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	Forums ›› Main ›› Wall St. News ›› Knight Capital posts $389.9 million loss on trading glitch

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Random.Capital

Registered: Jan 2005
Posts: 3848

10-18-12 08:11 AM

Quote from DeeDeeTwo:

It completely blows my mind that limits were not set...Nor was there a KILL switch to just cancel ALL activity.

There were, and there was.

This wasn't a technology failure, it was a human failure.

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syswizard

Registered: Jun 2004
Posts: 3639

10-18-12 04:33 PM

Quote from Random.Capital:

There were, and there was.

This wasn't a technology failure, it was a human failure.

That's exactly right. Someone, likely an outsourced programmer, mistakenly or purposely installed the TEST version of the market making software. That version lacked the requisite checks and balances.

It remains to be seen whether the PRODUCTION version had the necessary circuit breakers to kill all open orders and to close all existing positions. Knight isn't saying....and likely we'll never know for sure.

I do know that one of the Knight executives responsible for this debacle is no longer with the firm. It has been said that at one tech conference he boasted about the money he "saved" from his outsourcing initiative.

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Satan's Helper

Registered: May 2012
Posts: 164

10-18-12 05:23 PM

Did anybody read the article?????

I may be the Devil's right hand man and would like to take credit for this loss..... But this error/glitch/bitch slap was due to the old software not being uninstalled properly and the new code was conflicting with the old software!

Just a FYI this seems to be the new excuses for trading losses.... It goes something like this: Hey Mr Chairman we just lost our shirts. What are we going tell our investors and shareholders? Just tell them it was a software glitch! We will get more money because someone will think we have the holy grail! Where else can you gamble with other peoples money and get paid no matter what the outcome is... Suckers!

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syswizard

Registered: Jun 2004
Posts: 3639

10-18-12 06:41 PM

Quote from Satan's Helper:

Did anybody read the article?????
I But this error/glitch/bitch slap was due to the old software not being uninstalled properly and the new code was conflicting with the old software!

It doesn't matter...that's what they SAID happened. That's not necessarily the truth.
Almost to-a-tee, any recent disaster related to outsourcing and software has been a huge cover-up.
Mariott Corp, BATS, Nasdaq FB, etc...there have been so many this year alone !
You'd have to beat the CEO of these corps to a pulp to get the story straight. Remember, outsourcing is corporate America's dirty little secret. They're not giving it up...easily.

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sle

Registered: Apr 2003
Posts: 1610

10-19-12 02:16 AM

Quote from syswizard:
outsourcing is corporate America's dirty little secret

You seem to be pretty bitter about outsourcing. Is there a reason for it?

Personally, my experience is that programmers in other countries are just as bad (or good, depending on your point of view) as their American counterparts. The ones with good education and good critical skills are good and fun to work with, the ones that suck are equally bad here and there.

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PocketChange

Registered: Jul 2008
Posts: 2037

10-19-12 04:34 AM

One issue is in JBO/self clearing type accounts there are no credit back stops.

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