Anatomy of a HFT Knightmare

Posted September 2012

Shortly after the Knight Issue of August 1, 2012 which resulted in $440m in losses to the firm in a matter of minutes from a rampant trading algorithm, I wrote this Op-Ed which appeared in the Financial Times on some thoughts behind what should be done.  I should point out that while I believe there are structural issues affecting investors, it is not the sole reason why retail has all but abandoned the equity markets.  Couple the past 10 years of near zero returns (unless you held Apple), with a significant recession, too big to fail, tarp, and well these structure issues are just icing on the cake so to speak.

Link to Chris Nagy's Op-Ed in the Financial Times regarding Knight's trading error: http://www.ft.com/intl/cms/s/0/0b32795a-df9f-11e1-9bb7-00144feab49a.html#axzz26lrvTmi0