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The riveting story of a trading prodigy who amassed $70 million from his childhood bedroom--until the government accused him of helping trigger an unprecedented market collapse *Soon to be a feature film starring Dev Patel* On May 6, 2010, financial markets around the world tumbled simultaneously and without warning. In the span of five minutes, a trillion dollars of valuat The riveting story of a trading prodigy who amassed $70 million from his childhood bedroom--until the government accused him of helping trigger an unprecedented market collapse *Soon to be a feature film starring Dev Patel* On May 6, 2010, financial markets around the world tumbled simultaneously and without warning. In the span of five minutes, a trillion dollars of valuation was lost. The Flash Crash, as it became known, represented the fastest drop in market history. When share values rebounded less than half an hour later, experts around the globe were left perplexed. What had they just witnessed? Navinder Singh Sarao hardly seemed like a man who would shake the world's financial markets to their core. Raised in a working-class neighborhood in West London, Nav was a preternaturally gifted trader who played the markets like a computer game. By the age of thirty, he had left behind London's "trading arcades," working instead out of his childhood home. For years the money poured in. But when lightning-fast electronic traders infiltrated markets and started eating into his profits, Nav built a system of his own to fight back. It worked--until 2015, when the FBI arrived at his door. Depending on whom you ask, Sarao was a scourge, a symbol of a financial system run horribly amok, or a folk hero who took on the tyranny of Wall Street and the high-frequency traders. A real-life financial thriller, Flash Crash uncovers the remarkable, behind-the-scenes narrative of a mystifying market crash, a globe-spanning investigation into international fraud, and the man at the center of them both.


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The riveting story of a trading prodigy who amassed $70 million from his childhood bedroom--until the government accused him of helping trigger an unprecedented market collapse *Soon to be a feature film starring Dev Patel* On May 6, 2010, financial markets around the world tumbled simultaneously and without warning. In the span of five minutes, a trillion dollars of valuat The riveting story of a trading prodigy who amassed $70 million from his childhood bedroom--until the government accused him of helping trigger an unprecedented market collapse *Soon to be a feature film starring Dev Patel* On May 6, 2010, financial markets around the world tumbled simultaneously and without warning. In the span of five minutes, a trillion dollars of valuation was lost. The Flash Crash, as it became known, represented the fastest drop in market history. When share values rebounded less than half an hour later, experts around the globe were left perplexed. What had they just witnessed? Navinder Singh Sarao hardly seemed like a man who would shake the world's financial markets to their core. Raised in a working-class neighborhood in West London, Nav was a preternaturally gifted trader who played the markets like a computer game. By the age of thirty, he had left behind London's "trading arcades," working instead out of his childhood home. For years the money poured in. But when lightning-fast electronic traders infiltrated markets and started eating into his profits, Nav built a system of his own to fight back. It worked--until 2015, when the FBI arrived at his door. Depending on whom you ask, Sarao was a scourge, a symbol of a financial system run horribly amok, or a folk hero who took on the tyranny of Wall Street and the high-frequency traders. A real-life financial thriller, Flash Crash uncovers the remarkable, behind-the-scenes narrative of a mystifying market crash, a globe-spanning investigation into international fraud, and the man at the center of them both.

30 review for Flash Crash: A Trading Savant, a Global Manhunt, and the Most Mysterious Market Crash in History

  1. 5 out of 5

    Lily Herman

    Ah, there's no better time to read a book that examines that many problems with late-stage capitalism than during a pandemic being made worse by late-stage capitalism!!!! Liam Vaughan's Flash Crash is an immersive look at how a sloppy stew of bureaucratic fuckery, financial greed, unchecked wealth and privilege, and unbridled technocratic optimism all coalesced at the same time to create the perfect conditions for day trader Navinder Singh Sarao to perpetuate the flash crash of 2010. Vaughn does a Ah, there's no better time to read a book that examines that many problems with late-stage capitalism than during a pandemic being made worse by late-stage capitalism!!!! Liam Vaughan's Flash Crash is an immersive look at how a sloppy stew of bureaucratic fuckery, financial greed, unchecked wealth and privilege, and unbridled technocratic optimism all coalesced at the same time to create the perfect conditions for day trader Navinder Singh Sarao to perpetuate the flash crash of 2010. Vaughn does a impactful job showing the many sides of the debate surrounding Sarao's case. Is he a hero, a criminal, a conspiracy theorist, an arrogant libertarian, or all of the above? And are ~the markets~ even a good thing? At the center, however, is the important question of why Sarao, who was an outlier in the industry in more ways than one, became the person who paid the price, as opposed to folks who had far bigger roles in creating the problems with banking, trading, and financial regulation. Flash Crash has got some sections that get pretty technical, but Vaughan does a solid job working through terminology and showing how so many moving parts fit together. It may be of particular interest to fans of Michael Lewis' books (especially Flash Boys and The Big Short) as well as more atmospheric non-fiction reads like John Carreyrou's Bad Blood and Nick Bilton's American Kingpin.

  2. 4 out of 5

    David Wineberg

    Too crazy not to be true Financial investigative journalist Liam Vaughan seems to have had the time of his life putting together Flash Crash. But then, the story is so rich with characters and so bizarre in its nature, that as he admits at the end - someone had to write a book on it. It is a case of truth stranger than fiction. That cost investors billions, one memorable spring day. The Flash Crash was an afternoon in 2010 when the financial markets suddenly melted into almost nothing, then bounce Too crazy not to be true Financial investigative journalist Liam Vaughan seems to have had the time of his life putting together Flash Crash. But then, the story is so rich with characters and so bizarre in its nature, that as he admits at the end - someone had to write a book on it. It is a case of truth stranger than fiction. That cost investors billions, one memorable spring day. The Flash Crash was an afternoon in 2010 when the financial markets suddenly melted into almost nothing, then bounced back to almost where they started that morning. For a short time (minutes!), shares of major corporations traded for a penny or less, while others shot to $100,000 a share. Blame was needed, and investigations led to a Kansas City financial house which put in a huge sell order, rather inexpertly. But things are never that simple. In this case, it transpired that a single man, working from the edge of his bed in his parents' house in Hounslow outside London, was manipulating the markets, abusing the system until it broke. Navinder Sarao was in his early thirties and unemployed. He still lived with his parents, and spent his weekdays playing the S&P futures for all they were worth, and more. He would routinely place trades worth billions of dollars, canceling most of them, and walking away with six figures of pure profit for half a day's work. Bizarrely, he wasn't in it for the wealth. He lived at home, had an ordinary computer, drove a moped, and let no one know what he was doing. His parents, one ill and one working a counter in a store, never knew what he did all day. They had no clue he had run up profits approaching a hundred million dollars from his childhood bedroom. Perhaps even more bizarrely, he proceeded to lose it all on Ponzi schemes and shady con men, and when he was caught, he couldn't make bail or pay lawyers. Sarao had adapted trading software to stack his orders at the back of their price point, and any time the market traded close by, the software would cancel his orders. So he never had to actually buy. In this way he could make it appear there was either huge demand which would send the market up, or huge selling pressure which would send it down. Either way, he was ready to profit with actual purchase orders he would hold for seconds before cashing out. None of this is exaggerated. Here's what Vaughn says about Sarao's trading: "By any measure, NAVSAR was an outlier. In the twelve days the CFTC ended up selecting to illustrate the entity’s activity, its layering algorithm canceled or modified orders 182,000 times, corresponding to $35 trillion in notional trades—double the size of America’s gross domestic product. On eight of those days, not a single one of those orders was hit. The size of the orders was also immense: an average of 504 contracts, where the average across the market was seven." Contracts were $75,000 each. Four years after the event, after every American agency had its crack at assigning blame, a trader looked a the record and proved everyone - including himself - wrong. “I got pretty obsessed,” he (still known as Mr. X today) says. “Based on the data I guessed it had to be the work of a large prop trading firm, maybe with an internal clearing arm to shield it from the authorities. The scale and the audacity of the behavior were so massive I couldn’t imagine it was one individual. As it turned out I was very wrong.” He became a whistleblower, reopening the case just before the statute of limitations kicked in, and that led to Sarao and an international effort to bring him to justice. Sarao never thought he did anything wrong. He thought of himself as a victim of High Frequency Trading algorithms. This was just him fighting to level the playing field. He proudly videoed his screen while trading (providing hours of fascinating insights for investigators who seized his computer). All these attitudes, approaches, tactics and sheer thoughtlessness, along with crudeness, rudeness and total lack of respect for anyone he dealt with, led to a diagnosis of Aspberger's, once he was in custody. It made some sense out of the crazy story. His math skills were awesome, his instincts spot on, and his reaction time lightning quick. He was a fearless trader, but a failing human being. The book is fast-paced, extremely engaging, and an easy read, despite the complexity of futures trading. Vaughan has done an excellent job of making it accessible and even exciting. It's a hard one to put down. And it's not over! In January 2020, after this book was completed and after the American authorities were finally finished with Sarao as a co-operating source, the court finally sentenced him - to two years at home. Not only is this ridiculous for all the damage he did, but it is really all Sarao wanted anyway - to be left alone at home in his familiar bedroom where he was in control and productively engaged. Worse, the US court has no enforcement power in the UK, so the sentence is meaningless. It is the perfect capstone to a story beyond belief. David Wineberg

  3. 4 out of 5

    Girish

    ‘Imagine a system where the biggest, most powerful players get to tell the regulators and the exchanges who to go after based on who is taking money off them,’ says one prop trader. ‘Welcome to the futures market.’ Welcome to the big bad world of trading where millions are made and lost in a day.This non-fiction account by journalist Liam Vaughan traces one smart man's genius in bringing the financial markets to it's knees. Navinder Sarao is the socially awkward trading prodigy who made millions ‘Imagine a system where the biggest, most powerful players get to tell the regulators and the exchanges who to go after based on who is taking money off them,’ says one prop trader. ‘Welcome to the futures market.’ Welcome to the big bad world of trading where millions are made and lost in a day.This non-fiction account by journalist Liam Vaughan traces one smart man's genius in bringing the financial markets to it's knees. Navinder Sarao is the socially awkward trading prodigy who made millions from his small bedroom in his parent's house in UK. Grown from the traditional click and trade trading desks - he finds the game has changed thanks to High Frequency Trading (HFT) programs and algorithms which play on milliseconds of advantage. In a David-vs-Goliath story, Nav builds his own logic which allowed him to take on the giants. May 6, 2010, trillion dollars of valuation was lost in 3-4 hours of trading. Nav's trading practices was just one reason (5-6 mins), but then he is dubbed as the man who caused flash crash. The book goes beyond that and tells his entire story and the story of the investigation. A lot to learn and the author does a commendable job of simplifying the terminologies without dumbing it down. Some parts could have been edited like Nav's investments and his advisors who are skimming him. Other than that, it is a complete story and Mr.Vaughan has done a good work of making it a script worthy of a movie. A well written non-fiction that reads like a novel. Note: I would like to thank Netgalley and 4th Estate and William Collins for providing the ARC of the book

  4. 4 out of 5

    Lou

    Flash Crash is probably not the brightest book to opt to read when our economy is shrinking seismically due to our current predicament. It feels very ironic to be publishing it right now when it couldn't be be any more relevant and timely. Of course the reasoning is very different from the flash crash of May 6, 2010. Many of the missing details have been filled in by the author and it is clear he has carried out extensive research into the topic. It quickly emerges as a real and quite surprising Flash Crash is probably not the brightest book to opt to read when our economy is shrinking seismically due to our current predicament. It feels very ironic to be publishing it right now when it couldn't be be any more relevant and timely. Of course the reasoning is very different from the flash crash of May 6, 2010. Many of the missing details have been filled in by the author and it is clear he has carried out extensive research into the topic. It quickly emerges as a real and quite surprising page-turner. It explores the issues that led up to one of the contemporary United States’s most devastating trillion-dollar stock market crashes in history lasting a mere 36 minutes with a significant portion of the blame being laid at the door of British financier Navinder Singh Sarao. He was arrested for market manipulation but was only sentenced to a year of house arrest due to his cooperation with authorities.he appears to have been made an example of given his crimes are the same crimes being committed by traders to this day with no repercussions. I have to admit that at times this felt like fiction; in fact it felt like a political/economic thriller with some incredible tension and a building up of suspense and unlike most nonfiction I raced through quite a few of the interesting sections; it's a testament to Vaughan's writing skills that it read so easily. It’s fascinating, well informed and will appeal to a wider audience than just those with an interest in the stock market. The writing is fluid and the whole book is a compulsively readable rollercoaster of peaks and troughs along the way. The perfect phrase to accompany this book? The truth really is stranger than fiction...

  5. 5 out of 5

    Gorab

    3.5 My biggest takeaway: Automation is the key! This book details on how the markets suddenly crashed in May 2010 for around 30 mins, and then came back to normal. The main culprit - using automated algorithms to manipulate and execute huge transactions within nanoseconds! Loved this quote: “One day, years from now,” a trading desk “will typically consist of three things. A man, a dog, and a computer. The computer’s job will be to trade. The man’s job will be to feed the dog. The dog’s job will be t 3.5 My biggest takeaway: Automation is the key! This book details on how the markets suddenly crashed in May 2010 for around 30 mins, and then came back to normal. The main culprit - using automated algorithms to manipulate and execute huge transactions within nanoseconds! Loved this quote: “One day, years from now,” a trading desk “will typically consist of three things. A man, a dog, and a computer. The computer’s job will be to trade. The man’s job will be to feed the dog. The dog’s job will be to bite the man if he goes anywhere near the computer.”

  6. 5 out of 5

    Kavitha Sivakumar

    The story need to be told. Kudos to the author for explaining industry specific jargon in lay terms. However, the author dragged the story with unnecessary details by explaining the background of many people involved in this case. This slow down the momentum of the story. The author captured the flash crash incident very well.

  7. 5 out of 5

    Indrani Sen

    A nonfiction thriller. A deeply satisfying read. The balance of the technical with the personal was brilliantly achieved. I would highly recommend you to read this story of a lone extraordinary man bringing down the market on its knees. Morality and ethics aside, the victory of a small man against the highly powerful and sophisticated HFTs is an intoxicating read.

  8. 5 out of 5

    Karen

    In Flash Crash, a trader in the UK treated trading as a game without any concern for the damage he was doing or the (lack of) ethics of his actions. He amassed huge sums of money while sometimes causing wild fluctuations in the market. Unfortunately, market swings can have real (detrimental) impacts on the holdings of other individual investors. This is especially true due to many corporations having reduced employee pension obligations in favor of pushing employees to self-fund 401(k)s for reti In Flash Crash, a trader in the UK treated trading as a game without any concern for the damage he was doing or the (lack of) ethics of his actions. He amassed huge sums of money while sometimes causing wild fluctuations in the market. Unfortunately, market swings can have real (detrimental) impacts on the holdings of other individual investors. This is especially true due to many corporations having reduced employee pension obligations in favor of pushing employees to self-fund 401(k)s for retirement via the stock market. The "investing as a game" mentality is also an inherent aspect of recent news about GameStop stock: "How WallStreetBets Pushed GameStop Shares to the Moon" https://www.bloomberg.com/news/articl... I found Flash Crash interesting. Although there were a few sections where the technical details slowed the pace, it's a worthwhile read especially for those with stock holdings.

  9. 5 out of 5

    Richa Sharma

    I was in my college when this flash crash occured and I can say, I was clueless at that time about this recession. Then I forgot about it. But when I started reading this book, I found this original story quite interesting. I googled about Nav side by side. The beginning and the end part of the book is good. I had to drag the book in the middle. Nav was a genius and I liked how he used his mind when he was doing trading positively. He was making millions already, enjoying his game, I don't know I was in my college when this flash crash occured and I can say, I was clueless at that time about this recession. Then I forgot about it. But when I started reading this book, I found this original story quite interesting. I googled about Nav side by side. The beginning and the end part of the book is good. I had to drag the book in the middle. Nav was a genius and I liked how he used his mind when he was doing trading positively. He was making millions already, enjoying his game, I don't know why he asked to make a software and did fraud. He was not even spending that money on anything but on trading itself. He was just like, how video game players like to find cracks and cheats of their game, he had just done that. Curious to know whether in future, he will do something genius-like again in a postive way.

  10. 4 out of 5

    Harley

    This was a delightful read. I know little about stock markets, but Vaughan makes the subject very interesting. He explains different techniques for trading in ways that even I can understand. Navinder and the people he surrounded himself with were very interesting to read about. The ending actually kind of surprised me and made me smile. This book was a great mix of biography and story-telling. It never really felt dry and there always seemed to be some kind of interesting drama happening.

  11. 5 out of 5

    Kuang Ting

    Flash Crash is a business book recently longlisted for Financial Times and McKinsey Business Book of the Year Award 2020. It was published in May and quickly got media’s attention. It’s a page-turner with real-life story that is more exciting than fictions. It’s hard to put down once you start reading. This is a perfect example of story-driven narrative that offers fresh insights at the same time. If you have ever read books by Michael Lewis (author of The Big Short, Flash Boys, etc) and you lik Flash Crash is a business book recently longlisted for Financial Times and McKinsey Business Book of the Year Award 2020. It was published in May and quickly got media’s attention. It’s a page-turner with real-life story that is more exciting than fictions. It’s hard to put down once you start reading. This is a perfect example of story-driven narrative that offers fresh insights at the same time. If you have ever read books by Michael Lewis (author of The Big Short, Flash Boys, etc) and you like his writing. This book will not let you down. The author of the book is Liam Vaughan. He is a veteran business journalist for Bloomberg based in London. He has covered the financial market, especially the London financial world, for over a decade. His journalistic works are impactful and has won several journalistic awards. Flash Crash is his second book. The first book The Fix focuses on the notorious Libor scandal. It tells the conspiracy how Libor rate was manipulated by a small group of insiders. Libor rate is one of the most important interest rates in the world because it is the reference for international foreign exchange market. Over $5 trillion are traded everyday globally. The scale of impact is beyond imagination. Liam led a group of reporters to uncover the scandal and resulted in 10 billion dollars fines on several major investment banks. It sounds unbelievable, right? Actually, the story of Liam’s second book Flash Crash may seem even more crazy. The Libor scandal was the result of a group of people. However, the story of Flash Crash centered on one person. The protagonist (or antagonist in this case) was Navinder Sarao, a point-and-click trader based in a London suburb (Hounslow, West London) near Heathrow Airport. He was allegedly to cause one of the most dramatic stock market crashes in human’s history. On 6 May 2010, American stock market suddenly plunged deeply without warning. It led to one-trillion-dollar loss but quickly rebounded after 36 minutes. The notional amount of Sarao’s manipuation exceeded 35 trillion dollars, two times larger than America’s GDP. When Sarao was arrested in 2015, everyone was asking fervidly…Who is this guy? Nicked named ‘Hound of Hounslow’, an analogy to the ‘Wolf of Wall Street’, Sarao is now 42 years old. He was thought to earn $40 million from 2009 to 2015. He is a self-taught genius on investment. He doesn’t have any shining educational degree or working experience. In the world of high frequency trading, he scammed the most advanced computer algorithm single-handedly. You might think he was equipped with super weapon. Surprisingly, he did all this in a bedroom in his parent’s ordinary two-story residence house. Sarao’s bedroom smelled a bit moldy. The room was messy. There was even a stuffed tiger doll (size of a Labrador!) in the room. At the end of his single-size bed, there was a normal computer connected to three screens. This computer was the kind that everyone could easily buy one at any stores. It blowed investigators’ mind. They didn’t expect this shabby place was the ground zero of ‘flash crash’. It turned out Sarao actually fooled the whole world from here, thousands of miles away from Wall Street. You must feel curious. How did pull this stunt? The technique he used is called ‘spoofing’, an illegal investment manipulation technique. The logic is simple. Sarao placed a very large order on either buy or sell side and other investors would follow like a herd. Sarao observed others (including computers) took similar investing strategy. He did the reverse engineering and set up an easy automation program to place false orders. The program would cancel the orders just before execution and then quickly place the ‘real’ orders to reap the benefits. That is, other investors would still execute the orders that Sarao wanted them to place. It made price increase or decrease. Therefore, Sarao could earn the difference between the prices. After the flash crash, everyone was discussing what actually happened. Scholars did academic research. Investment experts shared opinions. Some people accused computers of disrupting market… No one knew the answer. The US Government set up special unit to investigate the incident. It took 5 years to trace the origin to Sarao. Sarao was extradited to the USA and faced up to 380 years in prison. What followed was another surprising turn of the story. Sarao was diagnosed with Asperger’s syndrome. He played the market like playing a computer game. He didn’t know or care how to spend the money. In fact, he lost most of the money to con artists who cheated him into bad investment projects. Sarao was a genius in investment world, but he couldn’t take good care of himself in the real world. He cooperated well with American Government and taught them insider’s wisdom. This led to convictions of several other fraudsters. Sarao made great contributions for redemptions. In the end, Sarao was sentenced one year at home in the custody of his parents. He was grounded for one year after causing flash crash. The spectacular rise and fall of Sarao is so dramatic that is hard to believe. In fact, the story is now being adapted into a film by an Oscar-winning production company. Flash Crash is an allegory for every professional in the business world. It showcases the importance of integrity and trust in the financial market. It’s also an alarming call for cyber crimes. It will certainly give readers new ideas about uncertainty.

  12. 5 out of 5

    Jacob Langham

    Wow, what a story! This is a real piece of investigate journalism. The story of Nav and his role in the 2010 Flash Crash was quite extraordinary. One introverted man in a poor area in London was able to crash an entire financial market with a mouse, line of code and a McDonald’s burger. Nav exposed the true corrupt and unethical groundings in which the global financial system has been built upon whereby institutional ‘whales’ are able to dictate supply and demand movements, to the detriment of h Wow, what a story! This is a real piece of investigate journalism. The story of Nav and his role in the 2010 Flash Crash was quite extraordinary. One introverted man in a poor area in London was able to crash an entire financial market with a mouse, line of code and a McDonald’s burger. Nav exposed the true corrupt and unethical groundings in which the global financial system has been built upon whereby institutional ‘whales’ are able to dictate supply and demand movements, to the detriment of hardworking retail investors. Ultimately, although Nav’s story is a tad unfortunate, it was written with humour and thrill whereby I consistently wanted to know more. Very well written Liam Vaughan!

  13. 4 out of 5

    Rennie

    3.5. It’s very entertaining and fast-reading but like a long article. Some context was lacking, as was Navinder Sarao’s own take on what he did, although that’s excusable as he hadn’t been sentenced yet. Still, when he’s quoted it’s intriguing enough to make you curious about what else he has to say. It does learn you a thing or two about the markets and the insane lack of regulation and the dinosaur technology regulators have compared to the high-tech tricksiness traders employ. Like well we wou 3.5. It’s very entertaining and fast-reading but like a long article. Some context was lacking, as was Navinder Sarao’s own take on what he did, although that’s excusable as he hadn’t been sentenced yet. Still, when he’s quoted it’s intriguing enough to make you curious about what else he has to say. It does learn you a thing or two about the markets and the insane lack of regulation and the dinosaur technology regulators have compared to the high-tech tricksiness traders employ. Like well we would LOVE to know when someone does something naughty but it all happens in a billionth of a second and we can’t monitor every single little thing so whatcha really gonna do about it? Just keep on keeping on til somebody pulls the rug out from under it all, I guess! When that someone has amassed $70 million while executing these trades from his childhood bedroom and then loses all his money in a Ponzi scheme it does make for a good story though.

  14. 4 out of 5

    Tony WANG

    A decent read about the how manipulative the financial market truly is, as well as some of the ponzi schemes used by some HFT quants. One of the tactics used includes fake buy/sell limit orders on the Level 2. A highly recommended read for all market participants.

  15. 5 out of 5

    Satish Vijaykumar

    Zen mode low profile Prop Trader beating the HFTs and Hedge Funds to losing on Ponzi schemes. This has to made into a Movie.

  16. 5 out of 5

    J

    Well written. Every page is full of gems, and includes many interesting findings by the author's original research on how Nav Sarao went to make many millions reading the 'ladder' (a stock exchange's order book) and optimized his trading strategy. I was unable to stop reading it. I even read it during work breaks. Well written. Every page is full of gems, and includes many interesting findings by the author's original research on how Nav Sarao went to make many millions reading the 'ladder' (a stock exchange's order book) and optimized his trading strategy. I was unable to stop reading it. I even read it during work breaks.

  17. 5 out of 5

    Andi

    I love stories that have to do with odd crimes, or of odd happenings in the US. I was excited to see this was up for grabs as an ARC. I know little to nothing of stocks or how stocks actually work, but I want to thank Liam Vaughan for explaining it and in such a way that makes sense that helped me follow along with what Nav was doing and what everyone around him was getting into. The story itself is simple: college kid decides to find a job, job ends up being trading/selling stocks for a company, k I love stories that have to do with odd crimes, or of odd happenings in the US. I was excited to see this was up for grabs as an ARC. I know little to nothing of stocks or how stocks actually work, but I want to thank Liam Vaughan for explaining it and in such a way that makes sense that helped me follow along with what Nav was doing and what everyone around him was getting into. The story itself is simple: college kid decides to find a job, job ends up being trading/selling stocks for a company, kid ends up being really smart with numbers and algorithms that he goes off on his own. There, he treats the entire thing like an unbeatable video game - he has to keep raking up money to the point where he has no limits just to see how high he could go. Crazy enough he never spent any of it, he just keeps putting it into savings. I really don't have a reason why I rated it down a star. Maybe because I expected more drama? Or more entanglements? Though Mr. X is salty and I give him credit for going in there and figuring out what Nav was up to.

  18. 4 out of 5

    Antonio Skarica

    Very fun and interesting read. The author does a great job of telling the overarching story while steadily dispelling the myth of a lone trader who caused the flash crash that’s been shared in the media. Quality descriptions of HFT and regulatory challenges.

  19. 5 out of 5

    Csimplot Simplot

    Excellent!!!

  20. 4 out of 5

    Sangkyu Lee

    On 6 May 2010, the US stockmarkets broke. Dow Jones dropped by some 9% within minutes before immedaitely recovering most of the losses. Accenture traded at 1 cent per share, and Apple, at $100,000. The Flash Crash, as it became known, remained a puzzle. Years later, it emerged that a lone trader living in his parents' house in Houslow may have been behind the crash. The book is an excellent, informative and entertaining chronicle of this eccentric character, Navinder Sarao. Ok, well so it wasn't On 6 May 2010, the US stockmarkets broke. Dow Jones dropped by some 9% within minutes before immedaitely recovering most of the losses. Accenture traded at 1 cent per share, and Apple, at $100,000. The Flash Crash, as it became known, remained a puzzle. Years later, it emerged that a lone trader living in his parents' house in Houslow may have been behind the crash. The book is an excellent, informative and entertaining chronicle of this eccentric character, Navinder Sarao. Ok, well so it wasn't that clear that Sarao ended up causing the crash itself. Behind that probably was a lot of unfortunate coincidences, including the rapidly increasing high-frequency automated market activity, old fashioned human errors, and some regulatory idiosyncracies that distorted behaviour. What was clear, however, was that Sarao took advantage of how some market participants (including the algorithms behind high-frequency trades) took into account bid and offer signals to generate trade instructions. To achieve this, he constructed a strategy which involves sending an enormous number of buying and selling signals without any intention to fulfill the trades to manipulate prices of certain traded securities, and taking positions to profit from them. And the profits came in. Working mostly alone, he racked up some $65 million in trading profits, occasionally pulling in daily profits that ecipsed the annual salaries of the biggest Wall Street banks. He was methodical, unperturbable, and extremely fast in decision making and actions during the trading sessions. He explained once that he was trading 'people's fear and greed' - and opportunities to do so abounded during the market turmoils in 2008 and then in 2010. On the fateful day of the unprecedented crash, Sarao used the same strategy and placed a prodigious number of bets to profit from market drop. Whether doing so ultimately was a cause of the market dysfunction is in question, but he became the first person to be extradited and to plead guilty for market spoofing. As the investigators built a case against Sarao, they were confounded by this young multimillionnaire, who lived and worked from his childhood bedroom of his parents' house in the working class suburbs of London. Apart from a £5,000 car he didn't seem to have bought anything, he didn't seem to have much of a social or romatic life, and he didn't even seem to take much pleasure in boasting his superhuman ability to achieve the seeming impossibility - beating the superfast algorithmic traders with almost unlimited budget for technology set up. In fact, in a curious twist, he ended up plowing most of the profits he generated into what later appeared to be a Ponzi scheme. He was neither the greedy show-off type, or even an evil mastermind sort. Instead of a minumum 6+ years' federal imprisonment, Sarao managed to struck a deal with the authorities to help them understand the arcane world of modern traders, including filming instructive videos still being used for training. He was then allowed to fly home to serve the limited remaining sentence in his parents' house, starting in January 2020. A month later, nationwide lockdown began.

  21. 4 out of 5

    Sherry Zhuge

    The book is a must read if you want to know more details about the 2010 flash crash and the development in the trading world that has led up to this blowup. It is however not suited for those who wants a deep dive into the complexity of HFT as it revolves around the lone wolf (Navinder Sarao, an individual trader) not the the HFT shops. It provides a unique perspective into the flash crash and therefore inevitably lacks the details about the roles that big banks and HFT shops (such as Citadel) p The book is a must read if you want to know more details about the 2010 flash crash and the development in the trading world that has led up to this blowup. It is however not suited for those who wants a deep dive into the complexity of HFT as it revolves around the lone wolf (Navinder Sarao, an individual trader) not the the HFT shops. It provides a unique perspective into the flash crash and therefore inevitably lacks the details about the roles that big banks and HFT shops (such as Citadel) play in the whole story. This is more of a book that chronicles ex- and post-flash crash trading life of Nav , the enigmatic market savant who was charged for contributing to the market crash on 5/6/2010 and other illegal trading activities, than a recount of the Flash Crash and its how, why and what. I like how the author details Nav's evolving trading practice and how he interacted with financial advisors, and software engineers to improve his own trading and money system. The early days of Nav's trading experience was as dramatic as it was realistic. He is young, poor and marginalized, but at at the same time gifted with strong capability in mathematics and memory. He put his scarce resource into trading, a highly specialized and demanding career and has proved to be the master of it despite his growing ego and recklessness. The book offers a general view of how trading in the pit got replaced and challenged by electronic market and bots in the past. It also provides anecdotes in the history (dating back to the Exchange Alley in London in the early 18th century) to demonstrate how the tactic - spoofing has been used throughout the history of trading for self-profit. It's funny that many think of spoofing in trading as normal and legitimate as bluffing in poker. There is no nuts and bolts about trading in the book. The author explained terminology such as spoofing, layering, and front-running better than the CFA text boob does. The other interesting and supplementary block of the book is the "Ponzi Scheme" where Nav is the innocent victim. It has nothing to do with Flash Crash, but it is an important part in understanding the change of Nav's identify, from a nerdy trader to an investors with tens of millions invested in complex business arrangement, such as offshore tax evasion and worldwide alternative investment (agriculture and new energy). Regulatory bodies (SEC, CFTC), major market participants (CME) and whistle blowers are indispensable to unfolding the whole story spanning over a decade. However, the opposite conclusions drawn from the two investigation (5 years apart) makes it clear that the flash crash happened in that lazy afternoon was a result of the aggressive trading strategies, runaway algorithms as well as CME technical issues. Without proper execution governance across the HFT industry and continuous tech improvement in major exchanges, the market stands vulnerable to unprecedented attack or unintentional breakdown. The fact that HFT deals with financial information in nanoseconds and that its Sharpe Ratio could be tens of times higher than a traditional buy-and-hold strategy make it even more difficult to be effectively regulated with the ever-increasing complexity and huge vested interest and profits involved.

  22. 5 out of 5

    Gordon Wiebe

    When the financial markets went into a 30-minute tailspin on May 5, 2010, investors were already on edge. Carnage from the 2008 Financial Crisis was still fresh on everyone’s mind. So, when the S&P 500 index dipped 9% in 30 minutes and then recovered just as quickly, traders, investors and speculators needed an explanation. What could account for such a rapid and random swing? Thanks to the work of financial journalist, Liam Vaughan, readers are presented with the best explanation yet. Flash Crash When the financial markets went into a 30-minute tailspin on May 5, 2010, investors were already on edge. Carnage from the 2008 Financial Crisis was still fresh on everyone’s mind. So, when the S&P 500 index dipped 9% in 30 minutes and then recovered just as quickly, traders, investors and speculators needed an explanation. What could account for such a rapid and random swing? Thanks to the work of financial journalist, Liam Vaughan, readers are presented with the best explanation yet. Flash Crash tells the story of U.K. Futures Trader, Navrinder Sarao – the Hound of Hounslow, who was blamed by the U.S. Department of Justice and charged for “spoofing.” Spoofing is where a trader posts a “bid” or “ask” and then withdraws the order prior to it being filled. It’s a strategy employed by some traders as a means of confusing trading algorithms and computer trading programs. Some consider that “market manipulation.” What makes this story so compelling is “Nav,” the protagonist. He is the son of Indian immigrants and he builds a monumental fortune trading from the second floor bedroom of his parents home. He’s no Jordan Balfour and he never draws attention to himself. Yet, our non-descript day trader gets caught in the currents of global politics, markets, schemes, scams and skullduggery. Vaughan presents an expansive, well researched story that is enthralling and captivating. The narrative and writing are easily on par with Michael Lewis‘, The Big Short, Bethany MacLean’s “The Smartest Guys in the Room,” Roger Lowenstein’s “When Genius Failed,” Christine Richard’s, “Confidence Game,” and Andrew Ross Sorkin’s, “Too Big to Fail.” It plays on the “truth is stranger than fiction” motif. It’s destined to be a classic and required reading for future traders and portfolio managers.

  23. 4 out of 5

    Jan

    This review has been hidden because it contains spoilers. To view it, click here. On May 6, 2010, financial markets around the world tumbled simultaneously and without warning. From the book description: "In the span of five minutes, a trillion dollars of valuation was lost. The Flash Crash, as it became known, represented the fastest drop in market history. When share values rebounded less than half an hour later, experts around the globe were left perplexed. What had they just witnessed? Navinder Singh Sarao hardly seemed like a man who would shake the world's financial mark On May 6, 2010, financial markets around the world tumbled simultaneously and without warning. From the book description: "In the span of five minutes, a trillion dollars of valuation was lost. The Flash Crash, as it became known, represented the fastest drop in market history. When share values rebounded less than half an hour later, experts around the globe were left perplexed. What had they just witnessed? Navinder Singh Sarao hardly seemed like a man who would shake the world's financial markets to their core. Raised in a working-class neighborhood in West London, Nav was a preternaturally gifted trader who played the markets like a computer game. By the age of thirty, he had left behind London's "trading arcades," working instead out of his childhood home. For years the money poured in. But when lightning-fast electronic traders infiltrated markets and started eating into his profits, Nav built a system of his own to fight back. It worked-until 2015, when the FBI arrived at his door. Depending on whom you ask, Sarao was a scourge, a symbol of a financial system run horribly amok, or a folk hero-an outsider who took on the tyranny of Wall Street and the high-frequency traders." I didn't really understand the trading lingo, I think it is complicated and for an elite group. But I found the story fascinating in what he got away with (almost!) Interesting that with al the money he scammed he served very little jail time- jail was just 'too stressful' for his Asperger's personality. Okay then. . . .

  24. 4 out of 5

    David

    Well written and thoroughly researched, this was a very enjoyable piece of investigative financial journalism. The story itself is so outlandish its hard to believe all of this actually happened. A single day trader with Aspergers was able to control one of the most traded financial markets from his bedroom in his parent's house, played a key role in one of the biggest and most mysterious market crashes of all time, and became a multimillionaire in the process, giving most of that money to unscr Well written and thoroughly researched, this was a very enjoyable piece of investigative financial journalism. The story itself is so outlandish its hard to believe all of this actually happened. A single day trader with Aspergers was able to control one of the most traded financial markets from his bedroom in his parent's house, played a key role in one of the biggest and most mysterious market crashes of all time, and became a multimillionaire in the process, giving most of that money to unscrupulous characters running Ponzi schemes and offshore companies. It's no wonder a Hollywood movie is in the works. I also enjoyed Vaughan's book "The Fix" on the Libor scandal, but this is definitely a step up into Michael Lewis territory. All the characters, including seemingly minor ones, are fleshed out and given background stories. Mostly this engages the reader into the story, but occasionally it seems slightly excessive and drags down the momentum. The fact the central figure of Nav is not given a voice due to still being part of criminal investigations is also a shame, as his personal view on events would have been interesting to hear. Although HFT is touched upon throughout, the focus is very much on the side of human traders and their interactions with the algos. For a better view on HFT itself its better to read Lewis' "Flash Boys".

  25. 5 out of 5

    Ignacio

    A riveting story of a math wiz and one of the greatest (and fastest) market crashes in history, as well several other interconnected fraud/fraudsters. This book does a great job explaining and simplifying how the futures market work, and how Nav Sarao (the young British math wiz trader), was able to manipulate the market to his favor. It is a quick read, and will keep you engaged from beginning to end. The author does a good job presenting the facts, and telling a story. However, I think in occa A riveting story of a math wiz and one of the greatest (and fastest) market crashes in history, as well several other interconnected fraud/fraudsters. This book does a great job explaining and simplifying how the futures market work, and how Nav Sarao (the young British math wiz trader), was able to manipulate the market to his favor. It is a quick read, and will keep you engaged from beginning to end. The author does a good job presenting the facts, and telling a story. However, I think in occasions, the author simplifies the story too much, and lacks depth in terms of characters, voices, and background. I would have liked to hear more from Nav Sarao, get into his brain, understand his principles a little better, understand how his mind works (specifically around performing ultra fast calculations and trendspotting). I would have also liked to read more about Alejando Garcia, and his shady fraudulent operations - I think that by itself could be its own book. This book presents interesting debate questions about how the market works, and how (while not easy), can be manipulated. It is a scary thought, and it makes you question about how fair is the "fair market" - ironically, this is one of the drivers that pushed Nav Sarao to act this way - a way to protest, and push back against "legal" market manipulators. This is an investigate book, and so if you enjoy other investigative books such as Bad Blood, Red Notice, etc. you will probably enjoy this book as well.

  26. 4 out of 5

    Lord Zion

    Would someone who had no interest or knowledge of the stock market and how things (kind of) work find this book any good? I'm not sure. It is a re-telling of an extraordinary event somewhat accidentally created by an extraordinary individual, with various twists and turns along the way, but it is not exciting enough, I don't feel, for the story to extend beyond those with an interest in it. Having said that, I really enjoyed it a lot. I am interested in the stock market and invest a lot myself an Would someone who had no interest or knowledge of the stock market and how things (kind of) work find this book any good? I'm not sure. It is a re-telling of an extraordinary event somewhat accidentally created by an extraordinary individual, with various twists and turns along the way, but it is not exciting enough, I don't feel, for the story to extend beyond those with an interest in it. Having said that, I really enjoyed it a lot. I am interested in the stock market and invest a lot myself and have done since 2016. I have read many books on investing and investments but they have all been educational, ie, how-to books. If anything, this is a how-not-to book and I wasn't sure how dry it would be (as most investment books are, rather) but, as it was an event I was curious about, I thought I would "risk it". Glad I did. Would highly recommend it to anyone with a slight interest in the machinations of the stock market or someone that trades/invests. If you bought and enjoyed "The Big Short", maybe give this a go. That is next on my reading list so unsure if they compare favourably but the author does mention it a couple of times in the book so am assuming he was somewhat inspired by it.

  27. 5 out of 5

    Dennis Willems

    Flash Crash offers an insight into the workings of the professional stock market: the volumes as traded by the main character (Nav) are too large to comprehend in personal finance terms and the description of the trading techniques offers a great insight into High Frequency Trading practices. In case you still thought you could have some kind of smart moves in the stock market as a private investor, those thoughts are quickly vaporized once you learn that this is what goes on in the order book o Flash Crash offers an insight into the workings of the professional stock market: the volumes as traded by the main character (Nav) are too large to comprehend in personal finance terms and the description of the trading techniques offers a great insight into High Frequency Trading practices. In case you still thought you could have some kind of smart moves in the stock market as a private investor, those thoughts are quickly vaporized once you learn that this is what goes on in the order book once you place your stock orders. The books starts strong with a storytelling style about Nav and his co-traders at the different firms. Also the link to trading in the early days offers descriptions which stimulate the imagination. However, as the story progresses, the book becomes more and more factual in its writing style. Even though the book continues to be an interesting read about the (quite recent) investigations and Nav’s trial, I feel there should be more interesting, shocking and wild storytelling possible around the characters in Nav’s life story. The truly interesting book would be the one where Nav and/or his financial advisors themselves would pick up their pens and write up the stories of their life in all flashy detail.

  28. 5 out of 5

    Rick Wilson

    I enjoyed this as a narrative book. Flash Crash is an interesting book that talks about Nav Sarao, a day trader in London who was (sort of) scapegoatted for the 2010 "Flash Crash." If you like Michael Lewis type books (Spider Network, Black Edge, Billion Dollar Whale, Flash Boys), you'll probably love this if you haven't read it already. If not, it's probably a bit dull and esoteric despite the promises of "global manhunt" and "most mysterious market crash in history. OooooooooO." Computers and I enjoyed this as a narrative book. Flash Crash is an interesting book that talks about Nav Sarao, a day trader in London who was (sort of) scapegoatted for the 2010 "Flash Crash." If you like Michael Lewis type books (Spider Network, Black Edge, Billion Dollar Whale, Flash Boys), you'll probably love this if you haven't read it already. If not, it's probably a bit dull and esoteric despite the promises of "global manhunt" and "most mysterious market crash in history. OooooooooO." Computers and frontrunning, that's the mystery. I think it's a really difficult task to describe the Rube Goldberg on LSD makeup of the current global financial markets, and Liam does a good job fitting this story to a narritave. But I would be extremely wary at how simple he makes it sound. There are many, many, many (you get it) books written about concepts that Liam glosses over. International Tax Evasion, regulatory overlap, market structure, to name a few that I am briefly familiar with. Read it for fun, not for education.

  29. 5 out of 5

    Manish Gupta

    An absolutely riveting read about one of the most bizarre incidents in financial markets. The book provides insight into the incident and (supposedly) the person behind the incident. Regardless of the fact how the charges were laid out and the trial panned out, it is truly surreal if it actually took a solo trader working from a home grown setup in a suburb far away from the center of the action to bring the financial markets to a collapse. HFT firms with their algos and supposedly having unfair An absolutely riveting read about one of the most bizarre incidents in financial markets. The book provides insight into the incident and (supposedly) the person behind the incident. Regardless of the fact how the charges were laid out and the trial panned out, it is truly surreal if it actually took a solo trader working from a home grown setup in a suburb far away from the center of the action to bring the financial markets to a collapse. HFT firms with their algos and supposedly having unfair advantages with the exchanges through direct connections to their servers along with special order types coupled with the incompetent authorities who regulated them have long been suspected of rigging the markets against other participants. If all it took was one trader to fool these algos and make the financial markets a better place by subsequently revealing and helping to plug some of the loopholes, I would reckon that to be a fair outcome.

  30. 5 out of 5

    mohamed nouari

    I read and listened to Liam Vaughan’s account of Navinder Singh Sarao (Nav) journey from a trader to becoming a felon. Once on my Kindle the second time on Audible. It is a fascinating story with ominous overtones. It is well written and is well worth reading. Nav, whose parents are Sikh immigrants to Great Britain lived in Hounslow a working-class neighborhood located under the flight pattern or Heathrow airport. There he lived out his life in a second-floor bedroom in his parents’ house. He att I read and listened to Liam Vaughan’s account of Navinder Singh Sarao (Nav) journey from a trader to becoming a felon. Once on my Kindle the second time on Audible. It is a fascinating story with ominous overtones. It is well written and is well worth reading. Nav, whose parents are Sikh immigrants to Great Britain lived in Hounslow a working-class neighborhood located under the flight pattern or Heathrow airport. There he lived out his life in a second-floor bedroom in his parents’ house. He attended a local college and completed a bachelor‘s degree in computer science. He had been a gamer in his younger years and was an avid follower of the soccer leagues. After school, he applied and was hired, after proficiency testing, by IDT a company that taught candidates the principles of trading in the futures markets in exchange for a share of their profits and charges for desk rent and trade fees. Buy the ebook Flash Crash now: https://ebouks.com/product/flash-crash/

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