Different situations so I doubt it has anything to do with GS nepotism. Knight couldn’t cancel their bad trades because most weren’t clearly erroneous, based o

Different situations so I doubt it has anything to do with GS nepotism. Knight couldn’t cancel their bad trades because most weren’t clearly erroneous, based on exchange rules. If the market was bid 20.01 offered at 20.02, Knight’s test program was buying 20.02 and selling 20.01 over and over. Those prices weren’t far from the prevailing market, they just executed stupidly and very quickly. Goldman was selling $10 options for $0.01, so they met the exchange rules for breaking erroneous trades since they were so far from fair value. If I were an evil Machiavellian exchange, I’d much rather stick Goldman with a nasty error than Knight. At the end of the day, exchanges need transaction volume to make a profit. Goldman is an 800lb Gorilla with huge capital reserves and diverse business lines, so they’d still come back to trade after licking their wounds. Knight almost went bankrupt.