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"Trading Glitch" = a very good excuse for very bad trades. I'm not implying this happened, but if I was an analyst at Knight Capital and we just lost $440 mill
by rcavezza 14y ago
"Trading Glitch" = a very good excuse for very bad trades. I'm not implying this happened, but if I was an analyst at Knight Capital and we just lost $440 million, I'd blame it on a "trading glitch".
- eli 14y agoWhy is admitting you have buggy trading software better than admitting you have traders who made bad trades?
- fr0sty 14y agoGiven that there was suspicious activity in ~150 names of ~45 minutes "trading glitch" is much more plausible than "bad analysis".
- incision 14y agoYep. They're calling it a "glitch" to suggest something unavoidable, a problem that could have happened to anyone. It's same vein of bullshit we heard in 2008 "We couldn't possibly have known!" and more recently with the string of "rogue traders". In every case, its just a bunch of folks who don't want to take responsibility for their gambles when they lose.
- jwoah12 14y agoYou are completely wrong. Try looking into the circumstances before you make some unfounded accusation about what caused this. Comparing a 45 minute isolated incident at a firm with an otherwise-excellent reputation to the housing crisis or rogue traders is moronic.
- incision 14y agoYou're missing the point entirely. They gambled on an algorithm and everything related to engineering and operating it. On some level or another they failed spectacularly and they're calling it a "glitch" - a minor malfunction, a transient error, a spurious little blip. Say what? $440 million dollars pissed away over the course of 45 minutes is not a glitch by any stretch of the imagination. It's a failure of epic proportions at multiple levels. Failure to test, to review, to react and finally failure to own up.
- sseveran 14y agoThey did not gamble. Market making doesn't involve gambling. Someone checked in an egregious error that testing failed to find. The fact that it is in a trading system makes the cost of the bug easy to measure.
- incision 14y agoWhat on earth are you talking about? Market makers gamble on their ability to set spreads that will produce a profit. They're using code to generate spreads, execute head fakes and stuff quotes to their advantage. They're "players" as much as anyone.
- vtry 14y agoBingo, and this is the main reason for the downfall of our world.
- harryh 14y agoHow are they not taking responsibility? They lost the money. They aren't getting it back. What more responsibility could they take?
- kevinpet 14y agoThere's no analyst involved in these trades. Knight is operating as a dealer providing liquidity. They provided a bit more liquidity than they intended today.
- sp332 14y agoBuying high and selling low, several times per second for hours, seems like a glitch. That's not a "bad call" or even an insane call, that's a systematic, continuous destruction of value.