Anyone who runs an automated system without the ability to shut it down quickly is extremely irresponsible. S*** happens basically. These guys weren't over leveraged: https://www.bloomberg.com/news/arti...t-shows-how-to-lose-440-million-in-30-minutes GAT
What allows you to trade the next day is to have it open at 90 and go to 88 and 85 and no stop fill and your toes are still tapping.
Aside: are we really having an argument in this thread against a fail safe strategy? That's kind of hilarious to me haha.
Correct. That is why a move of 15 percent in an instrument should not equate to 15% of Total LIquid Net Worth. Anyone trading and having to worry about getting out of all positions at once is wildly overextended.
Certainly you would need one if Prudent Risk Management has not been employed. However, a person should never get themselves into a position where one would be needed.
I worked at a successful hedge fund and they literally had a stop all trading button. So... I disagree.
I see it was 296 million. Thus, they placed more than their entire market cap up for grabs in a situation where their technology was not up to snuff. Very careless and qualifies as being wildly overextended in the arena of market making. This was totally their fault and they were destined to fail at some point.
@globalarbtrader you worked in the industry right? Did your employers employ any fail safe strategies?