“Technology Issue” Roils Stock Market

More than 140 stocks hit by electronic trading glitch; trades in 6 stocks cancelled

1 min read
“Technology Issue” Roils Stock Market

Yesterday, a “technology issue” in the form of an electronic trading glitch at the Knight Capital Group brokerage firm caused confusion in the stock markets. According to the Wall Street Journal, at the beginning of the trading day yesterday, “Knight's computer program appeared to spit out duplicate buy and sell orders, jamming the market with high volumes of trades that caused the wild swings in stock prices.” For instance, the insurance company Berkshire Hathaway experienced  “more trading in the opening hour than it does in a typical day.”

Some 148 stocks were said to be involved, with the New York Stock Exchange (NYSE) having to cancel the trades in six stocks.

Another WSJ story states that Knight Capital is the  “biggest handler of stock orders for U.S. retail brokerage firms” and averages around 725 million shares a day. In comparison,  the NYSE trades about one billion shares a day.

An investigation has begun into the “Knightmare on Wall Street,” as it's being called, by regulators, who, in the aftermath of the NYSE flash crash in 2010, had already been investigating how the consequences of algorithmic trading systems glitches can be reduced, better contained, or unraveled. The flash crash was a major source of lost investor confidence in the integrity of the stock markets, which have suffered several other major glitches as well over the past few of years. The Knightmare won’t help.

Knight Capital saw its own stock price drop yesterday by one-third after it was identified as the source of the glitch. Some are apparently seeing that as justified comeuppance for the company, which was highly critical of how NASDAQ handled the Facebook IPO.

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Why Functional Programming Should Be the Future of Software Development

It’s hard to learn, but your code will produce fewer nasty surprises

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A plate of spaghetti made from code
Shira Inbar
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You’d expectthe longest and most costly phase in the lifecycle of a software product to be the initial development of the system, when all those great features are first imagined and then created. In fact, the hardest part comes later, during the maintenance phase. That’s when programmers pay the price for the shortcuts they took during development.

So why did they take shortcuts? Maybe they didn’t realize that they were cutting any corners. Only when their code was deployed and exercised by a lot of users did its hidden flaws come to light. And maybe the developers were rushed. Time-to-market pressures would almost guarantee that their software will contain more bugs than it would otherwise.

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