4 ms·
Damn that's huge. You'd assume that the software checks the dollar amount and asks for a confirmation, or better yet permission from a higher up, if it exceeds
by Cyph0n 11y ago
Damn that's huge. You'd assume that the software checks the dollar amount and asks for a confirmation, or better yet permission from a higher up, if it exceeds some value.
- joering2 11y agoit does ask for confirmation. As OP wrote - it was an error, NOT a mistake.
- Cyph0n 11y agoI don't see what you're getting at. The trader switched price with quantity - it was a human mistake. If the software had brought up a warning with something like "you are selling each share for less than 610000 +- 10000, please confirm", this could have been avoided.
- randyrand 11y agoWhat a silly semantic argument to make. It was an error and a mistake. In fact, error is a synonym for mistake: https://www.google.com/search?q=mistake&oq=mistake&aqs=chrome..69i57j69i60l2&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=mistake&oq=mistake&aqs=chrom...
- madeofpalk 11y agoHe actually said both :) But I don't understand the difference in this situation.
- Houshalter 11y agoThe problem with confirmation is it trains the human to always press "yes". You need a system that only activates if something really unusual or wrong.
- gertef 11y agounusual, like paying 1 billion times over recent prices?
- nxzero 11y agoA billion times over market price, funny; who in their right mind would even pay 20x over market price in any meaningful amount without requiring some sort of control?
- salgernon 11y agoSee also rm -rf
- Houshalter 11y agoYes of course. I'm just saying that usually these systems are badly designed, and recognizing errors correctly is a surprisingly hard problem. In the medical world, many people have been killed by mistakes in prescriptions, despite everything going through computers and multiple humans checking it. The problem was that the machines were too sensitive to mistakes and trained the humans to ignore warnings. They also didn't distinguish mild warnings from extreme warnings. E.g. a prescription being 2x larger than recommended, or 100x larger than recommended, which are very different situations. A well designed interface might have different shades of red for different levels of severity. To give an indication if something is really wrong.
- speeder 11y agoMy mother use computers all day, and also hates them and think they are illogical. In a way she is correct, I saw her many times freaking out at a dialog box and calling me to "fix it", and it was just some absolutely useless "warning", but I also saw her many times clicking "ok" on a important message without reading and then wondering why things broke.
- enraged_camel 11y agoSo instead of a yes/no confirmation, you force the user to explicitly type what they are doing, i.e. "Sell 610,000 shares of stock X for 1 yen each." This is similar to how Github forces you to type the name of a repository when you try to delete it. You can also configure a threshold such that the "hardcore" prompt kicks in only if the system detects that the user is trying to do something unusual, i.e. sell a stock for much cheaper than it is.
- funtober 11y agoThese sorts of mistakes happened when I was trading options more than a decade ago. In most transactions, such a confirmation would have cost money on every transaction since speed matters. Back in the old days, I feel the broker would have gone to the market makers, said there was an error, and gotten out of the trade.
- enraged_camel 11y ago>>In most transactions, such a confirmation would have cost money on every transaction since speed matters. Which is why I said you would enable it based on a threshold and/or only on unusual threads. These systems are capable of extremely complex decision-making at very high frequency. Surely something like "sell 610,000 shares for 1 yen" would have stood out as strange.
- achr2 11y agoThough I wish Github didn't do that for forks that are less than a few minutes old or have no commits...
- StavrosK 11y agoI like what mycelium does. You type the amount, and there's a button that will change state on every press, and cycles though "generous", "normal", "economical" and "stingy" or something like that. That way, a user doesn't have to know what value to use. You can also set this once in settings and never see it again, except as a report.
- jameshart 11y agoThe transaction value is the same either way - 610,000 Yen.
- Matthias247 11y agoBut it should be able to check the current share value and then display a warning that this would be massive loss.
- pbhjpbhj 11y agoIt's more nuanced than that though isn't it - you can sell shares at a loss to push the market so you can buy and profit off the rebound (ie go short)? Kinda like losing your queen in chess in order to check-mate your opponent.
- Rexxar 11y agoThis is market manipulation and it's illegal nearly everywhere.
- patio11 11y agoIt got flagged multiple times and, each time, someone at the Tokyo Stock Exchange came to the conclusion that they didn't have the authority to countermand the order. The regulator was livid about this in the report.
- KMag 11y ago2005 was ages ago in terms of financial markets. It was before the housing crash and other financial crises (notably in Greece). It was before the flash crash and other notable electronic trading incidents. Many world equity markets now have daily up/daily down limits a certain percentage above and below the previous day's closing price. Others will pause trading for a short period of time if short-term price moves are abnormally large. Many equities markets only allow direct connections to the market from brokerages licensed by the country's financial regulators. These days, brokerages often implement their own sanity checks on many order flows. Joe's Live Bait and Stock Trading generally isn't connecting directly to any equity trading venue. I'm curious what the effect would be of a market switching to second-price blind auctions every 5 minutes if a stock moves up or down 5% on the day. There are academic papers showing theoretical stability advantages of second-price auctions. Trading at the second-highest bid when the market is down more than 5% and at the second-lowest ask when the market is up should help to attract one-sided liquidity in the direction of market stability.