Don't worry, AI and LLMs will save us.
Probably. AI and LLM are pretty good at detecting extreme outliers and staying on the highly probable path.
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Citi Missed a Fat Finger
41–50 of 92 posts
Re: Citi Missed a Fat Finger
#42I've been in the room when it happened. In one memorable incident, a junior trader I sat opposite bought 100 bn Japanese Yen instead of 10 bn. His excuse? "I lost track of the zeros". We'd only hired the guy because he had a PhD and "PhD's are smart" - lol. In his defense the UI was awful. He left soon after...
Most of exchanges and brokers have a dialog window “Looks like unusual order with high price impact - do you really want to execute yes/no” So definitely an UI issue.
A "fat finger" of only 10x is not that much of a fat finger and may not be detected for it's probably nothing out of the ordinary compared to the brokerage account's size. The fat finger in TFA, however, is a quite bigger fat finger: $444 bn instead of $58m.
That's 10 000x. That one is, indeed, a UI issue.
Re: Citi Missed a Fat Finger
#43Stupid question since I’m not in the fintech space. Why is a trader responsible for manually filling out an order to hedge against a sell order from a customer?
Re: Citi Missed a Fat Finger
#44Earlier quoted context omitted.
Most of exchanges and brokers have a dialog window “Looks like unusual order with high price impact - do you really want to execute yes/no” So definitely an UI issue.
A "fat finger" of only 10x is not that much of a fat finger and may not be detected for it's probably nothing out of the ordinary compared to the brokerage account's size. The fat finger in TFA, however, is a quite bigger fat finger: $444 bn instead of $58m. That's 10 000x. That one is, indeed, a UI issue.
Also on fat fingers everyone will find this hilarious
Re: Citi Missed a Fat Finger
#45Stupid question since I’m not in the fintech space. Why is a trader responsible for manually filling out an order to hedge against a sell order from a customer?
> Why is a trader responsible for manually filling out an order to hedge against a sell order from a customer?
The only manual component is specifying the size. As to why the client isn't doing it, this order might have been placed over the phone. Or it may be part of a more-complicated strategy that required some finesse.
Re: Citi Missed a Fat Finger
#46I've been in the room when it happened. In one memorable incident, a junior trader I sat opposite bought 100 bn Japanese Yen instead of 10 bn. His excuse? "I lost track of the zeros". We'd only hired the guy because he had a PhD and "PhD's are smart" - lol. In his defense the UI was awful. He left soon after...
How do you buy 10,000,000,000 (let alone 10x that much) of something as a junior trader without someone signing off on it? There's nothing at all to stop catastrophic actions being taken by anyone in the organization?
Re: Citi Missed a Fat Finger
#47I'm sure there have been more expensive UX failures (Three Mile Island?) but if there's ever a Wikipedia list of them I'm sure this will be on it.
The comp.risks archive is at http://catless.ncl.ac.uk/Risks/
Re: Citi Missed a Fat Finger
#48I've been in the room when it happened. In one memorable incident, a junior trader I sat opposite bought 100 bn Japanese Yen instead of 10 bn. His excuse? "I lost track of the zeros". We'd only hired the guy because he had a PhD and "PhD's are smart" - lol. In his defense the UI was awful. He left soon after...
How do you buy 10,000,000,000 (let alone 10x that much) of something as a junior trader without someone signing off on it? There's nothing at all to stop catastrophic actions being taken by anyone in the organization?
At the time, no. There wasn't any checking. And while it looks like a lot, it wasn't insanely expensive to unwind. Sometimes these kind of mistakes make money. My own 'mistake profit /loss' was around +1m USD.
Re: Citi Missed a Fat Finger
#49Re: Citi Missed a Fat Finger
#50These sorts of errors are frequent and pervasive in finance.
Not just numbers. I worked on a ref dare system with minimal input validation. Copy/pastes would leave in white spaces, new lines, etc. This would then break trading which tried to execute them.
Aged 17/18 at a summer work program at a fund (~2000) I was given Excel and Bloomberg and had to calculate risk across client portfolios. Messed up the manual input of one by a zero resulting in the whole portfolio getting rebalanced, then un-rebalanced.
The same team passed off a trade via paper slip saying it’s yen. The person entering it didn’t recognize the yen currency symbol, assumed it was a 7 and traded the full number prefixed with 7 in yen instead.
Many many stories of many many errors.