#20: Flash Boys’ IEX Exchange with Ronan Ryan – Story of Software Podcast

Padraig Coffey, CEO at Zartis, is joined by Ronan Ryan, Co-Founder & President of IEX Exchange, as they discuss the ins and outs of modern stock trading.

In this episode, Padraig Coffey, CEO at Zartis, is joined by Ronan Ryan, Co-Founder & President of  IEX Exchange and co-host of the Boxes & Lines podcast.



The short history of the exchange made famous for the Michael Lewis book ‘Flash Boys’

There is little doubt you have a good story on your hands when Michael Lewis has written about it. His book Flash Boys explores the world of electronic and high frequency trading. It also introduces IEX and its founding members, including Ronan Ryan and Brad Katsuyama, as they embark on a journey to build a new kind of exchange, one that works the same for all investors.  

Book by Michael Lewis called Flash Boys on the topic of the US Stock Exchange market

Image source.


“You make your own luck, but you need to be damn lucky as well” – Ronan Ryan


Today, IEX Exchange is the eighth largest stock exchange operator globally in terms of the value of shares traded every day. To put this in context, on a daily basis, IEX Exchange processes more trades  than the London stock exchange. 


Ronan Ryan walks us through the ins and outs of modern stock trading, high frequency trading, and the early days and evolution of IEX. He shares what it’s like to build an exchange from scratch – from a mindset, technical and business perspective.


What is unique about IEX Exchange in comparison to others? The short answer is what is often referred to as the ‘speed bump.’ Ronan explains: 


Where every other exchange globally is trying to go faster and faster and faster and faster – and we are very very fast – we’re matching trades in millionths of a second – but we’re slowing it down by 350 microseconds and that’s the key part to what we’re doing that’s very very different. {…}

We wanted to build an exchange that provided a level playing field for the investor. And how we did that was  – we slowed down trading on IEX. {…}

It’s become known as the ‘ speed bump’ – we slow down all trades entering our market by 350 microseconds. And just to give you an idea – a microsecond is 1 millionth of a second. 350 is 1/1000 the blink of an eye. […] It’s a tiny period of time. However, where trading has gone and electronification of trading and how fast it’s gotten – 350 microseconds as a sum is a very very long time. But the reason why we did it is that – as an exchange, our job, as we feel, is to play referee – there’s a blue team, there’s a red team. I’ll be honest, it’s not our  job to make sure someone wins, our job is to provide a level playing field while you’re trading.”



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