4 ms·
But also for 99% of companies, running the wrong version for an hour won't bankrupt the company and all of its investors.
by badfrog 8y ago
But also for 99% of companies, running the wrong version for an hour won't bankrupt the company and all of its investors.
- Causality1 8y agoYou live by the AI stock trader, you die by the AI stock trader.
- Bartweiss 8y agoI've seen a lot of companies and teams with hair-raising practices, but most of them still manage some basic business-logic safeguards like "don't buy for more than $X" or "if we don't sell anything for 10 minutes, shut it all down and sound the alarms". Generally they can't do worse than "making no money" or maybe "paying full expenses without making any profits". The link here excerpts the full filing, but the real meat wasn't included: > 16... Because the cumulative quantity function had been moved, this server continuously sent child orders, in rapid sequence, for each incoming parent order without regard to the number of share executions Knight had already received from trading centers... 17. The consequences of the failures were substantial. For the 212 incoming parent orders that were processed by the defective Power Peg code, SMARS sent millions of child orders, resulting in 4 million executions in 154 stocks for more than 397 million shares in approximately 45 minutes. Knight inadvertently assumed an approximately $3.5 billion net long position in 80 stocks and an approximately $3.15 billion net short position in 74 stocks. Ultimately, Knight realized a $460 million loss on these positions. Knight did $1.4 billion in revenue per year, but there was no safeguard against adopting $7 billion worth of positions in 45 minutes. The end result was that they lost 4 years of profits in under an hour. That's crazy, and not at all standard.