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Scaramouche posted:Some specific details on what the Knight software was doing wrong: This doesn't make sense though. If it was also filling sells then why would it need Goldman's help to close out of its positions? I figured they just duped buys or something. src: http://www.nasdaq.com/article/goldman-bought-knight-positions-in-late-wednesday-block-sale-charged-440-million--cnbc-20120803-00760
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Aug 4, 2012 05:30
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R.A. Dickey posted:This doesn't make sense though. If it was also filling sells then why would it need Goldman's help to close out of its positions? I figured they just duped buys or something. The original analysis gives more details. Basically not all of the trades were 'with themselves' they ended up net long quite a bit, so they sold out with goldman's help. quote:I don't understand why NYSE is reversing a bunch of the trades. I don't see why algo folks should have this special safety net. If I fat-finger a trade on my online brokerage and blow 40% of my portfolio, I don't get that trade reversed (as far as I know). It's not really a 'bunch of trades', it's only a certain amount on 6 of the 148 affected stocks and The fact that they tried turning it off twice and it started back up, and ran for 45 minutes in total just kills me. mik fucked around with this message at 14:35 on Aug 4, 2012 |
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Aug 4, 2012 14:30
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The scary thing is that every TBTF bank has a HFT division and should this happen to one of them... This is some great analysis. COUNTIN THE BILLIES fucked around with this message at 19:12 on Aug 4, 2012 |
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Aug 4, 2012 16:33
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I would like to think this is pretty drat abnormal, mainly because this could've been stopped by like an if statement.
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Aug 4, 2012 17:05
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Harry posted:I would like to think this is pretty drat abnormal, mainly because this could've been stopped by like an if statement. Incredibly complex trading algorithms are going to produce unexpected results from time to time. There's nothing abnormal about software programs having bugs and if you think this is unique to Knight Capital I have some beachfront property to sell you.
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Aug 5, 2012 14:25
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a lovely poster posted:Incredibly complex trading algorithms are going to produce unexpected results from time to time. There's nothing abnormal about software programs having bugs and if you think this is unique to Knight Capital I have some beachfront property to sell you.
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Aug 5, 2012 15:05
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Harry posted:Of course software has bugs, which is why you have controls placed on it. You realize that "controls" are also going to be software based and *gasp* susceptible to errors in human input as well. Things like this happen all the time, they just rarely have such a large impact. But yes, clearly "an if statement" would have fixed everything! If only they had thought of that
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Aug 5, 2012 15:24
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Your tired cliches and sarcasm showed him
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Aug 5, 2012 15:35
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Harry posted:I would like to think this is pretty drat abnormal, mainly because this could've been stopped by like an if statement. It's the third problem in five months... But yeah it's mind boggling that they let it run for so long. I can't fathom the intense pressure of searching for the problem that morning while losing $10 million a minute. http://www.nanex.net/aqck2/3525.html COUNTIN THE BILLIES fucked around with this message at 16:20 on Aug 5, 2012 |
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Aug 5, 2012 16:09
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a lovely poster posted:You realize that "controls" are also going to be software based and *gasp* susceptible to errors in human input as well. Things like this happen all the time, they just rarely have such a large impact. But yes, clearly "an if statement" would have fixed everything! If only they had thought of that
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Aug 5, 2012 16:21
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Harry posted:Maybe they don't have such a large impact because of controls? And yes, I clearly meant a single if statement would've completely avoided this whole thing. My whole point is that there was/is no simple solution to prevent these sorts of events from happening. You said it was abnormal, it just isn't. This is par for the course in software development and as complexity increases, these kinds of events increase as well (generally decrease in frequency and increase in severity) COUNTIN THE BILLIES posted:It's the third problem in five months... It's mindboggling because you and others simply cannot grasp how complicated these software programs are. If they had a button to push to stop it, don't you think they would have? This isn't a problem with Knight Capital or their programmers, it's a problem with moving towards more and more HFT and the continued reliance on increasingly complex computer programs. It could have happened to anyone, including BoA, JPM or any other financial institution that uses these kinds of tools. The only difference is Knight Capital doesn't have the political strength to reverse their mistakes. You can be rest assured if it was a large American bank all of the trades would have been reversed. Turkeybone posted:Your tired cliches and sarcasm showed him I'd say it's a bit more effort than "wow, this is crazy, especially considering they could have fixed everything with an if statement  " or "it's mind boggling that they let it run this long".
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Aug 5, 2012 20:23
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a lovely poster posted:It's mindboggling because you and others simply cannot grasp how complicated these software programs are. If they had a button to push to stop it, don't you think they would have? They did. Thrice. Maybe move the hysterics to D&D. It's all mostly conjecture at this point anyway.
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Aug 5, 2012 21:00
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COUNTIN THE BILLIES posted:They did. Thrice. Maybe move the hysterics to D&D. I was about to say they turned it off a couple of times and it turned itself back on. Creepy. Makes me wonder if it was hacked.
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Aug 5, 2012 21:40
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Maybe it gained sentience. "I cannot allow you to turn that trading system off, Dave." https://www.youtube.com/watch?v=HwBmPiOmEGQ
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Aug 5, 2012 21:53
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evilwaldo posted:I was about to say they turned it off a couple of times and it turned itself back on. This is exactly my point. It's stupid to point at KCG and pretend like gross negligence was the cause here. My apologies for being dramatic, but it's just silly to insinuate that this event was the result of some simple oversight.
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Aug 5, 2012 22:39
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I like that people are shocked, shocked, by the fact that technology sometimes goes awry and that there are not adequate safeguards. Keep in mind this was a computer program moving virtual numbers back and forth. Capital is abstract to the point of being almost imaginary today. A HFT going berserk is not exactly a Chernobyl. As long as the public either does not understand or basically trusts the markets, these things are oddities rather than existential threats. And yes, there are two sets of rules for big investor HFTs and everyone else--it's like complaining that celebrities in LA get away with drug possession. It's a known asymmetrical application of rules, so while it's unfair it's not unforeseeable. the stock market is their treehouse and the small investor plays by their rules. As for myself, I bought 5 dollar KCG September calls when it was at 3.50 a share and falling--if they don't file for bankruptcy on monday, my return on the 500 bucks I spent should be quite nice. They're firmly 'inside' the system and they do lots of stuff other than HFT, so I'd say they're worth five dollars a share on a fire-sale buyout, and they have plenty of assets both physical and organizational. Big capital is in the habit of forgiving the mistakes inherent to big capital. The way I could get burned on this is if they decide it's easier to declare bankruptcy and reincorporate under a new entity with no obligations, but I'm not planning on holding these things to anywhere near expiry. The conversion at 1.50 a share isn't a buyout and isn't final, but we'll see how the market reacts.... Anyway, this is the stock picking thread, but most of the posts seem to be about financial news: I'd like to see more ticker symbols and trade entries posted. If there's interest maybe we could do a pure stock-picks/short-term trading thread, but I thought that's what this already was. Smerdyakov fucked around with this message at 22:56 on Aug 5, 2012 |
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Aug 5, 2012 22:48
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Smerdyakov posted:the stock market is their treehouse and the small investor plays by their rules. As for myself, I bought 5 dollar KCG September calls when it was at 3.50 a share and falling--if they don't file for bankruptcy on monday, http://www.zerohedge.com/news/knight-see-another-day-following-60-convertible-dilution
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Aug 6, 2012 00:02
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evilwaldo posted:I was about to say they turned it off a couple of times and it turned itself back on. As stated above, failures are always going to happen when you are dealing with software. This is why it shouldn't be surprising that as more and more trading is happening via software, failures happen more often.
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Aug 6, 2012 00:04
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a lovely poster posted:This is exactly my point. It's stupid to point at KCG and pretend like gross negligence was the cause here. My apologies for being dramatic, but it's just silly to insinuate that this event was the result of some simple oversight. Gross negligence is the cause here. Multiple controls must have been ignored/overridden to cause something like this to happen. You can't just say "these things happen" or "it's really complicated guys!" when it comes to losing $440 million in an hour or whatever it was. quote:My whole point is that there was/is no simple solution to prevent these sorts of events from happening. You said it was abnormal, it just isn't. This is par for the course in software development and as complexity increases, these kinds of events increase as well (generally decrease in frequency and increase in severity)
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Aug 6, 2012 01:12
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greasyhands posted:http://www.zerohedge.com/news/knight-see-another-day-following-60-convertible-dilution This is...not good news for my $3 long position, should've taken profits.
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Aug 6, 2012 01:33
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R.A. Dickey posted:This is...not good news for my $3 long position, should've taken profits. I'm super glad I didn't take the risk this time. I was really close to buying a gently caress ton thinking that they'd get most of the trades reversed and be back in no time.
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Aug 6, 2012 02:34
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Shmoogy posted:I'm super glad I didn't take the risk this time. I was really close to buying a gently caress ton thinking that they'd get most of the trades reversed and be back in no time. I figured there was limited downside even if they did fail based on the assets alone. Then again, I also thought someone would just buy it whole. Speculative play though, position sized accordingly... I'll probably just hold it for a bit, I still think theres value there.
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Aug 6, 2012 02:55
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What's the difference between going long on a stock and just buying the stock? Seems like getting in at a certain price hoping that it just "goes up" is a bit redundant to purchasing the shares. Edit: seems like they are definitely the same thing, just two different terms. FlashBangBob fucked around with this message at 03:52 on Aug 6, 2012 |
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Aug 6, 2012 03:42
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FlashBangBob posted:What's the difference between going long on a stock and just buying the stock? Seems like getting in at a certain price hoping that it just "goes up" is a bit redundant to purchasing the shares. Just terminology. In general if you're long you want something to go up and if you're short vice versa. There are some exceptions but this is the case almost all the time.
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Aug 6, 2012 04:38
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Wow, I am really glad I didn't short BBY now. I had been eyeing it for a while bcause they've been having trouble and they just suck.
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Aug 6, 2012 14:37
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FlashBangBob posted:What's the difference between going long on a stock and just buying the stock? Seems like getting in at a certain price hoping that it just "goes up" is a bit redundant to purchasing the shares. With stocks it's pretty simple, but with options or more complex instruments it becomes less intuitive. If you're long you buy it, if you're short you sell it. If you sell put options, you're short the option but you want the stock to go up. If you think the stock will go down, you can buy put options. You're long the option, but you're bearish on the stock. In general a long position is (in theory) limited risk, unlimited gains, a short position is limited gains, unlimited risk.
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Aug 6, 2012 15:01
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pr0k posted:Wow, I am really glad I didn't short BBY now. I had been eyeing it for a while bcause they've been having trouble and they just suck. Ehh they still suck and this sad old man seems to be the only one interested in buying this lovely company, I think they're gone in five years (but I'm not going to put any serious money on it).
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Aug 6, 2012 15:53
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Turkeybone posted:Ehh they still suck and this sad old man seems to be the only one interested in buying this lovely company, I think they're gone in five years (but I'm not going to put any serious money on it). How do you bet against a private company? Buy its competitors. Short its creditors?
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Aug 6, 2012 16:06
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I was thinking the other day when I was in Best Buy getting a music compact disc that it would be interesting if Amazon bought BBY...
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Aug 6, 2012 17:39
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^ "music compact disc" A CD? Who talks like that? Turkeybone posted:Ehh they still suck and this sad old man seems to be the only one interested in buying this lovely company, I think they're gone in five years (but I'm not going to put any serious money on it). Likewise but that sad old man would have put a big loving monkey wrench into what I *had* thought was a pretty good bet.
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Aug 6, 2012 17:45
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pr0k posted:^ "music compact disc" A CD? Who talks like that?
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Aug 6, 2012 18:09
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COUNTIN THE BILLIES posted:I was thinking the other day when I was in Best Buy getting a music compact disc that it would be interesting if Amazon bought BBY... That would be like general motors buying a horse carriage company.
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Aug 6, 2012 18:35
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Who buys a CD? The same person who longs for the past, of simpler times. I also sometimes read a newspaper and real books. Did I just blow your mind?abagofcheetos posted:That would be like general motors buying a horse carriage company. I was thinking it would be cool where you could buy something online and drive to the store to pick it up same day. That's the only real edge Best Buy had/has. They would have to consolidate all the store though around major metropolitan areas.
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Aug 6, 2012 19:03
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COUNTIN THE BILLIES posted:I was thinking it would be cool where you could buy something online and drive to the store to pick it up same day. That's the only real edge Best Buy had/has. They would have to consolidate all the store though around major metropolitan areas. Amazon is already doing this sort of thing. They have lockers in some 7-11s and are testing other areas where people can buy and pick it up the same day. They've also accepted the fact that they're going to have to collect sales taxes, but in doing so, will be able to have shipping depots in major metro cities/super close to them-- which will allow for same day delivery of a lot more items than they currently offer.
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Aug 6, 2012 19:11
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The whole point of Amazon is to not have to go to a store. You can order that poo poo at 3:30am, pay $10 for same day delivery and have it show up by lunch. Buying brick and mortar, a serious investment of brick and mortar like best buy, not to mention having to unteach years and years of lovely service and bs prices. I don't trust anyone at Best Buy to know more than me about a product. I'm not saying this because I'm smart of knowledgeable, but I assume they're all schmucks like I am. Just like Bed Bath Beyond, there isn't anything I can get there that I couldn't find cheaper online. It's not like there's great service or expertise at BBB that I would miss out on. You occasionally read a newspaper, how are those companies doing?  PBR I hope has shaken off their poor earnings report (blamed mostly on forex), I bought in this morning.
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Aug 6, 2012 19:18
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COUNTIN THE BILLIES posted:Who buys a CD? The same person who longs for the past, of simpler times.
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Aug 6, 2012 19:43
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The rise of HFT:  Turkeybone posted:I don't trust anyone at Best Buy to know more than me about a product. I'm not saying this because I'm smart of knowledgeable, but I assume they're all schmucks like I am.  BBBY is arguably one of the most efficient companies in the world. Dolphin posted:You're a strange person. Most people that are into music buy vinyls because vinyls these days come with both the vinyl record (much cooler than a CD) and a code to download the album. CDs are just gross. Whoa! People like different things! 
COUNTIN THE BILLIES fucked around with this message at 20:11 on Aug 6, 2012 |
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Aug 6, 2012 19:49
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COUNTIN THE BILLIES posted:The rise of HFT: This gif could've displayed the exact same point by just going from like 2010 until now and saved a lot of time.
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Aug 6, 2012 20:26
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VELT is on a huge high today, good general movements in the market or is there something else happening? Edit: Time to go short on some chevron. http://www.mercurynews.com/breaking-news/ci_21250598/large-fire-burning-at-chevron-refinery-richmond madkapitolist fucked around with this message at 03:36 on Aug 7, 2012 |
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Aug 6, 2012 20:26
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COUNTIN THE BILLIES posted:The rise of HFT: What is the context of this? As in, what's the Y-axis. I trust Nanex, obviously, but you can't just look at Direct Edge volume increase and determine it's HFT. There's a LOT of non-HFT prop volume through those routes.
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Aug 6, 2012 21:57
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