Algo Mis-Trades 700 million USD.RUB

Discussion in 'Wall St. News' started by Options12, Aug 3, 2012.

  1. Options12

    Options12 Guest

    Also, in Russia a hedge fund trading USD/RUB futures on the RTS exchange suffered at least $2 million loses (or as much as $4.3 million according to some sources) in just 2 minutes as its robot suddenly started buying at 33.90 and selling at 32.75. Within minutes the out of control robot generated $700 million worth of volume until it halted trading on its own or was stopped by its operators. RTS said that since this is not a failure of the exchange’s technology it doesn’t intend to annul the trades and refund the losses to the unlucky robot’s owner.
  2. Automated trading at its finest. I have been watching the USD/RUB on and off for about 4 years. It is one of the better currency pairs for interest rate PIP riding. When it hit over 32/1 it was an auto target for the down side. When the machines algo runs amok human traders can capitalize on it. The non refunding of capital only means they was were not in tight with the brokerage house. If it would have been a very large bank all would have been forgiven. It is just the way it is.
    The mantra of aut mated trading and HFT way of things means that a market watcher could profit well after a catastrophic economic event. I am still watching the USD/RUB trade and know that post election it will rip.