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Trading Firm Lost $10 Million a Minute

Discussion in 'Off Topic Threads' started by pyrdek, Aug 4, 2012.

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  1. pyrdek

    pyrdek Well-Known Member

    Jan 29, 1998
    NW PA
    Trading Firm Lost $10 Million a Minute Because of Computer Glitch

    From the Atlantic wire
    John Hudson Aug 2, 2012

    Did you catch the scary swings in the market yesterday? Turns out they were caused by a computer glitch that ended up costing a single trading firm $440 million. The Jersey City-based firm Knights Capital Group just owned up to the epic fail this morning and the firm's shares are down 60 percent on top of a 32 percent free fall on Wednesday. Dealbook's Nathaniel Popper has the details:

    The problem on Wednesday led the firm’s computers to rapidly buy and sell millions of shares in over a hundred stocks for about 45 minutes after the markets opened. Those trades pushed the value of many stocks up, and the company’s losses appear to have occured when it had to sell the over valued shares back into the market at a lower price.

    The company said the problems happened because of new trading software that had been installed. The event was the latest to draw attention to the potentially destabilizing affect of the computerized trading that has increasingly dominated the nation’s stock markets.

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