Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (134122)	6/9/2017 12:52:07 AM
From: Elroy Jetson	1 Recommendation Recommended By dvdw© Read Replies (1) \| Respond to of 217576

Hubris. I hope you remember that the market-maker Knight Securities went bankrupt during the 'Tech Bubble' as the exclusive market maker of a number of bubblicious stocks of internet firms which didn't survive. After Knight raised the price of these stocks daily to quell demand, it only made those holding the shares loth to sell even at levels which were not even remotely justifiable, so Knight went increasingly short supplying buyers at ever higher prices with their short position. To be fair NASD had asked them to try to contain the bubble. Although most of these firms later sold for pennies a share or less, the short position at Knight Securities eventually exceeded their capital - which naturally sent these grotesqely over-priced stocks on a moon shot prior to their final demise. @@@@@@@@@ After being reorganized, Knight Capital went on to lose $440 million in 30 minutes on April 2, 2012 as their high-speed machine trading algorism began making "aberrant" trades in 150 different stocks, buying high and selling a few cents lower, due to what Knight's CEO described as a "software failure". The loss was four times larger than Knight's annual net profit all gone in 30 minutes before they were able to take the trading computers offline. In one stock alone, Exelon, Knight's program lost 15 cents per share on every trade - 2,400 times per minute on average. The 'glitch' added 4 million extra trades to the market in 550 million shares which otherwise would not have occurred. - bloomberg.com