New York, NY, April 03, 2014 — A recent ’60 Minutes’ report claimed the U.S. financial markets are “rigged”. In what amounted to an infomercial for an upcoming publication, the report went on to suggest markets are hurting the average investor and benefitting high frequency traders, stock exchanges and large Wall Street banks.
Rising above the sea of misinformation about modern-day investing and trading exposed in the last few days is Edgar Perez, author of Knightmare on Wall Street, The Rise and Fall of Knight Capital and the Biggest Risk for Financial Markets, who sustains that stock markets are not any more ‘rigged’ than at the beginning of financial trading. “At any given time, market participants are leveraging available technology and for the most part abiding by existing laws and regulations.”
Michael Lewis’ fascinating book reads: “Broadly speaking, it appeared as if there were three activities that led to a vast amount of grotesquely unfair trading. The first they called electronic front-running — seeing an investor trying to do something in one place and racing ahead of him to the next (what had happened to Katsuyama when he traded at RBC). The second they called rebate arbitrage — using the new complexity to game the seizing of whatever legal kickbacks, called rebates within the industry, the exchange offered without actually providing the liquidity that the rebate was presumably meant to entice. The third, and probably by far the most widespread, they called slow-market arbitrage. This occurred when a high-frequency trader was able to see the price of a stock change on one exchange and pick off orders sitting on other exchanges before those exchanges were able to react. This happened all day, every day, and very likely generated more billions of dollars a year than the other strategies combined.”
Mr. Perez claims that each of these three strategies would fail to carry the “unfair trading” label. “Every manager would be in heaven if he or she could front-run orders; most high-frequency traders work with their own capital, so there would be no way to front-run clients, because they have no clients. Rebate arbitrage is a legitimate (and legal) practice as exchanges live and die in search of trading volume. Finally, if market arbitrage, capturing a trading advantage thanks to low latency, is unfair, we should ban all express roads out of the 4 million-miles network in the U.S., as they provide unfair advantages in detriment of little guys like you and me.”
Knightmare on Wall Street (http://knightmareonwallstreet.com), the fascinating story of Knight Capital, was the most favorably reviewed Kindle edition book on Amazon in 2013, with an average rating of 5 out of five stars. Knight Capital, founded by Kenneth Pasternak and Walter Raquet in 1995, had seen its fortunes change as U.S. regulators made a series of changes in the structure of financial markets and computers were progressively expanding their share of trading. The Flash Crash, the infamous 1,000 point drop of the DJIA on May 6, 2010 (the largest one-day point decline in history), illustrated how market structure problems could almost instantaneously cascade from one market participant to the rest.
Mr. Perez (http://www.facebook.com/AmericasUltimateNetworker) has been interviewed on CNBC, FOX BUSINESS, Bloomberg TV, CNN en Español, Sina Finance, BNN’s Business Day, CCTV China, Bankier.pl, TheStreet.com, Leaderonomics, GPW Media, Channel NewsAsia’s Business Tonight and Cents & Sensibilities. In addition, Mr. Perez has been globally featured on FXFactor, Columbia Business, OpenMarkets, Sohu, News.Sina.com, Yicai, eastmoney, Caijing, ETF88.com, 360doc, AH Radio, CNFOL.com, CITICS Futures, Tongxin Securities, ZhiCheng.com, CBNweek.com, Caixin, Futures Daily, Xinhua, CBN Newswire, Chinese Financial News, ifeng.com, International Finance News, hexun.com, Finance.QQ.com, Finance.Sina.com, The Korea Times, The Korea Herald, The Star, The Malaysian Insider, BMF 89.9, iMoney Hong Kong, CNBC, Bloomberg Hedge Fund Brief, The Wall Street Journal, The New York Times, Dallas Morning News, Valor Econômico, FIXGlobal Trading, TODAY Online, Oriental Daily News and Business Times.
Mr. Perez (http://www.weibo.com/edgarperez) was a vice president at Citigroup, a senior consultant at IBM, and a strategy consultant at McKinsey & Co., the American global management consulting firm that focuses on solving issues of concern to senior management; the firm serves as an adviser to businesses, governments, and institutions around the world. McKinsey is widely considered to be the most prestigious management consulting firm in the world, with over 100 offices in 60 countries.
Mr. Perez (http://en.wikipedia.org/wiki/Edgar_Perez) has an undergraduate degree from Universidad Nacional de Ingeniería, Lima, Peru (1994), a Master of Administration from Universidad ESAN, Lima, Peru (1997) and a Master of Business Administration from Columbia Business School, New York, with a dual major in Finance and Management (2002). He belongs to the Beta Gamma Sigma honor society. Mr. Perez resides in the New York City metro area and is an accomplished salsa and hustle dancer.
Contact:
Julia Petrova
Edgar Perez, Inc.
New York, NY
414-367-8670
jpetrova@thespeedtradersworkshop.com
http://www.mredgarperez.com/
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