Investabots Amok!

You are walking down the street, texting to a friend, when suddenly everything freezes. These things happen all the time, you reason, so as annoying as it is you reboot and carry on.  A desperate text a short time later comes as a call from your friend to please stop bombarding them!  What went wrong?  You have no idea.  You reboot again and keep walking.

Things like this happen to everyone these days and we’re all used to it.  Software glitches.  Bugs.  Crappy software runs amok in the hands of appliance users.

Now imagine that you are a Wall Street trading firm that handles orders for thousands of clients and this happens to you.  Except that this costs $440M in bum trades by the time anyone catches it.  That’s exactly what happened to Knight Capital, the company that used to handle 11% of all trading on Wall Street.  It’s something that was inevitable in a system that is too big to be useful – and the world is starting to realize how dangerous this is.

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