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NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

bloomberg.com

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Re: NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

#61

Post by gpderetta »

itronitron wrote: post #37
WiSaGaN wrote: post #11

A lot of stocks have minute bar of wide range prices in the first few minutes of continuous trading. This seems like the incident in what caused Knight Capital fiasco, in which the system repeatedly buy on the ask and sell on the bid very fast, thus pushing the high price high and low price low. In the opening usually the market maker will be more weary of the risk they cannot hedge directly and thus will be less wil…

Doesn't each trade require both a buyer and a seller, who buy and sell at an agreed on price? Presumably both parties would be satisfied with the trade so it isn't clear to me what all the fuss is about.

I haven't really researched anything, but both parties thought they were bid/offering into an auction with time to cancel or amend their orders.

Re: NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

#62

Post by WiSaGaN »

itronitron wrote: post #37
WiSaGaN wrote: post #11

A lot of stocks have minute bar of wide range prices in the first few minutes of continuous trading. This seems like the incident in what caused Knight Capital fiasco, in which the system repeatedly buy on the ask and sell on the bid very fast, thus pushing the high price high and low price low. In the opening usually the market maker will be more weary of the risk they cannot hedge directly and thus will be less wil…

Doesn't each trade require both a buyer and a seller, who buy and sell at an agreed on price? Presumably both parties would be satisfied with the trade so it isn't clear to me what all the fuss is about.

I don't know what happened in current case. In the Knight Capital case, KC clearly didn't intend to send those erroneous orders. And if those trades were not annuled, KC would not be able to settle those, since the trade loss were larger than the collateral KC put up.

Re: NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

#65

Post by anonu »

WiSaGaN wrote: post #11

A lot of stocks have minute bar of wide range prices in the first few minutes of continuous trading. This seems like the incident in what caused Knight Capital fiasco, in which the system repeatedly buy on the ask and sell on the bid very fast, thus pushing the high price high and low price low. In the opening usually the market maker will be more weary of the risk they cannot hedge directly and thus will be less wil…

Knight capital issue was a test flag in the code that caused orders to multiply.

From what I'm reading, this NYSE error seems a bit more complex where the presence of a backup system confused the current market state to skip the open auction.

Re: NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

#66

Post by lvl102 »

detaro wrote: post #54
lvl102 wrote: post #31

Remember the flash crash of 2015? They let those trades actually STAND. Including options. This week’s open was nothing in comparison.

That wasn't an exchange "malfunction" in the sense that the exchange did not do what it was supposed to, was it?

Do you really think they will take responsibility for billions lost/made that day? No, that's a big liability. Anyone trading that day knew it was a big glitch at open. Some names, BLUE CHIPS, were down 40-50%! What shocked us all is that they actually allowed the trades to stand. What was different about this week was that the SEC actually tried to do their jobs for once and the exchange had to address it ie come up with bullshit excuse.

Re: NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

#67

Post by anonu »

Tech can be so fragile. You do everything right, trade millions of shares everyday and handle billions of dollars. But you forget to run one script to shutdown a backup system and everything comes crashing down: your reputation in tatters, millions in costs to settle bad trades, barbarians at the gates.

Re: NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

#68

Post by blippitybleep »

mellosouls wrote: post #22

These "issue traced to staffer" stories sound like management cover up for management/system shortcomings to me. Systems with such significant potential impact, and in industries where lack of financial investment in their continuity is a deliberate choice have very little excuse to be passing the buck to grunts for basic process flaws that can be triggered by individual error.

Sounds like many places I’ve worked. I think most devs have had a job like that.

Re: NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

#69

Post by anonu »

herpderperator wrote: post #24

If the trades are being cancelled, are they going to correct the chart data? Right now it looks very misleading on the daily[0], weekly, monthly, quarterly, yearly etc for large caps that trade quite steadily otherwise. I do understand that this would be a challenging effort as that data already flowed to and was stored by all the broker-dealers, but I think it should be done. [0] https://www.dropbox.com/s/6jdmgkdyei…

Technically yes, historical market data feed needs to be cleaned up. Which will be a nightmare for every single person who maintains one...

Which is also why exchanges are very reluctant to mass cancel trades. The knock on effect goes beyond just market data feeds

Re: NYSE Tuesday opening mayhem traced to a staffer who left a backup system running

#70

Post by bigpeopleareold »

mellosouls wrote: post #22

These "issue traced to staffer" stories sound like management cover up for management/system shortcomings to me. Systems with such significant potential impact, and in industries where lack of financial investment in their continuity is a deliberate choice have very little excuse to be passing the buck to grunts for basic process flaws that can be triggered by individual error.

I had a project that was really important once. I made a tiny mistake that had a big consequence - a couple of hours of potential lost revenues from our customers. I fixed my mistake with both my boss and CEO nearby. I said after I pushed the fix that I really need more resources around it. That little light of "yeah, this is important" that should have flickered didn't. :)

I will not be surprised if nothing gets fixed with the issue at NYSE.

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