…you can make an error that would have taken you years to do by hand. Very well said!
They also say that On any given day, between 15% and 20% of all trades on the NYSE and NASDAQ went through Knight Capital’s computers. So is trading down 15-20% since the incident? Probably not…
And Wired’s background story on high freq trading: Raging Bulls: How Wall Street Got Addicted to Light-Speed Trading – no idea how they were able to pull out this long article in such a short time… high frequency journalism, anybody?
I wasn’t able to find any more details about what programming or logical error caused the problem – looking from outside it just appears to be a simple case of them forgetting to manage the balance, or if not forgetting, then having a bug in that routine that wasn’t exposed in testing.