Bloomberg View: Faster, Knight Capital! Kill! Kill!

Another high-speed trading debacle
Photograph by Jin Lee/Bloomberg

The financial markets in the U.S. are the most sophisticated in the world, yet they can unaccountably spin out of control at a moment’s notice. The latest case involves Knight Capital Group, a securities-trading company laid low by one of its inadequately tested computer-trading programs. In less than an hour on Aug. 1, the program entered incorrect bids for about 150 stocks into the interconnected electronic marketplace. Computer programs at other firms sniffed out the errors and traded against Knight. By the end of the day, the company was out $440 million, forcing it to seek outside financing to survive.

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