The $440M software error at Knight Capital (2019) • Hacker News Board

Re: The $440M software error at Knight Capital (2019)

#171

Post by 22SAS » Tue, May 03, 2022, 6:21 PM UTC

caffeine wrote: post #170

22SAS wrote: post #167

Earlier quoted context omitted.

Yep. At the end it is market making, in markets where speed is of the essence to be competitive. Funny thing is, now firms in the industry want to be termed as Market Makers rather than HFT since the media has turned HFT into a very negative term.

Back when Flash Boys came out, we all started calling each other Flash Boys. There was then a serious proposal to rename one of the strategies (the hedger, for added irony) Grandma Annihilator 3000. When the KCG thing came out, one of the new grads was renamed “Power Peg” for a few weeks. I miss the 2010s. It was a lot more fun when people leaned into stuff instead of being scared all the time.

Hahaha, that is pretty cool. I don't think we'd do something like that, especially the "Power Peg" one, at my firm. Although, it'd be fun.

> I miss the 2010s

Ah, so true. I was in college and grad school during that period, would have been more fun to work in the industry back then.

Re: The $440M software error at Knight Capital (2019)

#172

Post by kevstev » Tue, May 03, 2022, 8:50 PM UTC

smcl wrote: post #154

kevstev wrote: post #45

Earlier quoted context omitted.

Yeah, pay at the big banks is shit really, especially when you consider the utter lack of work/life balance. I left in 2013 making 150k, which was supposed to be supplemented by a ~40% bonus for the level I was at, but each year was "well its been a tough year..." and after getting a token amount one year, and then zeroes the next 2, after working 50-60 hour weeks, I was like I am not only done with this place, but t…

>> Then when we get to talking numbers they're like "300k a year". > Yeah, pay at the big banks is shit really I would say that a $300,000/year salary is really quite far from "shit". Many jobs are stressful, demanding or unrewarding but rarely do they provide such a salary, and quite often they offer hourly wages hovering around minimum wage with poor benefits. It's worth taking a step back once in a while to think…

I would agree, but I really don't think many people are making that kind of money at IBs. Things may have changed, but as I mentioned, a neighbor who is pretty much in my seat- well technically one level up as a director (though title inflation has just made pretty much all titles below MD worthless), and was not pulling 300k. The new guys on the desk were not clearing 100k, and even "senior" guys like me were making a wage that just barely put us in the ownership class, and we were sacrificing a good chunk of our lives for it.

And again- these are the cream of the crop, this is the team most people wanted to work. I was one of the first to leave, but all those guys are now making multiples elsewhere that I am aware of. The point is that there are just better opportunities out there where you get to actually enjoy your life. I hear you on other jobs being stressful and demanding, but I have not really worked at a job where I was wearing that stress 24/7- well typically nothing traded on Saturday night, so nothing would ruin that, but outside of that, I could expect a call at literally any time of day- the markets were trading 23x6.

Re: The $440M software error at Knight Capital (2019)

#173

Post by skippyboxedhero » Tue, May 03, 2022, 8:55 PM UTC

22SAS wrote: post #169

skippyboxedhero wrote: post #110

Earlier quoted context omitted.

It depends what the strategy is. Frankly, a lot of what people refer to as "prop trading firms" and "quant hedge funds" on here are just market-makers...they are taking very little to no risk, a lot are just riding the wave of ETF growth. Even the ones that are running alpha, I have heard of a few strategies, and they are largely what you would expect: low-edge, crowded trades (frankly, a lot of it is LTCM-style stuf…

Interesting, would you add RenTech and TGS into the "traditional hedge funds that incorporated quant methods into a fundamental process" bucket?

No. Because that isn't what they do (I am talking about fundamental investors: Marshall Wace, Point72, etc.). I have no real idea what they do or do not do but they trade over shorter time frames where there is no change in fundamental information (i.e. they are trading based on liquidity signals which is, essentially, what market-making is now).

Re: The $440M software error at Knight Capital (2019)

#174

Post by p90puma » Tue, May 03, 2022, 10:54 PM UTC

grouseway wrote: post #127

zeven7 wrote: post #119

Earlier quoted context omitted.

Chiming in as someone who has lived decades in both South East US and North East US. I've also never heard () called "brackets" only "parentheses". This includes in and out of programming circles. I assumed the comment saying "parens: ()" was talking about US, but the replies seem to be interpreting the opposite.

Never? You guys don't use the BEDMAS acronym in grade school for teaching order of operations? I've only ever called them brackets.

BEDMAS in Canada (Southern Ontario) circa 2000.

Re: The $440M software error at Knight Capital (2019)

#175

Post by ricardobeat » Thu, May 05, 2022, 9:38 PM UTC

snapcaster wrote: post #161

ricardobeat wrote: post #114

Earlier quoted context omitted.

Where is this innovation happening? We’ve had crypto for 13 years now, and just yesterday we had people flat out losing 10k into the ether because their transaction “ran out of gas” without completing. Isn’t that plenty of time to develop systems that avoid basic issues like suddenly burning all your money?

I'm generally skeptical of ethereum but i don't think this claim is quite right. First, they didn't lose 10k "into the ether" it just went to miners as a fee for processing their transaction. Additionally, the fee was paid for priority. There is a limited amount of block space so people can pay extra to make sure they're included. I know it's cliche but this is literally a feature not a bug

Fees for what, when your transaction did not go through and you did not get the NFT you were paying for?

Re: The $440M software error at Knight Capital (2019)

#176

Post by bibliographie » Mon, May 09, 2022, 7:59 PM UTC

toddm wrote: post #91

bmitc wrote: post #89

Earlier quoted context omitted.

What is a garden year?

It's paid time off from a financial entity (hedge fund, prop shop, etc.) where you are paid not to compete in their space. In my case, I had a year to sit-out as a HFT quant from 2010-2011. Note that it sounds great - you're getting paid not to work - but nobody likes to make you an offer, as it's non-binding and your perceived/real value is declining as the time goes by.

Hey on that topic of a non compete, I've recently been offered a different internal role that would force me to sign a non compete. What was your experience like interviewing/searching for new roles? I would also like to hear what your general opinion on what it make it worth it to sign a non compete, although it sounds like you a generally negative view of them from this comment.

Re: The $440M software error at Knight Capital (2019)

#177

Post by bitwize » Fri, May 13, 2022, 9:12 PM UTC

coolhoody wrote: post #64

throwyawayyyy wrote: post #46

Random, but I interviewed at Knight Capital for a software engineering position a few weeks before this all went down. I was in London, so the interview was done over the phone. Picture me in the evening, handwriting C to solve some problem (the fog of time too thick to remember what that problem was), then reading out what I'd written, semicolons and all, to the interviewer. Because of course there was no shared doc…

> handwriting C /…/ reading out what I'd written, semicolons and all, to the interviewer. I had to re-read it to make sure you are not joking. The fact that you were not made me laugh harder. I'm now just saying "retuuurn" in various exaggerated accents.

I believed it. Amazon tried to make me do the same thing. I stopped the interview.