IEX held every order back by three hundred and fifty microseconds in thirty-eight miles of coiled cable, so that nobody could get ahead of the rest.
In 2014 the journalist Michael Lewis published “Flash Boys,” a book about how the American stock market works from the inside. Its hero was a Canadian trader, Brad Katsuyama, who one day noticed something strange. Every time he pressed the button to buy a large block of shares, the price on other exchanges managed to rise a split second before his order arrived there. Someone was seeing his order before it was filled and managing to buy first, so as to sell to him a little higher. These were high-frequency traders who put their servers in the same buildings as the exchanges’ servers, laid fiber-optic cable straight through the mountains of Pennsylvania and won millionths of a second. Katsuyama built his own exchange, IEX, where orders were deliberately delayed by 350 microseconds in thirty-eight miles of coiled cable, so that nobody could get ahead of anyone else.
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