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Yes, and that's a good scaling rule. the person with $50 dollars is likely clueless and stumbling around trying to figure out what the rules are. The person wit
by jfoutz 9y ago
Yes, and that's a good scaling rule. the person with $50 dollars is likely clueless and stumbling around trying to figure out what the rules are. The person with $50 billion can do serious damage when they screw up.
The rules in place are exactly backwards. the $50 dollar team is held to a high standard, with no affordances. the $50 billion dollar team is part of the club, so enforcers look the other way when they screw up.
- enervate 9y agobut a $50 trade has a much smaller effect on everyone than a $50 billion trade
- TheAlchemist 9y agoFor instance, the effect was that Goldman lost money, while some other guys made money - what's the harm here ? Moreover, the trade being busted, the guy that initially made the money, probably found himself in a very uncomfortable position, since chances are he already covered his risk and hedged the lucky trades. So overall, he lost money just because Goldman was able to force the rules in their favor. Unfortunately, markets are rigged, just as most things -> the bigger you are, the more influence on the rules and how they are applied you have.
- maxxxxx 9y agoIf the little guy makes a mistake Goldman will happily take the money. If they make a mistake the rules need to be changed. This simply is not right.
- matte_black 9y agoIt is not backwards at all. Corporations are made up of a ton of people, there's no one person you can lay blame on. Some guy fucks up and costs a firm half a bil with a computer error, that's not something you want to just allow to happen. A dude losing $50? Give me a break, his risk is his own. Consider his $50 a small price to pay for learning how things work. And let me remind you, it is a very small price.
- kmonsen 9y agoThen they should not let that person do live trades.
- matte_black 9y agoHe wasn’t live trading, he was a programmer, like any other dude here in HN, and he wrote something incorrectly. A bad trade went through. Is he to blame? Who knows, no one else caught his mistake and maybe he actually coded what he thought was asked for, or someone told him something wrong.
- jfoutz 9y agoI love this. This is the ultimate wisdom of crowds hack. Have a thousand people throw in a thousand bucks, each one selects an option play to purchase. Randomly select the purchase. If the play is profitable, keep the money. if it's a loss get the trade reverted because 'a lot of people were involved in the process.' I can make the process as convoluted an necessary to meet your 'no one person you can lay blame on' rule. I think that's a stupid rule, because it's so easy to hack. The more money staked on a trade, the higher the threshold should be to roll it back. More people mean more chances to catch the error, not the other way around. edit also, the corporation itself is the person that takes the blame. if it can't manage itself, it shouldn't manage your money.
- aje403 9y ago....what? Your logic is truly frightening. Are you saying this is a regularly occurring event and that they deliberately did this? Do you have any idea of the scale and complexity and risk of the code they have deployed? This shit understandably happens. There is no "more people means mistakes don't happen" in any organization on the planet. There is no "whether or not who should morally be able to roll back a trade". There is a "hey, we are a customer of your business, we do a lot of business together and I make you a lot of money. We had a once in a blue moon mistake in our billions of lines of code, can you help us out. Other banks are watching and there are plenty of other exchanges to do business with"