJeff 11y ago

tptacek 11y ago

This book, for what it's worth, is fantastic. If you're interested in nuts-and-bolts how-stuff-works, and less in the screenplay-friendly narratives that Michael Lewis wanted to peddle, it's a much better book than Flash Boys itself was.

MichaelGG 11y ago

Yep, I mention that in the first paragraph :). I loved the book. It was fantastic. Both for explaining stuff, as well as totally smacking down Lewis's nonsense. It left me wanting to learn more. I'm currently reading Trading and Exchanges, as well as Market Microstructure in Practise (I wanted a newer book as stuff has changed in 2002 and 2010.)

gammarator 11y ago

Here's a lengthy critique of the Kovac book alleging it misreads Lewis's point: http://www.amazon.com/review/R28Y8AI4PIPYZ2/ref=cm_cr_dp_title?ie=UTF8&ASIN=B00P0QI2M2&channel=detail-glance&nodeID=133140011&store=digital-text http://www.amazon.com/review/R28Y8AI4PIPYZ2/ref=cm_cr_dp_tit... "Kovac misfires by supposing the "front-running" condemned in "Flash Boys" refers to a particular kind of abuse, and not surprisingly it's the kind he plans to refute. In common usage there are at least two meanings to the term. One common meaning is as shorthand for "front-running demand," which is what happens when someone tries to figure out whether your mutual fund or your pension fund is buying or selling stock, realizes that it will change supply-and-demand dynamics for the stock, affecting the price, and front-runs that demand to profit. Imagine if someone made a reasonable guess you needed milk, raced ahead of you to the only store in town to buy up all the milk before you got there, and then offered to sell you milk at a higher price than the store sold it to him; this is one example of front-running demand, just as described in "Flash Boys." (It's also called "trading ahead.") Another common meaning is "front-running a customer order," a type of insider trading, where a stock broker believes his own customer's order will change supply-and-demand and tries to profit from that; this is what Kovac apparently intends to refute, and it has nothing at all to do with "Flash Boys.""

tptacek 11y ago
This is a review written by someone who, by their own (repeated) admission, hasn't read past the introduction of the book; further, the premise of the review is that Kovac doesn't know what he's talking about vis a vis trading, which is something we know to be false.
- SEJeff 11y ago
  Correct. Peter Kovac wrote the entire realtime risk and clearing system that is now live at Virtu (formerly California Applied Trading Science which split into EWT and Madison Tyler, which became Virtu. This is all public knowledge if you dig deep enough). Again, the source is I worked with him for several years.
mrchicity 11y ago
"Front-running demand" is just anticipating where prices will go. That's what all competitive trading is. At its core, that's what business in general is. Observing supply and demand playing out through public information is completely natural. The reason we have terms like "front-running" and "insider trading" and laws against those practices is because of ethical obligations between people. If I see a lot of women wearing blue dresses this season, and buy more anticipating they'll sell for a profit, that's just business. If my accountant also works for the shop on the next block and tells me they're about to buy lots of blue dresses this season, that's unethical.