3 ms·
You must have missed the part where the NASDAQ bug caused about $60MM in losses whereas the subsequent price decline has destroyed $40B in market capitalization
by minimax 13y ago
You must have missed the part where the NASDAQ bug caused about $60MM in losses whereas the subsequent price decline has destroyed $40B in market capitalization. You can lose your shirt in the stock market, but that's been true since long before we started using computers to trade equities.
- joezydeco 13y agoNo, I fully caught that part. I also understood why the NASDAQ computers couldn't finish the cross: because HFT computers were hammering the NASDAQ with cancel orders. You don't DDOS a server and say "oh, the server has a bug." And, to be perfectly honest, I have no sympathy for anyone that lost money on the FB IPO. For once a company executed an IPO and got every cent on the table. And I know that just infuriates every suit on Wall Street to no end, which couldn't make me any happier.
- mooktrader 13y agoAlthough HFT and other algorithmic traders are certainly prevalent in the markets and probably in this IPO, I think this flaw was elicited because of the unprecedented and overwhelming amount of non-professional human order flow. There was a ton of buzz and participation in this IPO. The uncertainty around the opening process compounded the problem.
- Dylan16807 13y agoThere was a bug. A bug serious enough that you could trigger it with low frequency trades. Every time the cross algorithm restarted it did so using data that was 99% stale. This meant it didn't just need to find a few milliseconds of stability, it had to wait until the average order rate went low enough and stayed there for minutes. A relative handful of people changing their orders a few times a minute would be enough to keep such an O(n^2) algorithm occupied.