It's been a bad week for Knight Capital Group, a New Jersey brokerage that has been an unapologetic advocate for automated electronic trading when a software bug caused it to lose $440 million in just 45 minutes. That's a lost of about $10 million per minute, or $160,000 a second!
The high-speed trading arms race being waged on Wall Street has finally claimed its first major casualty.
Knight Capital Group, a brokerage that handles nearly 11% of all stock trading in U.S. companies, is in danger of collapsing after a software glitch triggered millions of unintended orders. The New Jersey firm lost $440 million in less than an hour — nearly four times the company's profit last year.
The blunder, which Knight's chief executive said on television was "a bug, a large bug" in its computer systems, caused Wall Street to shudder.
This, of course, reminds me of the funny saying "To err is human, to really foul things up requires a computer."