Stock robot in 45 minutes led to a loss of 440 million dollars

Now we live in the world of high technologies, which allow us to transmit and receive data at a very high speed. In addition, computer systems make life easier for all of us. Including, and stock brokers. On various exchanges work software systems, "robots" that allow you to automate the process of buying / selling.

On large exchanges, large companies have very expensive software packages that cost many millions of dollars. Such complexes justify their cost, earning the owners tens and hundreds of millions of dollars. But sometimes automation can lead to trouble.
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Thus, the stock "robot" of the Knight Capital Group company began to buy uncontrollably shares of various companies, including RadioShack, Ford Motor Company and American Airlines. Vending machine orgy machine lasted only 45 minutes. After that, the company tried as quickly as possible to sell unwanted blocks of shares. Having calculated the cost of buying shares and then proceeds from the sale, the company was short of 440 million dollars. A little later, the company reported that the assets of its customers were not affected. The reason for such "successful" trades, in the opinion of company representatives, is the new software that has recently been installed.

This is four times the profit earned by the company in 2011. Losses are so great that the company is experiencing serious difficulties with further business. It is worth noting that earlier the Knight Capital Group company has repeatedly spoken in favor of using exchange robots and other software systems in exchange trading. Moreover, the management of this company can be called a group of enthusiasts who promoted the idea of ​​automating exchange trading. The company's management believed that automation would help Knight Capital Group outperform all its competitors.

Now experts from a body like the US Securities and Exchange Commission are investigating the incident. But even if an error is found, the company is unlikely to get its money back. What happened can lead to administrative restrictions on the use of exchange robots in trading. By the way, this is not an isolated case of an error of trading robots. Only recently, on June 23 of this year , about the same thing happened .

newscientist