Knight rider stock fiasco

Humans never learn and apparently neither do robots. Autonomous trading AIs went on a spending spree at Knight Capital Group in New Jersey this week, buying up shares in everything from RadioShack to Ford and American Airlines (ouch) in a 45-minute frenzy of disobedience. The company tried to offload the unwanted stock, but discovered it was already nearly half a billion dollars in the red — enough to wipe out its entire profit from 2011 and “severely impact” its ability to conduct business. If only it had protected itself with one of these.

sourceNY Times

The fiasco, the third stock trading debacle in the last five months, revived calls for bolder changes to a computer-driven market that has been hobbled by its own complexity and speed.

And not forgetting this.

One Response to “Knight rider stock fiasco”

  1. Rossa August 7, 2012 at 16:47 Permalink

    This explanation of the Knightmare by Nanex makes for interesting reading

    http://www.zerohedge.com/news/explaining-knightmare

    And some people apparently did very well out of this ‘disaster’. Those on the other side of the trades, that is.

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