David, NO code has a mind of it’s own. It does exactly what is was written to do no more, no less, unless it crashes or gets stuck in a loop which is a programming error. People go rogue, code doesn’t. It’s a cover up.

The trade bots have become self aware and they are running amok, as predicted in the movie Terminator.

Highly recommend Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street are Destroying Investor Confidence and Your Portfolio by Sal Arnuk and Joseph Saluzzi. Not particularly well-written, but jaw dropping. After reading it, you will want to:

1. Take a shower.
2. Liquidate all your 401(k) to cash.
3. Pray that you don;’t live to see Skynet rogue algorithms going sentient.

Edit: Burnsie beat me to it.

“People go rogue, code doesn’t.”

People, and hardware, which is one reason for skepticism about solving the problem permanently.

DD, machines, as in computers, have also replaced airline pilots. Think of that on your next flight to CA.

The final reports just came out on the 2009 Air France crash into the Atlantic.

They call it rogue. I call it a bug. Bug’s happen. We’ve had horrible bugs on occasion everywhere I work. Sometimes they’re an oversight on the part of the programmer who didn’t validate his input. Other times, the user does something completely illogical that was never tested. The number of problems I’ve debugged where the comment in the code is something like “we should never get here” is astounding.

I doubt this is a cover up, since Knight is taking a real bath on their stock price and their estimated costs are already over $300M. I suspect somewhere there is either a roasted programmer or a roasted tester.

My comment on one of my bugs: “How the hell was I supposed to know you could input data in OCTAL?”. See, on the old HP machines if you begain a number with o rather than a zero, the OS assumed it was an octal number. And my edits for accidental characters didn’t see it because it was eaten by the input routine before i got it and, uh…..

They just didn’t test their code enough.

Boxturtle (Let he who has never bugged cast the first stone)

What’s most interesting about this is the ability to rollback trades. That’s exactly what should have been done in the case of fraud.

Second, we see that “computer code” gets reprieve but criminals suffer no investigation.

But, but, …

Knight Capital CEO told Congress its data centers are ‘most reliable in the industry’

You’ll make the job creators-casino gamblers cry if you take away their toys.

It’s hard work programming computers to pick which lotto ticket- er I mean stock- to place money into.

One cannot prove a program works.

One can only prove a program does not work, by extensive experimentation (aka testing).

explanation of the earlier flash crash:
(wikipedia)

“From the SEC/CFTC report itself:
The combined selling pressure from the Sell Algorithm, HFTs and other traders drove the price of the E-Mini S&P 500 down approximately 3% in just four minutes from the beginning of 2:41 pm through the end of 2:44 pm. During this same time cross-market arbitrageurs who did buy the E-Mini S&P 500, simultaneously sold equivalent amounts in the equities markets, driving the price of SPY (an exchange-traded fund which represents the S&P 500 index) also down approximately 3%.
Still lacking sufficient demand from fundamental buyers or cross-market arbitrageurs, HFTs began to quickly buy and then resell contracts to each other – generating a “hot-potato” volume effect as the same positions were rapidly passed back and forth. Between 2:45:13 and 2:45:27, HFTs traded over 27,000 contracts, which accounted for about 49 percent of the total trading volume, while buying only about 200 additional contracts net.”

absurd.

Start taxing every stock trade!

Many months ago, I heard on The Young Turks that the average period of time that a stock is owned between sales is fourteen seconds.

We know that computer programs control the ebb and flow of trading. Human greed will always find a way to game any opportunity to profit. This time the machine whirled out of control and exposed itself briefly, however with slow and steady adjustments and manipulation the outcome is whatever those who control the machines wants it to be. How can anyone have confidence in the markets.

Is that too tin foil hat?

True for testing, but we’re getting much better at proving correctness. In fact, two years ago, a team in Australia proved an operating system kernel to be correct.

The data center performed nicely. It remained fully functional the entire time.

The software either had a bug, or a bugger.

Boxturtle (bug=bad code. Bugger=bad input)

“Maybe it’s time to take Wall Street back from the machines?”

Why?

Wouldn’t have helped here, that program went crazy. Would just have increased Knight’s pain.

What WOULD help is throttling the input. Limit the number of trades per minute and fine the snot out of anybody who goes over.

Or simply enforce that at the exchange. Queue the trades at the NYSE until it’s their turn. The folks who make money on minute by minute changes would be out of the market and we’d have investment as opposed to trading.

Boxturtle (I’ll be staying off small planes for awhile after typing the above)

funny comments at your link.. Knightmare on Wall Street..

At the start of trading on Wednesday, Knight — one of the few designated market makers at the New York Stock Exchange — experienced a technology issue due to the installation of trading software. As a result, Knight sent numerous wrong orders in NYSE-listed securities into the market, causing big swings in the shares of some companies.

Nothing went rogue. New or updated software wasn’t tested thoroughly and was moved into a live environment. (box turtle was right)
Wall Street/humans are too stupid to allow HFT. It’s like giving Louis Gomert the nuclear codes.

“Although the company’s capital base has been severely impacted, the company’s broker/dealer subsidiaries are in full compliance with their net capital requirements.”

hmmm.. sure.

The Wall Street Journal, citing unnamed sources, reported that Knight is in talks with Virtu Financial LLC about a potential merger or capital infusion. The Journal also said Knight has approached other potential partners, including J.P. Morgan Chase & Co., from which it reportedly sought funding.

Margin call?

That’s an account, not an explanation.

Wall Street has become a black hole for the funding of artificial intelligence. Maybe they’re laundering money for the 144,000 souls to be raptured in the Singularity.

I read this in my nooz paper this am. Unsurprised and expect more of the same going forward.

Yes, every trade should be taxed, but it will never happen unless the 1% can figure out a way just to tax 99% traders, while not taxing 1% traders. The 1% would be all *down* with that tax, which they would then rip-off because: LOOK! Commies!!! or something…

BTW, my take is that bugs/glitches like this will continue to happen. They always do, plus there’s still not enough incentive/motivation to really really refine the programming/testing to ensure that there’s less chance. These fools don’t give a sh*t if they lose a little $$$. They’ll just make it up in some other way. I’m sure this program has been VERY lucrative. Some glitch? Big deal…

New phones should have a rapture APP that initiates the 50000 volts. Voila your raptured.

Agreed. Even a tiny transaction tax would completely change the game. Say, .01%

I think you’re right. I looked at a few articles, couldn’t understand them, (or the one I posted above); And there appear to be a number of explanations, and no “right” answer.

all the more ridiculous.

I do not see any reason why it should not be required that any stock bought must be held for a minimum of 24 hours before it could be sold. What ever happened to the notion of stocks were a long term investment? Told to me by every financial planner I ever talked to?

As a former programmer, I agree. Unless AI has come a lot further than I’m aware, no program “goes rogue”–it does what it was designed to do, no more and no less.

If you have some ca$h, and you see the market tanking like that, BUY. After sanity returns, sell.
These dopes lost 440 million, ha! The people who write these programs probably understand their limitations. The people who pay these people to write the code probably don’t.

“Regulators are at a disadvantage because the system has increased in sophistication at the speed of light..”

Regulators are a disadvantage because they’re completely corrupt. excusing their corruption with statements like that is somewhat offensive.

Avast ye mateys. Me thinks me spies the event horizon over yonder Wall.

“The US imposed a financial transaction tax from 1914 to 1966“. Until computers started becoming common on trading desks, I guess…

Machines have take over the stock market. The greedy Wall Streeters are just vassals to the singularity.

“When they put these things out in the world they are really being tried for the first time in a real-life test,” said David Leinweber, the head of the Center for Innovative Financial Technology at the Lawrence Berkeley National Laboratory. “For other complex systems we do offline simulation testing.”

Mr. Leinweber has suggested to the S.E.C. that it do this work with the help of the supercomputing facilities at his center. The S.E.C. has recently moved in this direction by contracting with a high-speed trading firm that will provide it with more up-to-date market information.

Ha ha ha. Simulating weapons of mass destruction at LBNL. Assholes need to justify Skynet anyway they can.

Anyway, this seems another immoral and foolish justification of advanced technology. Who should be surprised that LBNL would take it on?