Feeds

Software bug flattens NYSE trader

Plunged into $US440 MILLION loss

Intelligent flash storage arrays

An algorithmic trading software bug is being blamed for a day of wild swings at the New York Stock Exchange – and has resulted in the trader placing the dodgy orders reporting a $US440 million pre-tax loss.

What’s been called a “mini flash crash” by Forbes saw 150 NYSE-traded stocks, from General Electric down to minnows, subject to wild swings before things were brought under control. Knight Capital, the firm fingered for the glitch, responded by telling its customers to use other traders – and has since reported the loss as a result of the Wednesday, August 1 software problem.

With a huge chunk of its value wiped out by the glitch, Forbes now says the cost of the bug is roughly equivalent to Knight Capital’s entire market capitalization.

Reuters states that the only comment to come from the company is a terse statement that “a technology issue occurred in Knight's market-making unit related to the routing of shares of approximately 150 stocks to the NYSE”.

The Reuters report suggests that timing may have been the problem: the orders may have been intended to be filled during the trading day, but instead were filed in the opening minutes of trading.

The latest trading disaster follows the 2010 "Flash Crash", in which a single bad order triggered a thankfully-temporary trillion-dollar market crash; and the embarrassing crashes that plagued the Facebook IPO, preventing the stock from plunging anywhere as quickly as it probably should have on listing. ®

Top 5 reasons to deploy VMware with Tegile

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Reducing the cost and complexity of web vulnerability management
How using vulnerability assessments to identify exploitable weaknesses and take corrective action can reduce the risk of hackers finding your site and attacking it.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.