How to lose $172,222 a second for 45 minutes • Hacker News Board

Re: How to lose $172,222 a second for 45 minutes

#191

Post by twic » Tue, Oct 22, 2013, 5:05 PM UTC

jdbernard wrote: post #167

6d0debc071 wrote: post #85

Earlier quoted context omitted.

This was the bit that most shocked me: "Knight did not retest the Power Peg code after moving the cumulative quantity function to determine whether Power Peg would still function correctly if called." From thereon they purely and simply deserved everything that happened to them.

If I understand correctly, they were planning to remove the Power Peg code. Do you re-test the left-overs of your refactoring: the parts you delete? The real problem here is that they were using incremental deployment and did not have a good process for ensuring the same changes were successfully made to all server.

The parts you delete aren't left over. They've been deleted. Do you test the parts of your code left behind after refactoring? Yes, absolutely.

Code is either working correctly, and verified to be such by automatic testing, or it's not there. You don't leave unused code lying around to be removed later!

Re: How to lose $172,222 a second for 45 minutes

#192

Post by joshAg » Tue, Oct 22, 2013, 5:05 PM UTC

Houshalter wrote: post #112

joshAg wrote: post #76

Earlier quoted context omitted.

No, the SEC fined them for losing money stupidly. In order to have access to the market like they did, they had to follow certain laws that are enforced by the SEC. When they were losing all that money they weren't following those laws. It's like if you cause an accident while you're driving by breaking the law; you get a traffic citation (and the accompanying fine), even if your car is totaled as a result of the acc…

Right but they didn't do anything except offer trades. The thing about selling shorts they couldn't cover makes sense, but just for "acting stupidly" seems silly.

sorry, i wasn't sure how detailed to be, but by 'acting stupidly' I meant unintentionally selling shorts they couldn't cover in a way that made the action illegal.

Re: How to lose $172,222 a second for 45 minutes

#193

Post by twic » Tue, Oct 22, 2013, 5:16 PM UTC

hedwall wrote: post #90

mischanix wrote: post #49

Well, this makes me 1000x more scared of working in a DevOps role.

How come? DevOps isn't a role (to begin with) and a lot of the practices documented in the text is the opposite of good DevOps practices.

AOL. True devops is about building systems that make this kind of disaster impossible. Or at least very hard.

However, like agile before it, despite the fact that it really means something purposeful and rigorous, the word "devops" has become widely abused to camouflage undisciplined, thoughtless, cowboy behaviour.

A handy way of telling the difference is to ask yourself "what would Devops Borat do?"; if it's something Devops Borat would do, it's the false devops.

Re: How to lose $172,222 a second for 45 minutes

#194

Post by lifeformed » Tue, Oct 22, 2013, 5:18 PM UTC

scrrr wrote: post #87

High Frequency Trading seems so abstract. There's no value created, it seems. It's like something in between imperfect systems, scraping off the margin created by that imperfection. It's fascinating, and interesting from an algorithmic point of view (like a computer game), but at the same time I don't feel sympathy for this company going out of business.

The weirdest thing about HFT to me is just how far removed it is from the original concept of buying stocks.

Re: How to lose $172,222 a second for 45 minutes

#195

Post by comrade_ogilvy » Tue, Oct 22, 2013, 5:18 PM UTC

drill_sarge wrote: post #39

4hthth4 wrote: post #31

Earlier quoted context omitted.

It makes me think you shouldn't allow only a single person to monitor something like that...

Yes, the more people monitoring the better. But in this situation someone has to be in charge and make a decision. And nobody wants to be that guy.

I would argue that many more people monitoring can encourage the fear of making the wrong call. "Hey, someone smarter and more experienced than me should makes sense of this." "Hey, the smart new guy is supposed to be watching this. I will look more closely later."

What you want is two or three people really in charge, where the individuals are empowered to say: "I am totally confused. If someone cannot explain what is going on to me so that I understand, I am starting shutdown procedures, immediately. Do YOU know exactly what is going on?"

Re: How to lose $172,222 a second for 45 minutes

#196

Post by sseveran » Tue, Oct 22, 2013, 5:24 PM UTC

fiatmoney wrote: post #8

"The best part is the fine: $12m, despite the resulting audit also revealing that the system was systematically sending naked shorts." Cool - all you have to do to get away with financial crimes is create a system with no protections against breaking the law.

Naked shorting is not illegal for a broker dealer.

Re: How to lose $172,222 a second for 45 minutes

#197

Post by ansible » Tue, Oct 22, 2013, 5:31 PM UTC

vecter wrote: post #92

scrrr wrote: post #87

High Frequency Trading seems so abstract. There's no value created, it seems. It's like something in between imperfect systems, scraping off the margin created by that imperfection. It's fascinating, and interesting from an algorithmic point of view (like a computer game), but at the same time I don't feel sympathy for this company going out of business.

I really hate to go down this road because it's been rehashed thousands of times on Hacker News, but high frequency traders add value to the market by adding liquidity (and therefore reducing spreads --> cost to you for executing) and price discovery.

I really hate to go down this road because it's been rehashed thousands of times on Hacker News...

And I've yet to see a convincing argument that HFT is of any benefit to anyone else other than themselves.

At the most basic level, HFT firms make money, right? Otherwise they wouldn't be doing this. Where does this money come from? Entities that are holding these same stocks for longer periods of time. It increases the costs to the longer-term buyers, and it decreases profits to the long-term sellers.

HFT is sand in the gears of the economy, not lubricating oil like they would have you believe.

Re: How to lose $172,222 a second for 45 minutes

#198

Post by Jochim » Tue, Oct 22, 2013, 5:33 PM UTC

Jtsummers wrote: post #142

segmondy wrote: post #126

Earlier quoted context omitted.

Be very careful with what you are suggesting. If we are going to call them criminals because of bug in their code and system. Then don't be upset the day you are called a criminal for a bug in your code, for not having a test unit or deploying the wrong thing and not having the right process in place.

Having worked in the aerospace side of software dev, I'd actually be cool with this. Outside of software, real engineers have real liability when their systems fail [1]. PEs [2] are held accountable in most countries that license engineers when they sign off on things that should not have been signed off on. Too many people on the software side, even in safety critical systems, play fast and loose with the "engineeri…

But the way in which 'real world' engineering is treated by companies is extremely different to that of software engineering. A structural engineer tells you that your mega-bridge is going to take another 2 years to build safely and you eat up the cost, a software engineer tells you they need another 2 years to make sure your program will work reliably and you tell them they have 6 months.

It would be nice to see strict regulation on systems where lives would be endangered should the software fail, but this also raises the issue of how you regulate.

In Structural engineering you can say don't use material X if the forces acting on it exceed Y newtons. The same regulation in software doesn't make sense, you can't say "only use Haskell" or "don't use library Z" because the interactions between the tools we use are much more complicated than many "real world" engineering tasks.

We then run into the fact that a lot of software engineers have no real power in their companies, they do what management says or they get fired, I'd guess that when any other kind of engineer says "this won't work" managers listen. In my opinion a better solution to holding software engineers responsible would be holding the company and managers to account, at least at this point in time.

Re: How to lose $172,222 a second for 45 minutes

#199

Post by saalweachter » Tue, Oct 22, 2013, 5:34 PM UTC

washedup wrote: post #146

D-Coder wrote: post #135

Earlier quoted context omitted.

Also a perfect description of life forms.

Truth! Something that creates value for a certain form of business or life most likely does not create value for society or the ecosystem. It simply is another niche.

You don't even have to create value for your species, or lasting value for your genes.

The classic example is -- if I recall correctly -- a mutation sometimes found in mice. The mutation causes a male to only produce male children. This mutation will spread through the population until there are only male mice, and one generation later the mice are all dead.

Re: How to lose $172,222 a second for 45 minutes

#200

Post by crusso » Tue, Oct 22, 2013, 5:40 PM UTC

twic wrote: post #181

crusso wrote: post #157

Earlier quoted context omitted.

I would draw a line between systems that rely upon voluntary interaction like stock markets vs systems that rely upon forced coercion like organized crime.

Which side of that line do confidence tricksters, fraudsters, and counterfeiters lie?

Same side as politicians?