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| ===HFT problems, discovery and response=== | ===HFT problems, discovery and response=== | ||
| While at RBC, he noticed that placing a single large ] that can be fulfilled only through many different ] was being taken advantage of by |
While at RBC, he noticed that placing a single large ] that can be fulfilled only through many different ] was being taken advantage of by predatory ]. Scalpers, noticing the order would not be able to be fulfilled by one single exchange, would instead buy the securities on the other exchanges, so that by the time the rest of the large order arrived to those exchanges the scalpers could sell the securities at a higher price. All these events would happen in milliseconds not perceivable to humans but perceivable to computers. He instead led a team that implemented ], a securities' order-management system where large orders are split into many different sub-orders with each sub-order arriving at the same time to all the exchanges through the use of intentional delays.<ref>{{cite web|url=http://www.efinancialnews.com/story/2012-09-19/trading-chief-exits-rbc?ea9c8a2de0ee111045601ab04d673622 |title=Trading chief exits RBC - Financial News |publisher=Efinancialnews.com |date=2012-09-19 |accessdate=2014-04-03}}</ref> | ||
| ===Post-RBC and IEX founding=== | ===Post-RBC and IEX founding=== | ||
Revision as of 00:09, 23 February 2015
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Bradley 'Brad' Katsuyama is a financial services executive, working as the president, CEO and co-founder of the IEX, the Investors Exchange. Katsuyama is also the focus of Flash Boys, a non-fiction book by Michael Lewis about high-frequency trading (HFT) in the financial markets.
Personal life
Born in 1979, Katsuyama is a native of Markham, Ontario, Canada and is a graduate of Wilfrid Laurier University in Waterloo, Ontario. He is married with two children. Katsuyama lives in New York with his wife Ashley and his two sons, Brandon and Rylan.
Career
RBC and pre-IEX career
Before founding IEX, Katsuyama worked for many years at the Royal Bank of Canada (RBC), where he was formerly the Global Head of Electronic Sales and Trading. In this role, he was responsible for multiple global teams including: electronic sales, electronic trading, algorithmic trading, market structure strategy, client implementation and product management. His prior management roles at RBC were Head of US Cash Equity Trading, Head of US Hedge Fund Coverage, and Head of US Technology Trading.
HFT problems, discovery and response
While at RBC, he noticed that placing a single large order that can be fulfilled only through many different stock exchanges was being taken advantage of by predatory stock scalpers. Scalpers, noticing the order would not be able to be fulfilled by one single exchange, would instead buy the securities on the other exchanges, so that by the time the rest of the large order arrived to those exchanges the scalpers could sell the securities at a higher price. All these events would happen in milliseconds not perceivable to humans but perceivable to computers. He instead led a team that implemented THOR, a securities' order-management system where large orders are split into many different sub-orders with each sub-order arriving at the same time to all the exchanges through the use of intentional delays.
Post-RBC and IEX founding
Following Katsuyama's discovery of certain unfair high-frequency trading practices, he decided to improve the business of the stock market, leaving RBC in 2012 to start-up a fairer stock trading venue. The Investors Exchange, IEX was born from his RBC departure. IEX is an emerging stock exchange, organized as an alternative trading system, also known as a dark pool. Company representatives have stated their intention to convert to a public exchange upon reaching sufficient trading volume. It opened for its first day of trading on October 25, 2013. William O'Brien, at the time president of competing business BATS Global Markets, asserted in April 2014 the IEX was trying to build its business by generating 'fear', 'mistrust' and 'accusations'. O'Brien stepped down from his position three months later. Financial writer Michael Lewis praised IEX as an appropriate and beneficial response to HFT abuses. Since the publishing of Flash Boys and the opening of IEX, several U.S. authorities have confirmed they are looking into certain practices used by high-frequency traders. The FBI, the U.S. Securities and Exchange Commission, the U.S. Justice Department and the Attorney General of New York State all have investigations underway.
Scalping done on large orders by high-frequency trading systems.
Intentional delays implemented by Katsuyama and his team to ensure simultaneous order arrival.
References
- "IEX Group - About Us | A Market That Works For Investors". Iextrading.com. Retrieved 2014-04-03.
- Lewis, Michael (2014). Flash Boys: Cracking the Money Code. London, UK: Allen Lane. ISBN 9780241003633.
- ^ "The New York Times". nytimes.com. Retrieved 2014-04-11.
- "Canadian says 'moral compass' led him to solve unfair gaming of stock markets by high-frequency traders". business.financialpost.com/. 2014-03-31. Retrieved 2014-05-08.
- ^ "Canadian Brad Katsuyama's 'overwhelming' life as hero of Michael Lewis's Flash Boys". theglobeandmail.com. 2014-04-04. Retrieved 2014-05-08.
- "IEX Trading Executive Team". iextrading.com. Retrieved 2014-05-08.
- "Trading chief exits RBC - Financial News". Efinancialnews.com. 2012-09-19. Retrieved 2014-04-03.
- "How IEX is Combating Predatory Types of High Frequency Traders". Forbes.com. 2014-04-23. Retrieved 2014-05-08.
- "Dow Jones & Co. MarketWatch - 'Epic' debate on high-frequency trading between Michael Lewis, Brad Katsuyama and William O'Brien". marketwatch.com. Retrieved 2014-05-11.
- Ember, Sydney (July 22, 2014). "BATS President William O'Brien Departs". DealBook, published by The New York Times. Retrieved February 21, 2015.