Details of Knight $460 million disaster
It has been little more than a year ago when Knight updated some stuff on their servers, and lost over 460 million dollar. The firm bought in 80 stocks a total of $3.5 billion and sold short 74 stocks for $3.15 billion. That’s a nightmarish bug in the trading software. A document with the SEC gives a fine insight in the matter. The root of the problem was a software module not used for almost nine years, and still installed on a server.
Full details from the SEC over here, but for an easy read and good summary check Python Sweetness, How to lose $172,222 a second for 45 minutes. You could read it as a guide how not to run an automatic trading operation. The fine for inadequate risk procedures was $12m. That’ll teach them.
Getco was the white knight saving them from bankruptcy – the firms completed their merger in July this year. Getco kept their logo but the firms move on under the name KCG Holdings.
First,
any latest on Getco, merger, earnings etc?