Not long after lunchtime one day on the New York Stock Exchange three years ago, unusual things started to happen. Hundreds of thousands of âbuyâ and âsellâ messages began flooding in, signalling for orders to be made and simultaneously cancelled. The volume of messages sent in was so large that the traffic coming into the NYSE from thousands of other trading firms slowed, acting as a drag on the trading of 975 shares on the board. The case was made public only last month when the disciplinary board of the NYSE fined Credit Suisse for failing adequately to supervise an âalgorithmâ developed and run by its proprietary trading arm â the desk that trades using the bankâs own money rather than clientsâ funds. more... http://www.ft.com/cms/s/0/c4baf670-1bfe-11df-a5e1-00144feab49a.html?ftcamp=rss
Why all the "quotation" marks? Are they not really algorithms, buy orders, throttling systems...? My favorite paragraph: It was a close call for the NYSE. Asked if the exchange could have been shut down as it was bombarded with false trades, an exchange official says: âIf you had multiplied this many times youâd have had a problem on your hands.â We were only many times the number of orders away? That does sound like a close call.
If you're familiar with this: http://en.wikipedia.org/wiki/Denial-of-service_attack Then the concept we are discussing should not surprise you.
thats a point. im sure the credit suisse servers that generated the orders are nowhere near the capacity (by 'many times') of the mainframes on the exchange matching engine.
do you think exchange companies (and their advisers) would set up a main frame without evaluating a DoS attack?