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Wall Street’s Big Banks Are Waging a Technological Arms Race
71–80 of 98 posts
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#72> Bam. Bam. Bam. Dummy trade signals that were supposed to stay within the company’s electronic systems broke loose and slammed into computers at the New York Stock Exchange’s options markets. So many orders crashed through that by 8:44 a.m., safeguards within Goldman Sachs sprang into action, severing the connection between the company and the exchanges. Anyone whose built a trading system lives with this type of fe…
Yeah I really don't understand why Goldman should get a pass like this. They fucked up, they should lose money. Or better yet, errors like this should be reversed or safeguarded against better.
> I really don't understand why Goldman should get a pass like this.
They didn't. They cancelled a lot of the trades before they were hit and a whole bunch were filtered out at the exchange end because they were way off market. They lost $38mm from what wasn't caught by either.
In other words, they fucked up and lost money. And it's generally agreed that safeguards needed to be better. That was a big part of Mifid II.
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#73Earlier quoted context omitted.
Imagine coming back from lunch, you start to unwrap your sandwich at your desk. Then, your boss walks by and throws your sandwich across the room and explains while you were out your bug caused 440 million dollars of erroneous trades - and the company now no longer exists. https://dealbook.nytimes.com/2012/08/02/knight-capital-says-...
The fact that this is even a thing is the problem. Is this industry creating anything of actual value or is this just a giant MMORPG where the object is to grind long enough to get a house in the Hamptons?
Define value.
Should capital markets work? Should people be allowed to dynamically allocate capital to the most attractive companies?
The argument tends to be that making a decision about buying and selling in microseconds is not providing value, but generally everyone agrees that it should be possible at some level (by minute? by hour? by day?). There are a bunch of arguments here but broadly speaking I don't see how they change the underlying game. Make good decisions on where to allocate capital, make money as the market price caches up with your prediction.
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#74Earlier quoted context omitted.
Imagine coming back from lunch, you start to unwrap your sandwich at your desk. Then, your boss walks by and throws your sandwich across the room and explains while you were out your bug caused 440 million dollars of erroneous trades - and the company now no longer exists. https://dealbook.nytimes.com/2012/08/02/knight-capital-says-...
The way your comment is written, I thought someone literally had their sandwich angrily thrown across the room when Knight collapsed.
I was also under that impression until I came across your comment. I guess everyone got his lunch that day.
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#75How do I get a job in this field?
Step one: sell your soul
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#76> The cause? A coder had mistakenly programmed a router to send placeholder bids as live orders. If not for the good graces of the options exchanges, the bank would have lost $500 million, according to the U.S. Securities and Exchange Commission. Cancellations and price adjustments reduced that to $38 million It's interesting to read the full SEC report because it's a little more complicated than that: https://www.se…
That’s really a terrible place to put people in. From what this says, the SEC put part of the blame on the employees who lifted the circuit breakers without approval, and also state that employees didn’t know that they needed approval?
Before lifting the circuit breaker blocks, the control personnel did not obtain authorization from the responsible technology employees, as required under written firm policies.
The firm’s policies relating to the manual “lifting” of those circuit breakers were not disseminated...
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#77How do I get a job in this field?
Apply.
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#78Earlier quoted context omitted.
Sorry, but rules need to scale. What is acceptable for a small trader can not always be acceptable for a massive Corp.
Your statement is backwards though. The massive corp is being granted much more leeway for acceptable behavior than that of a small trader.
Not so much leeways as "huge company has a massive amount of context to use as evidence this was out of the ordinary".
A smaller trader has proportionally less history in the market to use as a evidence something is wrong and the rollback rules should apply.
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#79Earlier quoted context omitted.
Imagine coming back from lunch, you start to unwrap your sandwich at your desk. Then, your boss walks by and throws your sandwich across the room and explains while you were out your bug caused 440 million dollars of erroneous trades - and the company now no longer exists. https://dealbook.nytimes.com/2012/08/02/knight-capital-says-...
> your bug Knight had a terrible software delivery process and a lot of deadline-oriented pressure on techies.
It's not nice to see a company get wrecked but sounds like they were asking for it
Re: Wall Street’s Big Banks Are Waging a Technological Arms Race
#80Earlier quoted context omitted.
Imagine coming back from lunch, you start to unwrap your sandwich at your desk. Then, your boss walks by and throws your sandwich across the room and explains while you were out your bug caused 440 million dollars of erroneous trades - and the company now no longer exists. https://dealbook.nytimes.com/2012/08/02/knight-capital-says-...
The fact that this is even a thing is the problem. Is this industry creating anything of actual value or is this just a giant MMORPG where the object is to grind long enough to get a house in the Hamptons?
Yes. HFT in particular creates liquidity for other trades in the market.