Errant Trades Reveal a Risk Few Expected! Can GPS Spoofing Cause A Flash Crash? Another update.

Old_Skeet

I have linked below an article that comments more on the market than it does Kinght Capital's computer that went away on newly loaded software that perhaps should have been better tested before placed in real time action. It seems, firms do not have to have the SEC approve new codes or software ... So look for some changes. In addition, some feel a transaction tax is warranted, perhaps even on quotes stuffed into the market, as some feel this will reduce volatility. Some seem to favor this ... Others are opposed as they feel it will raise cost.

http://dealbook.nytimes.com/2012/08/02/errant-trades-reveal-a-risk-few-expected/?ref=business

Perhaps, something positive will come out of the Knight Capital experience that will improve the markets and the exchanges.

Have a good day ... and, Good Investing,
Skeeter
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Scroll down for the article on GPS Spoofing.

Anna

I am amazed at the number of people with the attitude "bits will be bits" as though if you leave the software alone to grow up, it will develop bytes with more mature trading practices. I think a similar attitude about teen age drivers left me crippled for life with no consequences to the "boy" (boys will be boys).

If the same attitude prevailed for software in military equipment or even airplanes, a lot of people would get hurt while the software "matured".

rono

Howdy,

I was amazed that yesterday on CNBC all they talked about was going back to paper trading. It's not the software, nor computers that are the problem . . . things happen. The problem is the lack of accountability for the people, companies and shareholders. Start giving these slime hardtime for 10-20 and this stuff will stop.

peace,

rono

Old_Skeet

Here is an update ...

I have linked below what the SEC says that companies must maintain their systems and test fequently to make sure they are working properly.

SEC to High Speed Traders ... Make Sure Your Technology Works!

http://buzz.money.cnn.com/2012/08/03/sec-knight-capital/?section=money_markets&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+rss/money_markets+(Markets)

Skeeter

msf

Reply to @Skeeter:

Straight from the horse's mouth - the SEC statement referenced by CNN:
http://www.sec.gov/news/press/2012/2012-151.htm

MaxBialystock

TRP was among those calling for stricter controls. Surprised. But I like to see that.

Old_Skeet

Hello,

The articles on high frequency trading seem to be in vogue this weekend.

I have linked another one that suggest that perhaps GPS Spoofing could cause a flash crash in the markets.

http://www.ritholtz.com/blog/2012/08/could-gps-spoofing-cause-another-flash-crash/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+TheBigPicture+(The+Big+Picture)

Skeeter